CIO —
Whether your business thrives or dies in the coming decade may depend on how well it manages environmental issues. In a world of high-priced oil, tightening greenhouse gas emission controls and dwindling natural resources, no company can afford to ignore the environment as an element of business strategy.
Research into companies that are leaders in environmental management shows that information technology is critical to making green initiatives pay off. Thus, furniture maker Herman Miller (MLHR) has constructed a database to rank the environmental attributes of every component in its products and is moving to eliminate highly polluting inputs. Everyone from megalithic Wal-Mart (WMT) to tiny Rohner Textil (which makes fabric) is testing the power of data to drive financial and environmental results. Meanwhile, a handful of other leading companies have saved millions of dollars and created new revenue streams by bringing IT to bear on their environmental challenges.
GE, for example, has deployed its digital cockpit, a $10 million system that supplies metrics on environmental performance, resource use, safety and compliance. With it, the company’s violations of wastewater emission regulations fell by more than 80 percent in the past decade, and GE saved tens of millions of dollars through environmental, safety and productivity improvements.
GE achieved these results by using information to uncover better ways to do routine things, and by demanding that the changes pay for themselves. Now GE has a platform for its "ecomagination" marketing campaign and for its push to provide environmental goods and services, such as high-efficiency jet engines and turbines and water transport systems.
Beyond Energy Efficiency
Information technology’s power to collect, analyze and extract information will have market-changing effects. Marrying information-age tools such as data mining and advanced modeling techniques to environmental challenges holds potential to propel some companies ahead of their competitors because they can "see" through data where their industry is headed.
Curbing energy consumption is the low-hanging fruit for every company going green. While you shouldn’t underestimate these opportunities for saving money, more revolutionary potential is waiting for companies that use IT to track, monitor and redesign their business environment. Envisioning products from supplier to end-user (and beyond, as companies under EU-mandated reclamation programs are discovering) delivers big profits.
For example, HP was losing out on the market for remanufactured toner cartridges. Rather than leave recycling to others, HP analyzed its value chain and then launched its own recycling and remanufacturing business. The company’s recent troubles notwithstanding, remanufactured toner cartridges provide a high-margin business that reuses 11 million cartridges each year and brings in $100 million in annual revenue.
