Why Green IT Isn’t Enough If You Want to Cut Energy Costs

IT Director Gordon Katz estimates that by setting employees’ computer monitors to sleep when they aren’t being used, he saves his company enough electricity in a year to light the Cleveland Browns’ football stadium for two seasons. He’s sure this saves money for Ohio-based law firm of Porter Wright Morris and Arthur; he just doesn’t know how much.

“We don’t get a dollar-for-dollar savings,” he says. With 230 lawyers in six U.S. cities, Porter Wright shares space in several buildings, paying a percentage of the total power bill in each place based on how much space it occupies, not how much electricity it consumes. But the firm has a sustainability policy, modeled on one suggested by the American Bar Association. “It sets a tone,” adds Robert Meyer, a lawyer who heads the firm’s Green Practice Group. “It allows us to take things on issue by issue and see where we can make progress.”

If you can measure how much fuel and electricity you consume, the benefits of reducing energy useto the environment and to the bottom lineare relatively straightforward. It’s tempting for CIOs to focus first on IT, which often accounts for a large chunk of the energy bill. But you can’t stop there. You need systems to support sustainable decisions in all types of operations, from how you run manufacturing plants to where you put your warehouses to the temperature of your office buildings.

Expanding Beyond IT

Tony Scott, CIO of Microsoft, says he got interested in how much energy IT consumes back when he was CTO at General Motors in 2002. “We were a procurement-focused organization and we negotiated hard with suppliers to get low unit costs,” Scott recalls. He calculated that many of the computers GM bought would cost more in energy consumed than in their purchase price. Yet at the time, energy costs weren’t factored in when deciding what to buy. Still, Scott started reading up on green technology.

“I talked to some folks who were developing battery technology,” he says. The conversation expanded to managing energy in buildings. “It was computer technology that was helping get better control over all of those things.” Later, when he became CIO at Walt Disney, “one of the first things I asked was how much we spend on energy in data centers, and no one could tell me.”

After he joined Microsoft in 2008, Scott teamed with Rob Bernard, the company’s chief environmental strategist, to consolidate and virtualize the servers engineers used for product development. The company says the energy-efficient facility (with its state-of-the-art cooling system) will ultimately save 12,000 metric tons of carbon annually. That’s the equivalent of taking 8,400 cars off the road every year.

Beyond data centers, Scott concludes that “technology is really the key to managing energy going forward. The more we apply technology to all the wasteful things we have, the better off, ultimately, we’re going to be.”

Before that happens, however, IT leaders must shift their focus, says Richard Watson, director of the Center for Information Systems Leadership at the University of Georgia. Most CIOs pay so much attention to computer hardware that they miss the bigger picture, he says, which includes managing transportation, manufacturing operations and water use.

“We have to get hold of this idea that information can reduce energy consumption,” Watson says, adding that the next step will be designing systems to report energy usage so companies can make better decisions. “We’re still learning what this is about.”

Contact Executive Editor Elana Varon at evaron@cio.com. Follow her on Twitter: @elanavaron.