05/10/11

By Richard Lanyon-Hogg, IBM Chief Technology Officer for Energy Efficiency

We’re all under pressure to ramp up productivity and cut costs but if strategic investments are to be protected, then productivity gains will need to derive from the supporting operational systems and infrastructure. All departments and teams will need to try to do more with less, perhaps finding new ways of working. But before committing to new investment, the first priority must be to pick off the so-called low-hanging fruit - securing those substantial savings that may already be there, and ripe for the taking.

The most notable example of this is energy efficiency. For every £1 spent on electricity powering IT and general office equipment in an organisation, almost a third — 32p — is wasted. Although this excludes items such as lighting and ventilation, it still represents typically 40% of an organisation's total electricity bill which, in turn, is likely to be its second highest cost after labour.

For too long businesses have largely been paying lip service to the problem. Merely appointing “green teams” or an “eco-champion” for an office is no guarantee of change. So what can an organisation really do to combat this waste? Well it has often been said that you can only manage what you can measure, so you must be able to find it and monitor it first.

I recommend implementing an organisation-wide assessment of energy use and carbon impact to find the exact source of the waste and to formulate a long-term and affordable strategy to stop it. Although some managers may have easy access to measurements, surprisingly few have the “big picture” of their environmental impact because, generally, electricity costs do not form part of the budgets they manage.

If waste were not enough reason to reduce electricity consumption, legislative compliance and brand reputation will also now play a role. The Government's CRC Energy Efficiency Scheme, which is intended to deliver emissions savings of at least 4.4 million tonnes of CO2 per year by 2020, is expected to cover 4,000 to 5,000 organisations. It came into force in April 2010 and an annual performance league table of companies and organisations will be publicly available, the first of which is expected in October.

In addition to measuring and reporting energy performance, organisations over a certain size will soon also have to become accustomed to the mechanics of market-based carbon trading. Decision-makers will need effective information, no different to what is needed in the context of many other investment and budgeting decisions. And the compliance burden is only likely to increase over the coming years.

So what do the low-hanging fruit look like?

Specific changes might include replacing desktops with more energy-efficient laptops or reducing the total number of printers. Multi-functional devices (that allow printing, copying and faxing from a single source) are also more energy efficient than having multiple machines, which consume energy as they warm up for operation as well as through the act of printing itself.

The biggest potential game changers lie in modifying the operational and functional architecture that underpins all the organisation’s systems. Challenging current designs can be complicated but necessary to achieve entirely new levels of efficiency. And the good news is, short-term savings can be used to fund any costs associated with strategic changes.

Employee behaviour needs to be monitored too if new, improved habits are to be mastered and made the norm. Options include explicitly linking energy responsibility to reward packages, introducing more automatic control of the working environment, or including relevant performance indicators in team and individual appraisals.

A collaborative mentality should also be encouraged across departments, for example between facilities managers and HR departments. Could certain building-maintenance services be more cost effectively outsourced? Can office and desk space be used more flexibly and imaginatively through the adoption of shift working and hot-desking? Is there employee demand for more home working opportunities and, if so, how will meetings and reporting lines be made to work? Can the IT team already accommodate such a move?

Ultimately any changes can only be made in an intelligent way if your business first begins to understand how much energy is used and where it is wasted on a daily basis. For those facing a need to cut expenditure and an imperative not to risk business opportunities, such steps are not optional — they are essential. Under the circumstances, there’s simply no more time — or watts - to waste.