The EU may call for ICT to lead the way to a low-energy future, but in the real world, ICT does what the business tells it, says Simon Perry.
In the lead up to this week’s ICT 2020 conference, the EU Commission has called upon the Information and Communications technology (ICT) sector to “lead the way” on dealing with climate change by “by setting itself concrete targets (for greenhouse reductions)”.
The Commission quite rightly identifies some important ways that ICT can contribute to achieving a low carbon economy, from smart metering of electricity to the increased use of IT in the construction, building management and transportation sectors. But the Commission is misguided in its call for ICT to “lead the way” and has made the grave mistake of misidentifying which part of the dog is controlling the wagging of the tail.
It’s important to remember that ICT serves the business, and not the other way around. This is true even in companies that make strategic use of ICT. ICT departments prioritise according to business imperatives, and while there might be some degree of deferment to ICT when scheduling business initiatives (for instance timing the launch of a new sales initiative based on the capability of IT to deliver the new web based sales infrastructure), technologists will always be part of a service function to departments like finance, marketing, sales and supply chain operations.
To say that ICT can lead the way forward on climate change is to misdiagnose the problem and in doing so to avoid the necessary strategic change required in the way that organisations operate overall. It seems that ICT is perceived as the magic method by which the relationship between economic growth and energy usage will be decoupled. A few simple examples will suffice to demonstrate that the EU’s call for ICT leadership is flawed.
Firstly, there is the question of efficiency. Both the IPCC and the IEA have calculated that efficiency efforts will deliver significant returns with regard to cutting energy usage, and therefore reducing greenhouse gas emissions. Not coincidentally, ICT vendors and ICT buyers are pushing hard on products and projects that claim to be more efficient than last year’s way of doing things.
So a data centre may well be redesigned with a consideration to cooling, rack placement, aisle layout and so on, and servers may be virtualised to ensure higher utilisation loads on the newly chosen “energy efficient” hardware. The ICT department may even take on some new workloads like supporting high-end video-conferencing as an alternative to staff business travel.
Meanwhile, even while in recession survival mode many business strategies call for continued and unbridled overall growth and increased market share. So having achieved a highly efficient operating level, ICT will simply be asked to deliver even further computing services to support that growth. More business demand ultimately equals more computing, albeit delivered more efficiently then before.
Eventually the push for expanded service delivery capacity will exceed the ability of efficiency efforts to reduce energy usage, and overall energy usage will rise again. Efficiency in the absence of a business level cap on overall emissions is often an encouragement to further growth.
Secondly, it is worth remembering that ICT is estimated to account for a mere 2 percent of overall global emissions with the other 98 percent coming from all the other things that businesses and individuals do. Indeed the EU Commission states “The use of ICT across all sectors of the economy and society can reduce the remaining 98 percent of European emissions.” Clearly the ratio between ICT’s emissions and “everything else” is going to vary when the same breakdown is applied at the level of a single organisation. In some organisations ICT may account for 20 percent and in some next to zero.
Regardless of the actual amount however, there is generally a clear link between some aspects of the actual business’s operations and the processing that ICT performs. Applications “map” to business functions if you will.
The bulk of the emissions savings will come from shutting down or tuning those business functions, not by addressing the ICT that supports them. Sure, ICT may measure, meter, manage and provide guiding intelligence to the business on how those various functions may be improved, but ultimately it will be a business decision whether or not the business functions are left as-is or are changed. If the business decides a function will continue, then ICT will simply be asked to get on with delivering the application environment in a cheap and efficient manner.
Finally, the emissions of greenhouse gases are being internalised into a company’s balance sheet via the proxy of real currency (meaning you’ll have to pay for it), via cap and trade and carbon taxation schemes like the UK’s Carbon Reduction Commitment. This will introduce a sliding scale of charges related to total emissions resulting from business activity.
It will be a business decision how such charges will be allowed to influence operational strategy, not an ICT one. Sales, Finance, the executive management team and the Board will ultimately decide, and the CIOs will do what they need to provide the required set of services.
This isn’t at all to say that ICT won’t play a strong role in achieving a low carbon economic model. Indeed, there will be additional opportunities and challenges ahead for the ICT industry as a whole and for individual CIOs to grapple with. The mantle of strategic leadership lies elsewhere however – dealing with climate change and formulating a successful path forward for the company is a challenge that must be spearheaded at corporate executive level.
With all due respect to the EU Commissioner for Information Society and Media, Mrs Viviane Reding: ICT isn’t the right place for leadership if we are to solve this problem correctly.
Simon Perry is a principal associate analyst at Quocirca, specialising in the implications of environmental sustainability on business models.