KPMG Advisory Practice's director for technology innovation, Dr Bruce McCabe
Information technology sits at the top of the iceberg in respect to greenhouse gas emissions, but as the heartbeat of any business it plays a vital role in moving companies towards cleaner — and more profitable — business practices.
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Gartner analysts estimate the global information and communications technology (ICT) industry accounts for about 2 per cent of global carbon dioxide emissions, a figure equivalent to the aviation industry.
The research group released the statistic in 2007. At the time, it suggested IT departments need to clean up their own house first by, to name a few, measuring power consumption and increasing the use of virtualisation. In other words, analyse waste. Once these schemes were in place, Gartner recommends IT leaders develop initiatives that use ICT to reduce the enterprise’s overall environmental presence.
When it comes to progress on sustainability issues, chief information officers within Australian businesses can be split into two groups: Those still grappling with issues in their own backyard such as data centre virtualisation and cutting power bills, and those who are helping their organisation to become more sustainable.
The former is not to be sneezed at; without too much effort, the average large business could achieve more than 30 per cent in energy savings from changes in the data centre, KPMG Advisory Practice’s director for technology innovation, Dr Bruce McCabe says.
In terms of saving power, McCabe gives an example of companies monitoring power points and finding vending machines use up a lot of energy.
“There are boundless opportunities, it all has to do with facilities and operations management,” he says.
Increasingly, the number of CIOs belonging to the other pool — helping the business become more sustainable — is growing.
Using innovative sustainable business practices and progressive technology practices are well up the list of issues discussed at executive meetings.
Technology in aged care
Within the health industry, the biggest change underway is the development of home health monitoring.
Aimed at people with chronic diseases and the aged, home health monitoring uses IT and telecommunications to examine the health of patients in their homes. Patients wear devices that measure the likes of blood pressure, blood oxygen levels and can also remind them to take their medication.
In the US, the Department of Veterans Affairs recorded a 25 per cent reduction in numbers of bed days of care by using the technology. The use of the technology is still fledgling in Australia; senior researcher from ICT research centre NICTA, Leif Hanlen, says it requires an extensive period of adoption given the general demographics of the patients.
“Home health monitoring introduces technology with a different behavioural model which involves interacting with a widget, and this is confronting given the age of the patients.
“They are not disposed to technology such as remotes so there is a disconnect; the technology dreamed up doesn’t fit the bill of people using it.”
The technology creates savings, especially in fuel costs but, unless managed properly, it can result in data overload.
NICTA is looking into personalised monitoring — a technology that has initially benefited athletes, but which could ultimately be used across a range of industries.
Swimmers at the Australian Institute of Sport wear small wireless devices while training, which transfers data to a PC, eliminating its need for it to be manually entered by the coach after the session.
“It lets the coaches do their job,” Hanlen explains. “They can watch and encourage the athlete, and the device moves them on from acting as a review monkey so they can focus on being a coach.”
The wireless technology has been developed as part of NICTA’s Human Performance Improvement (HPI) project.
With the advent of the new wireless body area network standard (IEEE 802.15.6) this year, Hanlen’s team is developing new wireless technology which is small and uses a limited amount of power.
“The new standard enables lower power as the devices don’t need large batteries, also the devices will become much smaller,” he says, adding the new standard will make using wireless communications for the likes of home health more effective. “The current wireless technology is not designed for the body; it is not designed to be reliable with the human body.”
Using the waves for energy
Increasingly, CIOs from all industries will have to consider alternative energy sources as a standard business variable.
Houses and businesses installing solar technology and feeding excess power back into the grid appears to be a near certain outcome.
“There is plenty of opportunity for business, especially if they have big fluctuations in their power need,” KPMG’s McCabe says.
Another from of energy generation gaining ground in Australia is wave technology. The industry estimates wave energy plants could provide up to 35 per cent of Australia’s current energy consumption.
“CIOs should be structuring their systems to increase flexibility in their use of power,” Oceanlinx chief technology officer, Dr Tom Denniss, says.
Oceanlinx’s installation at Port Kembla has been connected to the grid and providing electricity since March 2010 to customers of Integral Energy. Denniss says the trial has “removed any doubts” that grid-quality power can be generated from wave energy technologies. The company is in the pre-development phase of commercial wave projects in several parts of the world and expects to make a major announcement regarding a regarding a project in North America in coming months. Denniss says many aspects of a CIO’s job will remain unchanged by the uptake of alternative energy sources such as wave technology, although some key areas will be affected.
“A major factor in the increased role of renewable energy sources will be the smart grid that is required,” he says.
How businesses can benefit from alternative energy sources is at the heart of the new business practices, sparked by the centralise-decentralise debate. Today’s power generation is centralised; decentralizing it means moving to smart grids — consumers and businesses installing infrastructure which allows them to proactively sell power back to the grid.
“Models will be in place to switch power around. For example, taking into consideration where the wind is blowing or whether it is day or night,” CSC’s environmental sustainability lead, Anthony Ogilvie, says.
“For the CIO, this is a dramatic change in scope and maturity as businesses will be engaging with the national grid.”
The challenge is not so much about the technology, Ogilvie says, but about systems integration, metrics and business intelligence. Business leaders who are serious about sustainability need to understand the benefits of smart meters and auditing using the likes of carbon accounting software.
“It is moving beyond looking at power savings around mainframes and using business intelligence to help their organisation mature up the food chain.”
McCabe agrees: “When getting numbers out of SAP, you should be able to get information about energy and carbon.
“Analytics will be more sophisticated as an instrument of things, such as smart meters being able to self report power usage.”
Moving towards bits instead of atoms
The field of analytics has moved on significantly since the advent of computers and the Internet. Ogilvie believes the move to “bits instead of atoms” is unstoppable and, if you think about Apple’s iBooks store or Amazon’s Kindle platform, the meaning of Ogilvie’s claim becomes clear.
“A lot of things can be replaced with bits, such as books and ebooks.”
The same theory can be put to vinyl records and MP3s, or paper-based accounts ledgers and Excel spreadsheets.
“A lot of transition has already started as to how business processes will look like into the future,” Ogilvie says.
Electric cars provide another burgeoning example — businesses with large fleets that drive short distances could make significant savings. The fully charged electric car sitting in a garage at night could also contribute to the electricity grid.
Of course, it has yet to happen. The idea of plugging in a car is anathema to most users. But initial perceptions are changing, and companies such as Better Place Australia are proposing a model where the car is purely a service of transportation.
“Rather than owning a vehicle you would drop off a battery and hire a charged battery,” Ogilvie says.
It is the type of interaction that is set to become increasingly common, as business moves to a service-orientated world and become more collaborative around sustainable initiatives, such as using each other’s waste stream as a form of energy. Ogilvie believes precinct areas will pop up and the likes of heat generated at a data center will be re-used to heat an adjoining conference centre.
Enterprise is already making the most of technologies such as tri-generation, which introduced a cooling process into co-generation technology and is already used by the likes of the National Australia Bank in its data centre.
Ogilvie says today’s CIO will have the emotional and business skills to push through the changes, but may fall down when it comes to policies, practices and changing their own attitude.
“CIOs will have to have the willingness to say when they are doing a refresh. To say, ‘I don’t get the power bill but I should take that into account and buy more sustainable machines, even if this means reducing my total operating costs’,” Ogilvie cites as an example.
“Many CIOs don’t have skills in the procurement area, so they do not have an awareness of, for example, the toxic material content and energy efficiency of machines.”
He maintains procurement has not traditionally been in the CIO sphere of awareness. But it’s a long road head. According to McCabe, on a global level, businesses can’t be sustainable purely on the basis of technology as it requires massive system changes and changes to how the economy works. It really is an enterprisewide endeavour.
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