Saturday, April 2, 2011

Green Business Solution – Different Perspectives

Changing user attitude is the toughest part of any sustainability solution. More or less we all understand our carbon footprints and how we can lower that impact. But this is a Game Theory problem – ‘Even if I do my part of sustainable living others will not and we all will face the same circumstances. Then why should I compromise?’ My solution tries to address this problem. Here are my proposals:

Charge as you use (variable pricing) and increase the rate enough to motivate people to stop wasting:

Consider the use of water – we pay fixed rate slabs for using water rather than using per gallon. Meaning you may use anywhere between 0-500 gallon and still pay the same price (say $20 per month), 500-1000 gallon and still pay a price slightly more than 0-500 gallon usage (say $30 per month). As you see the price of Natural resources such as water is still very low (who cares for $20 or $30 if you earn $5000 per month) and the fixed slab pricing does not allow enough rewards to motivate sustainable usage. I provided the example of water but this is true for almost all natural resources including oil (oil price is not enough high to motivate people to use public transport or carpool or at least consider reasonable use of car driving – people can afford to drive 60 miles every day to go to office and then another 20 miles to buy groceries – they don’t care to live near office or do grocery shopping once a week), paper(we all fire printouts without considering the need – the price of paper is so low that it does not matter), meat(meat prices are not high enough to motivate people to eat vegetarian food) etc.

My proposals –

Follow the best practices of Steady State Economics (SSE). Let’s first understand the basic philosophy of SSE

Basic Concept of Steady State Economy:
We measure the Progress of an Economy by GDP growth numbers or Performance of a Company by Earnings growth. Higher the growth, better the case for it.
But proponents of the Steady State Economy think that perpetual economic growth is not possible considering the fact that the natural resources are limited. We have limited space in this world (till the time, we can colonize other planets) and hence if we continue to increase the population and everyone starts to consume more and more each day (conventional concept of growth) we cannot sustain. We won't have enough food to eat, enough place to live and enough clear air to breath. On the other hand recession or economic contraction is not healthy or sustainable. Hence a new model was created: Steady State Economy (SSE). In SSE we don't look for growth but concentrate on improving the quality of existing life. A SSE provides a better means for current and future generations to achieve a high quality of life without undermining the life-support systems of the planet. SSE tries to price resources in an itemized manner (for example Cap-and-Trade) so that right kind of checks-and-balances is in place ensuring right amount of usage by everybody.
"A steady state economy features policies that aim for sustainable scale, fair distribution of wealth, efficient allocation of resources, and high quality of life.  Living in such an economy would be more satisfying for citizens today and provide more opportunities for future generations. One way to think about a non-growing economy is simply to look around at the current state of affairs. If the economy stopped growing today, we would have just what you see out there. We would have our current population and stock of natural and human-built capital into the foreseeable future. Investment would be redirected toward maintaining those stocks of capital. Energy usage would stabilize (or decrease if we started using energy resources more sparingly and more efficiently). The difference in income levels between the richest and poorest people in society would shrink. Society would focus on economic development (such as educational empowerment, poverty alleviation, and high-quality employment opportunities) rather than uneconomic growth." 1

Price natural resources on variable basis ($.1 per gallon for first 50 gallon, $.2 per gallon for next 50 gallon of water uses etc.) – this will ensure people control the use of resources for their own financial benefit.

Price natural resources at much higher rate - Account and include the Carbon footprint price to increase the price – Price of water, oil, paper, meat need to increase to motivate people to moderate the consumption.

Benchmark people’s behavior against acceptable use:

People perform better if they get constant feedback on how they are doing. Today we do not have intelligent metering systems suggesting the usage of natural resources.

My proposals –

Provide intelligent metering and alerting system so that people can measure their performance against the acceptable numbers: example- if acceptable use of water for a bath is say 10 gallons – once a person has consumed 5 gallon of water he/she will get an alert that “You have consumed 50% of the acceptable water use for one bath”. Once the usage increases to say 15 gallon it will stop the water flow and provide an alert that “You have consumed more than 150% of the acceptable use of water. Think Green. If you really need water to complete this case please restart your count as a separate case”. Stopping the water flow will make sure two things – 1. If the water flow was accidentally on it will be stopped thus reducing any wastage. 2. If the user is overusing resources it will make a serious case for him to change his behavior.

Case for office us of Paper, Electricity etc.- Create a alert and accounting mechanism for responsible use of office supplies – You will get an alert if you are printing above specific number of pages or your computer is Switched on at night.

Use Smart Devices/Processes to reduce waste

We waste a lot of natural resources which can be stopped by introducing smart devices. If we need hot water we have to keep our water flows open for some time before hot water starts flowing. That creates a lot of water wastage.

Similarly when we send emails to multiple people they each receive individual copies of the same email – what a waste of server space!!

My Proposals –

For minimizing water waste: Create an intelligent device which will start hot water flow when the water is ready hot (say at a set temperature).

For minimizing email server space wastage: Rather than sending separate copies of emails to each recipients keep a single copy and provide read access to that copy as email. If someone ‘deletes’ the email only the view access is deleted for him/her and not the actual email. If someone ‘Reply All’ the original email another conversation copy is generated only for the added comments and appropriate access is provided to the ‘reply All’ recipients. Again if someone deletes the Reply all email the access is deleted and not the whole email.

Less is more in Green IT - Tao minimalism can make organizations more effective, profitable and green:

With the coming of cap-and-Trade and other Green regulations IT will have more importance in reducing the waste, minimizing the costs and increasing the profits. Organizations can improve their Green strategy by integrating it with the Core Business strategy and changing the Organizational culture. The Organizations can become more competitive and create long-term shareholder value by following a minimalist approach and focusing on the core competencies.

Two different (conflicting) roles of IT:
  1. Information and Communication Technology (ICT) has potential to reduce the Business As Usual(BAU) Carbon footprint by 15%(Re-Engineering save of around USD 1015 Billion by 2020) by creating smart systems(smart energy greed, Intelligent Transportation system etc.)
  2. At the same time global IT industry generates almost 2% of the Global Carbon Dioxide emissions (equivalent to greenhouse gas as the world's airlines as per Gartner study) and this share is increasing because of information overload (Typical Data center capacity double every 5 yrs etc.).

To optimize the role of IT industry we need to make sure we build smart systems which can make smart Decisions to reduce the Carbon footprint by improving the Processes, reducing redundancies, improving utilizations etc.

At the same time we need to make sure we minimize the share of Global Carbon footprint of the IT industry. This can be done either by improvement in Technology (such as Virtualization etc.)Or by minimizing the unnecessary data Processing (this is like either you control the population or minimize the per capita consumption to control the overall effect).

In this solution I will concentrate on the strategies to minimize this Information overload and thus making organizations more effective, profitable and green. The aim of this solution is to show that by integrating Green Strategy to the Core Business strategy and by making an Organization-wide culture change organizations can achieve this goal.

Culture change: An Inevitable component of Green IT strategy

Corporations have historically given more importance to doing more things. The employees have been encouraged to do more: Deliver more Projects, Manage more People, Create more knowledge artifacts, send emails to more people (Distribution list and Reply all), attend more meetings, stay more time in office etc. Unfortunately this mindless growth culture is not effective. We need to appreciate the fact that by doing less we can achieve more. We can save time, money and energy by selectively creating what we do best and increase our effectiveness.

We think the organizations can improve their Carbon footprint by following a minimalist philosophy. Too many activities go on in large organizations without any planning and focus on the long term vision. We do too many Projects which are not aligned with Long term Business strategy. We have many activities or processes which are redundant and can be avoided (thus reducing cost and carbon footprint). We spend too much time on doing and too less time on thinking “What is the best thing to do and how best we can do it”. We produce too much unnecessary things and thus focus less on which is really important. We need to stop this noise and concentrate on core things which are really important. Let me provide you an example:

Green enthusiasts always push for minimizing the use of paper. This is absolutely necessary and a must for Green IT strategy. But what we generally miss out is the cost and carbon footprint associated with Electronic documents. We create millions of documents related to Projects, processes, Knowledge artifacts, financial reports, emails etc. but never care about the quantity and quality of those documents. Many times they are just simple crap, do not add any value, redundant and can be eliminated. Just consider the Storage Server utilization and related power costs. Worse we make these documents searchable (Intranet or Internet). Just consider the recurring cost, time; power and energy we waste on these searches (consider the carbon footprint of all these servers). Good example: Company Knowledge repository – thousands of copy-paste documents without adding any value or any Google search producing too many unnecessary items.

If we run the numbers these costs are serious. Just multiply the number of documents with number of users making number of searches every day.

How to improve?
  • Assess the IT Infrastructure and processes for redundancy and quality of data. Put stringent quality control on the documents which can be searched across the Enterprise or Internet.
  • Minimize junk data entering the system. Design an intelligent IT system which will have controls in place to persuade users to enter right/True data. This can be done by integrating IT systems across the organization and putting logic in place to validate the entered data based on available data in the system.
  • Concentrate on reuse and minimizing redundancy. Rather than creating multiple similar Know-how documents create a single one and allow everyone to improvise it (wiki style).
  • Encourage quality over quantity: Allow your employees to think and come up with something really good rather than ordering them to create twenty ordinary items. Improve effectiveness and productivity (by quality not by quantity perspective).
  • Discourage email (especially group emailing), meetings and other time-waster wherever possible.
  • Block Junk websites and emails as much as possible through Security policy implementation.
  • Sensitize employees on the importance of green behavior and how small changes can ultimately lead to big savings. Create right reward and recognition scheme for motivating employees to come up with innovative ideas to save.
  • Use automation for implementing green behavior. Create a popup form if some user fires a printout of more than 5 pages (ask about the need of the printout and audit the responses).

Integrate Green Strategy with the Core Business strategy:

Beside the culture change, we need top management focus to align Green IT strategy with core business strategy. Superficial execution of Green IT strategy will not be successful. Green IT Strategy needs to be integrated with the Core Business Strategy of creating Long term Shareholder value. From that perspective Green strategy can be simple: Focus only on your key strengths, do less, do it smart, avoid waste and achieve more.

Strengthen your core Business and selectively invest on Projects which creates long term shareholder value. Gartner research shows 80% of the IT Investment money is ‘dead-money’ - simple waste of resources.2  These investments do not add any value to your business but add to your Carbon footprint and cost numbers. Improve the quality of Investment Decision making system to minimize this waste.

How to improve?
  • Focus on High Impact Investments and minimize the waste. Consider improving the Investment Decision making process by creating an intelligent system based on actual data (rather than vague estimates).
  • The best business case for Green IT can be minimizing waste, reducing costs and thus increasing profit. In future with Cap-and-trade and more regulations in place Green IT will be the core differentiator in the marketplace.
  • Analyze your Organization cost and carbon footprint (including Energy audits for operational costs) and find out which are the big impact areas you can attack to control it. Focusing on small number of Projects will make it more effective. Do something really meaningful rather than selling ‘The idea of Green’ and spending big money on PR (Green contest, Earth day or Green apparel).
  • Effective use of Green IT strategy can help to reduce the Carbon footprint of other departments within the organization if the strategies of these departments work hand-in-hand. As a real-life example, international retail giant Tesco found that IT’s contribution to the company’s total carbon footprint is only 4% — but that IT has the enabling potential to reduce total carbon footprint by 20%.

How we can solve world obesity crisis, food crisis and green energy crisis in one go

Let’s analyze some history. Today our primary source of energy is fossil fuels such as coal, oil, natural gas etc. They were created millions of years ago from the decomposition of forests etc. They are so-called non-renewable sources of energy because it takes millions of years to recreate that (we consume them at a much faster rate). Their energy density is very high and that’s why they are much easier to use than renewable sources of energies such as solar, wind etc. But bottom-line is ultimate source of energy in earth is sunlight. And photosynthesis by plants (green) is the only process to capture that energy which can be used by living organisms (plants and animals etc.). We need to find out how (chemical or physical transformation process) the decomposition of forests improved the energy density of the fossil fuels – was this just the addition of millions of years of stored energy in a very less volume or something different. That is critical but even if we don’t understand that we can still find some temporary solution. We have seen biofules such as ethanol mixed with gasoline to supplement our energy needs. Only problem with that is ethanol comes from sugar – and sugar plantation needs a lot of water and agricultural space. Critics say, use of biofules increase the price of food (simply by demand supply curve – biofules provide better price for farmers than rice or other foods and hence they are encouraged to plant sugar than other food items) and thus cause world food crisis.

Now let’s analyze the problem of obesity. Evolutionary biologists suggest that our body was built to do a lot physical activities. With the development of Technological innovation the need for such physical activity has reduced dramatically. But we have continued to consume the same amount of food/energy intake causing mass obesity. Doctors suggest doing some physical activity in the gym such as running in the treadmill etc. to compensate for the extra calorie intake. Now let’s see how all these problems can be merged into a single solution.

My proposed solution
Instead of consuming electricity driven treadmill why can’t we create man driven small electric generators (instead of motors we will create generators so that the energy conversion is just the opposite from mechanical to electrical). Also we will create different ways to capture manual energy (mechanical energy) and transform them into electrical energy. Possible ways - pressure while walking in roads can create electricity etc. Advantages – we can continue to consume enough yummy food we like to eat (no diet and as we can eliminate biofules our food prices will be within control – no food crisis), we will still have to do physical exercises to keep ourselves in shape but at least it will have motivational aspects (we can generate our own energy and reduce our electricity bill rather than increased electricity bill for gym machines). We need technological innovation (such as smart grids etc.) but I believe still this is a viable solution for obesity, energy and food crisis. I am not suggesting this can replace fossil fuel use 100% but with other renewable energies such as solar, wind etc. we should be able to meet a major portion of our energy needs.

  1. What would a steady state economy look like?

  1. Gartner Research that 80% of the IT Investments is dead money

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