Green it is more than a 'feel good' issue.

• Author: Sinnett, William M.
• Position: TECHNOLOGY

Going "green" can produce green. That is, reducing adverse environmental impacts can save money. While information technology contributes about two percent of global greenhouse gas (GHG) emissions, IT-enabled collaboration solutions can have a significant impact in reducing the other 98 percent of emissions, while also delivering attractive financial returns. And, as energy costs rise, these financial returns are likely to improve.

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Adoption of such solutions is still in the early stages and requires varying degrees of cultural change in companies. Thus, there is a significant opportunity for financial executives to take the lead in driving adoption.

"Over the next five years, the unit cost of electricity will increase by about 30 percent in real terms," predicts Simon Mingay, vice president of Research for Gartner Group Inc., a technology research and advisory company. "The days of cheap energy will soon be over."

Revis James, director of the Electric Power Research Institute Energy Technology Assessment Center (EPRI), provides a similar perspective. "Generally, we expect electricity production costs to increase as new investments are needed to meet demand growth and to transform the generation mix to lower emissions," he says.

James says that a 2009 EPRI economic analysis indicates that, under the assumption of stringent CO2 emissions constraints and various mother technology assumptions, wholesale electricity production costs might reach $95 per megawatt hour in 2020--which is roughly 40 percent higher than the national 2007 average cost of $66.

This significant cost increase will affect companies in different industries in different ways, depending upon their energy usage. Not only will they be impacted, but their entire supply chain could be affected. If they have not already done so, financial executives should analyze all key business processes to see where energy use can be optimized. IT departments can help.

Mingay explains that during the 20th century, the role of IT was to enable labor efficiency. Now, in the 21st century, he says, "the role of IT will be to enable energy efficiency."

Energy efficiency can be accomplished in a number of ways--for example, substituting travel with video conferencing and Web conferencing tools such as Tele Presence and Web Ex by Cisco Systems Inc.

Remote Collaboration

In 2006, Cisco's Chairman and Chief Executive Officer John Chambers made a commitment to the Clinton Global Initiative (CGI) that Cisco would reduce all of its air travel worldwide by 10 percent, in absolute terms. One way it found to reduce air travel was to encourage remote collaboration. Later that year, Cisco began deploying Tele-Presence, and acquired Web Ex the following year.

Cisco Tele Presence meetings incorporate high-quality audio and life-like video in a specially tuned environment. "The experience is as good as actually being in the same room with the other participants," says Brian Suckow, director of Cisco's Internet Business Solutions Group.

Tele Presence can be used for almost any type of meeting, including in-house staff meetings, meetings with customers and suppliers and training. Cisco has doubled the number of its internal...