Do it for tomorrow, if not for today - mitigate rising energy and commodity prices

The credit crunch and subsequent recession has put huge pressure on budgets. Any new initiative or project needs to have a compelling business case with a quick return on investment to gain approval. This is a fact of life across the whole IT sector - including when it comes to 'Green IT' projects which are an increasingly important part of corporate IT strategies.

Firms and businesses are trying to find ways of making efficiencies and savings across the enterprise to find healthier positions in a tougher market. But when it comes to Green IT it begs the question - is there a need for some longer term thinking? Step outside of the typical 2 to 3 year planning window of most business and you may see quite a different global picture looming on the horizon. Predictions of energy price rises, supply issues and rising commodity prices in general are unprecedented and are likely to have a huge impact on the cost of pretty much everything. Should we be looking at the Green IT initiatives with the same short term return thinking or should we be preparing for a very different world and perhaps throwing aside the more traditional assessment of the business case?

Governments are trying to decide how best to tackle big issues such as economic recession, climate change, pressure on energy supplies and resource depletion. But with any short term model, such as limited political terms in office, it is difficult to persuade the electorate to spend now for the good of an uncertain future - especially when, financially, times are hard. I see this same issue being faced by many businesses now, just on a smaller scale. The question is the same. Do you invest now while the market is still relatively good and the money is there, perhaps even forfeit on profits today to build a more resilient and sustainable business for the future? It's a difficult proposition to sell in. But in my mind it is a clear and obvious way forward. The longer you leave your business exposed to rising prices before you react to mitigate, the more costly the mitigating action will be - maybe even prohibitively so.

The relative cost of travel will certainly continue to increase as oil prices rise and technology provisions such as video conferencing, collaboration tools, remote and home working will be vital to keep the business running. Hardware costs will increase, and there will be the need to sweat assets for far longer than we have in the past - from 3 to 5 years and maybe longer. Also, as equipment customers, we need to be putting pressure on the manufacturers to build more modular hardware, where components can be upgraded without the need to throw the whole piece of hardware away. The wasted embodied energy associated with refreshing entire units of equipment cannot continue as it is today.

Rising energy prices and legislation such as the CRC in the UK will put huge pressure on the costs of actually running IT equipment. It is forecast that within the next 2 years, the cost of running a server over a 3 year period will be higher than the purchase cost. Data centre providers are already looking at ways of passing on rising electricity and legislative costs to their customers, so the sooner you reduce your data centre footprint the better. Virtualisation, application streaming, SaaS, power management technologies and cloud are key innovations in this area. Server consolidation and virtualisation projects can take a number of years to complete in a large organisation, so don't leave doing this until the data centre bill becomes large enough to justify the project - it might be too late.

All of this is forecast to happen soon and at an accelerating rate. How long do you leave adapting your business? The warning signs are there, if we had an Enterprise Monitoring System across the world today, many of the readings would be amber or red. The warning signs are not being acknowledged as they represent a future problem not a current one, and no-one is saying that the problem is easy to address. We in IT should know. If you apply any basic form of ITIL to the global situation, there are many incidents in our queue which relate to just a handful of big problems. If we leave the problems unresolved, the more the incidents will flow. Capacity management is showing red and a need to respond and now is our opportunity to do so.

The most successful companies are not afraid to adapt and innovate to overcome a challenge. This challenge is a big one, but it can only get bigger – so let’s face up to it now.

Will Hitchcock is head of Global Application Systems at Linklaters LLP.