Green Computing - Literature review Example

? Green Computing Literature Review School Green Computing Literature Review In the contemporary age, development of an understanding of Green IT and its leveraging is critical for the sustained growth and progress of a business. Green IT typically focuses on the equipment utilization and energy efficiency (Islam, 2012, p. 1). Firms that do not clearly understand the G-readiness have a tendency to approach the initiatives about Green IT on a reactive and ad hoc basis that structural requirements do not sufficiently support for competent execution. As a result of this, firms may have their resources sunk into the initiatives of Green IT without getting the expected returns. Since strategy, IT, and business operations are continuously being affected by the green issues, lack of G-readiness can deprive a firm of the opportunities to become increasingly competitive and successful (Molla and Cooper, 2009, p. 20). The aim of this paper is to carry out empirical investigation of the influence of Green IT on the return of investment of businesses. Green IT has been identified as the most important strategic technology of the year 2008 (Thibodeau, 2007). Although plenty of research has been done on the societal role of business, not much has been said about the influence of corporate environmentalism or Green IT policies on the competitiveness of firms and return of investment (Banerjee, 2002, p. 179). The main question that is being researched in the paper is “To what extent do the green IT policies affect the return of investment of businesses?” The idea of green computing started around 1992 with the launch of Energy Star by the US Environmental Protection Agency (EPA) (Ruth, 2009, p. 80). There are mixed opinions about the adoption of Green IT in businesses in the contemporary age. While some like the Intergovernmental Panel on Climate Change (2007) foresee huge threats associated with this trend, there are many others e.g. Will (2009) that deny or downplay the estimated or assumed risks. Among the professionals and economists who acknowledge the risks, some lay down the option of either accepting lower living standards so that the climate change can be slowed down or reversed or else, pay the price of making modifications and adjustments according to its effects. Others like President Barack Obama are more optimistic and see the adoption of Green IT as a way to have an economy that is not only more energy efficient but also cleaner as he said, “We will put Americans to work in new jobs that pay well and can’t be outsourced—jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain” (Obama, 2009 cited in Dedrick, 2010, p. 175). The community of information systems has started to seriously consider the importance of the role of IT in the creation as well as reduction of global warming. Dick and Burns (2011) carried out an exploratory study to determine the extent to which small businesses in North Georgia were utilizing the Green IT and also to identify the factors that are motivating or discouraging them to use Green IT, and found that although small businesses know the opportunities and possibilities associated with the Green IT practices, there is huge variation in the take-up. To date, most of the activity and discussion has been focused on the minimization of the direct impacts of IT on the environment by increasing the energy efficiency of the personal computing equipment and data centers. Organizations are feeling a strong incentive to adopt them because of the tendency of these efforts to cause a direct reduction of the costs associated with IT. A lot of research work is being done to introduce new and efficient ways of integration of Green IT in the work setup. Desai and Bhatia (2011) have introduced a Green IT Maturity Model (GITM) that can be used for the assessment as well as implementation of the services related to Green IT. The GITM model can be used to gauge and evaluate the level of maturity of an organization in being green. Likewise, Intel employs the Total Cost of Ownership as a guide while developing the cases of sustainable business along with return on investment for particular projects of retrofitting (Curry et al., 2012, p. 71). Similar approaches have been adopted by other firms, yet no single strategy can be identified as the best. Instead, “several leading companies have managed to deploy pockets of excellence in approaching sustainability through greener IT. The lack of an agreed-upon, cohesive approach is the result of several factors, the most important of which are organizational and structural” (Daoud, 2008, p. 3). Even if the green business practices are as meager as basic recycling processes, their impact on the bottom line of a firm is significant (Brooks et al., 2012, p. 16). Apart from that, firms have numerous choices about the type of volume of sustainable investments that they can make. Considering the size of IT investments of most firms, it is understandable that the relevance of Green IT is increasing and that it is catching the attention of the practitioner community. Green IT has evolved as a technological solution that facilitates the environment friendly practices of businesses. According to Murugesan (2008), Green IT is “the study and practice of designing, manufacturing, using, and disposing of computers, servers, and associated subsystems—such as monitors, printers, storage devices, and networking and communications systems—efficiently and effectively with minimal or no impact on the environment. Green IT also strives to achieve economic viability and improved system performance and use, while abiding by our social and ethical responsibilities” (Murugesan, 2008, pp. 25–26). Banerjee (2002) studied the perceptions of managers regarding corporate environmentalism; the process of integration of the environmental concerns of a firm into its decision making. A lot of research is being carried out to evaluate the link between the strategies of corporate environment and the criteria of traditional performance such as profitability. Banerjee (2002) created constructs that are valuable in the assessment of the relationship between these variables. In context of the increasing costs of compliance with environment, the effectiveness of a focus upon environmental strategy at the corporate level might be greater in the long run compared to a narrower focus upon the functional strategy. Mines et al. (2007) discussed three phases for the adoption of Green IT; the first of which is assessment, the second is planning, while the third is implementation. In the assessment phase, organizations realize their existing situation and establish a baseline of the initiatives of Green IT. Activities typically included in the assessment phase include development of a Green IT plan and idealization of a model of the return on investment. It is not just the adoption of Green IT that can be considered as a potential way to enhance the returns on investment, but also the strategic planning involved in the integration of Green IT in the work setup. For example, Intel IT identified and assessed the areas of business, as part of its program of sustainable IT planning, within its organization as well as across Intel to gain the maximum impact of sustainability advantages, potential returns, the cost investment, and Intel IT’s tendency to affect the activity (Curry et al. 2012, p. 65). Firms create roadmaps for specific initiatives related to Green IT in the planning phase and select the most important initiatives on the basis of plans formed in the assessment phase. The appropriate IT is specified, bought, and installed in the implementation phase. Professionals are realizing that both IT and IS can play a role in creating a problem as well as in the solution of the issues related to environment (Molla et al., 2009). Nevertheless, the investment in Green IT has not yet matured and such investments generally take considerable time before generating returns. A range of external and internal factors drive the adoption and diffusion of Green IT including technological, financial, regulatory, moral, and organizational factors. According to the result of the survey carried out by Molla et al. (2009), cost is the best disincentive to the adoption of Green IT, followed closely by the value of business. This much becomes clear from the survey conducted by Molla et al. (2009) that the tendency of a firm to adopt Green IT practices increases when the decision is economically feasible. There are numerous implications of this finding for the policy makers as well as the managers. It is very important for the managers to make accurate assessment of the costs and savings associated with a variety of Green IT practices. With the progress of the solutions from practices of simple energy saving to virtualization or other enterprise-lever practices, the level of complexity of the calculations increases. Chen et al. (2010) conceptualized and did empirical assessment of the effect of institutional factors upon Green IT’s adoption considering it a part of problem as well as solution. A standard response by firms to the uncertainty in case of unclear courses of action is mimetic isomorphism. Adoption of Green IT carries substantial uncertainty. A mindset shift in the managers is needed to deviate from the profitability’s bottom line. Practitioners face a new challenge of addressing the environmental issues’ moral component along with maximizing the profitability. It is possible to convert the moral component of an environmental issue into an issue that spurs consideration with the enforcement of standards of the industry. Such forms of punishment as license suspension as a result of dumping of waste and steep fines have an immediate implication for the firm in monetary terms. When the coercive forces are nonexistent, other behaviors of organizations and their results are very important for deciding in a moral issue. Eco-efficiency is defined as the delivery of services and goods that are priced in a competitive way and that are very important to people and have a special role to play in sustaining and improving the quality of life, while bringing the ecological effects as well as the resource intensity progressively down throughout the life-cycle to make them according to the carrying capacity of the earth. Eco-efficiency has alignment with the profitability and efficiency of an organization. Minimizing the consumption of energy and reducing the resource usage are potential ways of cutting down the costs as well as of improving the revenues. Institutional theory may be used to understand the adoption of eco-efficiency because of the existence of a strong social pressure for the efficiency of economy particularly in the liberal countries in spite of its alignment with the economic performance. Efficiency can be expected from the economic actors as a component of the social fabric. Pursuit of the objectives of eco-efficiency is not very obvious to alter the IS leaders’ institutional forces. According to Borup (2004), the foresight of green technology apparently has a large potential to contribute to the governance valuably for sustainability. Generally, the projects of green technology foresight have method designs that are not only system-oriented but can also address the future technology in the form of integrated solutions and developments rather than as partial and isolated developments of technical function. The studies of green technology foresight are based on the pull aspects of the problems of the social matters and environment rather than just the science push or technology push aspects. This is how they address mutual integration of both pull and push aspects. Curry et al., (2012) described the strategy employed by Intel IT in order to establish the sustainable IT as a contributor to the efforts of sustainability of the firm. Although Intel IT is still facing significant challenges, yet other organizations can benefit from the knowledge of the actions taken by the company as well as the practical lessons that it has learnt as they seek to leverage the sustainable IT. Individual behavior is an important factor that has a direct effect on the demand since consumers have a tendency to make the buying decisions that are considerate of the environmental consequences like purchasing locally-grown produce or a hybrid car (Dedrick, 2010, p. 180). Since individuals are integral parts of organizations, the way they behave can seriously affect the overall behavior of the organizations. Individuals that are affected by a variety of factors and organizational goals make a host of decisions in a firm. Information systems can have an effect on the carbon productivity which can therefore, sustain economic growth along with minimizing the GHG emissions. The capital of IT is like an input into the process of production. IT capital can substitute the IT for energy in the process of production, thus improving energy efficiency directly. In addition, IT capital can also improve an organization’s total factor productivity with the help of IT-enabled practices of management. Nevertheless, if the energy used by IT capital is comparable to the savings made by using it, these gains can be negated (Dedrick, 2010, p. 180). Some studies have shown that the costs of power that the IT departments utilize can be as much as half of the total costs of energy incurred by an organization (Harmon and Auseklis, 2009). Although it is expected that costs as well as the environmental impact of a company’s practices should be lowered with the adoption of Green IT, not much attention has been paid toward conceiving the strategic advantages of the sustainable IT services especially with respect to the creation of customer value, societal value, and value of the business. Although the potential of Green IT and computing technologies in the contemporary business practices is immense, not much research effort has been made for the quantification of the potential benefits and actual costs of their adoption (Dedrick, 2010, p. 178). After looking at a range of Green practices and technologies, the McKinsey Global Institute (2008) estimated their potential and cost to minimize the GHG emissions and reached the conclusion that the cost of a lot of practices and technologies is negative which means that with direct savings in cost, they pay for themselves. There are many incentives for the private sector to invest in such practices and technologies since their return on investment is positive. In case of the presence of social benefits to the investments of IT that extend beyond the private returns to the businesses, such investments are made by the society. Likewise, the governments, agencies, and individuals in the society establish the incentives for the businesses to make these investments. Nevertheless, even if the government is able to attain a strong public consensus to adopt an aggressive approach with respect to climate change, the issue is that there is not sufficient information for the guidance of the policymakers for the most affordable and effective combination of measures to be taken. King and Lenox (2001) found an association between higher financial valuation and lower pollution but discussed that this association might be caused by the strategic position and fixed characteristics of a firm, thus suggesting that ““When does it pay to be green?” may be a more important question than “Does it pay to be green?”” (King and Lenox, 2001, p. 105). Organizations around the world are rapidly realizing the significance of sustainability and green practices, thus getting the motivation to design or modify their activities to increase their level of environment-friendliness (Klassen and Vachon, 2003). There is limited research on the way Green IT plays a role in improving the performance of organizations by paving way for new sustainable processes and practices. The discussion of Green IT has not yet entered the mainstream practitioner literature. However, it is quite likely for the practitioners to follow the suit as Green IT gains increased attention of the academic community, and they show using the empirical research the potential ways in which Green IT can improve business practices as well as the return of investment. Some questions drawn from this literature review that are related to this topic and need to be researched include; how the different levels of environmental orientation relate to market share? Can a focus upon the corporate strategy be more beneficial as compared to a financial focus? Concluding, Green IT policies affect the return of investment of businesses to a large extent. Green IT is being increasingly adopted by companies all over the world in the present age and its use is expected to increase further with the passage of time. Analysis of most of the literary sources suggests that the adoption of Green IT is visualized as a way to improve the business practices so as to make them friendlier toward the environment and complying with the modern standards of ethics. This is clearly understood as a way to gain competitive advantage and earn the confidence and appreciation of the stakeholders in general and the consumers and the society at large in particular. Nevertheless, profitability and healthy return of investment still continues to be the most important factor that the entrepreneurs are concerned about and managerial perceptions of the effect of adoption of Green IT on the return on investment plays a decisive role in the tendency of a firm to adopt the Green IT practices. A good aspect is that more and more business entrepreneurs are starting to believe that the effect of adoption of Green IT on the return of investment is positive. Owing to its immediate effect on the business value, Green IT is likely to remain focused at the reduction of costs for certain time while it improves the performance of the data centers striving for energy. Business value is overall focused at enhancing the returns on investment. Business value is often directed at developing cost-based short-term solutions that tend to overlook the society’s as well as the business’s long-term interests. Business value can increase with the primary emphasis of green computing on cutting down the energy costs while increasing the societal value, yet such a short-term focus on costs is insufficient to ensure that the society and businesses would continue to reap benefits in the long run. To gain optimal benefit, a company should not solely adopt Green IT to create business value. References: Banerjee, S. B. (2002). Corporate environmentalism: The construct and its measurement. Journal of Business Research. 55, 177-191. Borup, M. (2004). Green Technology Foresight as Instrument in Governance for Sustainability. Proceedings of the 2003 Berlin Conference. pp. 386-408. Brooks, S., Wang, X., and Sarker, S. (2012). Unpacking Green IS: A Review of the Existing Literature and Directions for the Future. pp. 15-37. Chen, A. J., Watson, R. T., Boudreau, M., and Karahanna, E. (2010). An institutional perspective on the adoption of Green IS & IT. Australian Journal of Information Systems. 17(1), 23-45. Curry, E., Guyon, B., Sheridan, C., and Donnellan, B. (2012). Developing a Sustainable IT Capability: Lessons From Intel’s Journey. MIS Quarterly Executive. 11(2), 61-74. Dedrick, J. (2010). Communications of the Association for Information Systems. Communications of the Association for Information Systems. 27(1), 173-184. Desai, M., and Bhatia, V. (2011). Green IT Maturity Model: How Does Your Organization Stack Up? SETLabs Briefings. 9(1), 49-56. Dick, G. N., and Burns, M. (2011). Green IT in Small Business: An Exploratory Study. Proceedings of the Southern Association for Information Systems Conference, Atlanta, GA, usa. pp. 61-66. Daoud, D. (2008). White Paper: Beyond Power: IT 's Roadmap to Sustainable Computing. IDC. pp. 1-15. Harmon, R. R., and Auseklis, N. (2009). Sustainable IT Services: Assessing the Impact of Green Computing Practices. PICMET. pp. 1707-1717. Intergovernmental Panel on Climate Change. (2007). Climate Change 2007—Impacts, Adaptation and Vulnerability. Cambridge, U.K.: Cambridge University Press. Islam, F. (2012). Exploring Green IS Possibilities: Eco innovation planning for private companies. LUND University. King, A. A., and Lenox, M. J. (2001). Does It Really Pay to Be Green? An Empirical Study of Firm Environmental and Financial Performance. Journal of Industrial Ecology. 5(1), 105-116. Klassen, R. D., and Vachon, S. (2003). Collaboration and evaluation in the supply chain: The impact on plant-level environmental investment. Production and Operations Management. 12(3), 336–352. McKinsey Global Institute. (2008). The Carbon Productivity Challenge: Curbing Climate Change and Sustaining Economic Growth. McKinsey & Company. Mines, C., Brown, E., and Lee, C. (2007). Creating the Green IT action plan. Retrieved from http://www.forrester.com. Molla, A., Cooper, V., Deng, H., and Lukaitis, S. (2009). A Preliminary Report on Green IT Attitude and Actions among Australian IT Professionals. Working paper, School of Business Information Technology, RMIT University, Melbourne, Australia, pp. 1-13. Molla, A., and Cooper, V. (2009). Green IT Readiness: A Framework and Preliminary Proof of Concept. Australian Journal of Information Systems. 16(2), 5-23. Murugesan, S. (2008). Harnessing Green IT: Principles and practices. IT Professional, 10(1), 24–33. Ruth, S. (2009). Green IT — More Than a Three Percent Solution? IEEE Internet Computing. Thibodeau, P. (2007, Oct. 9). Gartner’s top 10 strategic technologies for 2008. Computerworld. Will, G. F. (2009). Everyone Out of the Water, Newsweek (November 7), Retrieved from http://www.newsweek.com/id/221608. Read More