Outsourcing and Green Initiatives: Can they co-exist?

Traditional models of outsourcing are not conducive to promoting green initiatives, energy or operational efficiency, according to Tim James, director of green IT evangelist, sustainableIT.

James has determined that outsourcing relationships are largely not designed for efficiency, and this does not assist in driving green IT within the outsourced customers concerned. "Whilst on the face of it, outsourcing initially reduces costs and improves services through a more efficient outsourcing vendor, over a period of time, the service becomes more expensive in many instances," James states.

James points to a number of instances whereby the nature of the contract drives a relationship of inefficiency, with scant regard for the environmental impact. Outsourcing agreements are typically structured and charged on the basis of the concept of baselines, for example supporting 100 servers will cost you Rx, he says.

The dichotomy arises when you introduce new sustainable technologies such as virtualisation. Let’s assume now that through virtualisation you can consolidate down to 10 servers, a massive saving in energy and certainly a saving in terms of resource cost and real estate. In reality, this is not in the outsourcer’s interest, as it reduces their revenue stream and the baseline reduces, he elaborates.

Another example he points to is energy efficiency. The energy used to run services in the data centre is usually covered in an outsourcing agreement, and the utility bills are serviced by the outsourcer, but what about the end-user environment?

"The end-user environment, ie workstations and monitors, is the big hitter in terms of energy reduction, using as much as 39% of total energy in the IT environment, according to Gartner," James says. This is almost always paid by the end-user or customer, despite the fact that the outsourcer runs the service. There is no pain for the outsourcer to reduce energy in this environment and hence the customer continues to pay for inefficiency.

There are a number of other examples, all driven by baselines. Another is print output, the more you use, the more you pay for and the list goes on. It is in the outsourcer’s interest to get you to use more as this increases revenue. Outsourcers do not want you to become efficient as it will drive down their revenue. This is the fundamental problem with outsourcing and green initiatives.

There is light at the end of the tunnel, however. James is of the opinion that customers embarking upon renegotiating outsourcing agreements or signing new relationships need to take cognisance of green IT and build efficiency into the contractual vehicle.

"Writing clauses into the contract that promote and reward efficiency is probably the easiest way to overcome this dichotomy. Doing more with less, reduce, re-use and recycle as well as energy efficiency clauses should all be considered when signing a new agreement. New technologies may also need to be deployed that allow the measurement of baselines geared to drive efficiency, which do exist," he concludes.

Courtesy - Computing SA