The IT department buys the technology; facilities buys the energy . That’s the way it’s always been in corporate America. But that may be changing.
The IT department buys the technology; facilities buys the energy . That’s the way it’s always been in corporate America. But that may be changing.
As energy costs seesaw wildly and public concern over the environment grows, data centers are landing in the corporate cross hairs. And IT managers may find themselves on the hot seat, asked to account for the energy costs their systems incur. Some forward-thinking companies are even beginning to wonder if it isn’t time for their IT and facilities departments to merge.
Should CIOs get ready to add “energy czar” to their lists of job roles?
Management think tank McKinsey & Co. seems to believe as much. In a study presented last year at the Uptime Institute’s Green Enterprise Computing Symposium, McKinsey called on companies to move accountability for facilities operations to the CIO and to appoint an internal energy czar to better focus on the true cost of data center ownership , which includes both equipment and facilities expenses.
Jonathan Koomey , a data center energy efficiency expert at Lawrence Berkeley National Laboratory, agrees with the basic premise of the McKinsey study. But Koomey believes that energy costs should be managed at a level above both IT and facilities so that the person with that responsibility “is able to make a decision about total costs, rather than having his or her own budget in mind.”
And energy-minded corporations themselves? Computerworld ‘s spot check found that rather than making one person accountable, most organizations are scattering responsibility for energy efficiency through several organizations — IT, facilities and even marketing.
The Energy Czar
Google Inc. is the only major U.S. corporation we found that currently employs someone called an “energy czar,” although the czar is not directly responsible for data center costs. “My focus is on ‘greening’ Google’s energy supply,” explains Bill Weihl, Google’s green energy czar for the past two and a half years.
Weihl’s goal is to figure out how Google can use more sources of renewable energy and how to use that energy more efficiently. But when it comes to data centers, his role is advisory.
There is a single person at Google who is responsible for both equipment and operating infrastructure energy costs, says Weihl, and that’s his boss, Urs H??lzle, who is senior vice president of operations and a Google fellow. H??lzle reports to a senior vice president of engineering, who in turn reports to the CEO.
But everyone at Google is “empowered to think about total cost of ownership,” Weihl stresses. “That has led to a lot of innovation around energy efficiency,” he says. “We’ve been ahead of the curve in making trade-offs between the equipment budget and the operations budget.” For example, Google has been designing and building its own energy-efficient equipment for several years.
Yahoo Inc. doesn’t have an energy czar, but it does have Christina Page, who has been director of climate and energy strategy since July 2007. Her job is to coordinate energy-efficiency efforts across the company, including its data centers.
Page reports to Meg Garlinghouse, a senior director and the head of a committee known as Yahoo for Good, which focuses on community relations, including efforts to promote green practices . Garlinghouse reports to the senior vice president of marketing.
That raises red flags among skeptics on the lookout for companies more interested in “greenwashing” than they are in real organizational change, but Page bristles at the suggestion.
“I have a budget and a mandate that reaches across organizational silos and comes with the blessing of the co-founders,” she points out. “I have authority and flexibility to look for the leverage points across the entire company that will create the maximum positive impact in addressing global greenhouse gas emissions.”
Page says that, day to day, she shares best practices and works to help forge partnerships. “It’s really important to have a conversation between IT and the folks who run the data centers,” she says. Page talks with engineers and facilities staffers on a tactical level and with executives at a strategic level — and that can involve making recommendations to the CEO and chief technology officer. Total cost of ownership, she says, “is top of mind for our folks here, all the way up to the CTO and co-founders.”
CTO in Charge
Bank of Montreal has come fairly close to the McKinsey ideal by putting IT and facilities under one executive — in this case, the CTO.
As part of a program launched two years ago to better manage its IT equipment and infrastructure, the company created a new position: manager of data center governance. That person is responsible for forecasting IT equipment needs and translating them into language that the facilities department can understand, says Mike Wills, director of facilities management.
Wills, who helped create the new role, has 30 years of experience in IT, having moved over to facilities only about three years ago. The data center governance manager, Rocco Alonzi, is Wills’ counterpart in IT.
The two men work in partnership to manage Bank of Montreal’s overall energy portfolio. Alonzi reports to the senior vice president for enterprise infrastructure, who reports to the company’s CTO.
Wills, who forecasts utility needs, floor build-outs, and cooling and mechanical requirements, reports to the senior vice president of corporate real estate and strategic sourcing, who also reports to the CTO.
The structure encourages integration of the bank’s IT and facilities staffs. The company has already moved some IT people into facilities, and Wills is now working on moving more facilities people into IT.
And Wills has started requiring his facilities quality-control managers to be certified in ITIL standards for managing IT infrastructure, development and operations. “So now they have the same language as the IT people,” he says.
Some companies haven’t embraced that type of energy-efficiency-driven reorganization but are starting to hold CIOs responsible for IT energy use.
Last year, for example, reducing power consumption became for the first time an important part of Atti Riazi’s job at Ogilvy & Mather Worldwide. Riazi, who is worldwide CIO and a senior partner at the advertising agency, has a goal of reducing the firm’s carbon dioxide emissions by 20% over the next three years. Toward that end, IT has begun measuring its power use and devising ways to reduce it. Every six months, Riazi must report IT energy consumption to the CEO and CFO.
Reducing IT energy use is also a priority at medical insurer Highmark Inc. Vice president of infrastructure management Mark O’Gara, who reports to the CIO, says one goal is to reduce power consumption within the data center by 10% this year. But IT consumes only 40% of the power used in the data center. Facilities and infrastructure consumes the rest, with facilities reporting to the vice president of human relations and administrative services, who reports to the CEO.
IT and facilities are working together on ways to reduce energy use, such as improving airflow, which reduces the need for air conditioning. Other measures have reduced expenses in the facilities budget.
That said, facilities does not have a target comparable to IT’s for reducing its energy use, according to O’Gara. “Maybe that will be next year,” he says.
While very few companies are tackling energy management in just the way McKinsey envisioned, and energy czars are still few and far between, organizations are beginning to realize the importance of tinkering with, or wholly reorganizing, their reporting structures to better control energy use and costs.
At Bank of Montreal, the new energy-centric reporting structure makes it very clear who is responsible for which costs, says Wills.
“You cannot control these costs without aligning these accountabilities up,” he notes. “I think that’s the tough part for a lot of large organizations — to get that clarity.”
Harbert , a Washington-based journalist, is a frequent contributor to Computerworld.
This is the edited-for-print version of “Power struggle: What role should IT play in reining in energy costs?” which originally ran online.
