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WP HP SustainableIT1 PDF
WP HP SustainableIT1 PDF
Table of contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Drivers for ‘Sustainable Product Service Systems’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Benefits of ‘Sustainable Product Service Systems’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
‘Sustainable Product Service Systems’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Roadmap to ‘Sustainable IT ’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Successful ‘Sustainable Product Service Systems’ – Call to Action . . . . . . . . . . . . . . . . 11
A complete literature review and summary containing the full references herein
along with an annotated bibliography are available in separate documents.
Citation: Hargroves, K., Stasinopoulos, P. and Smith, M. (2007) ‘Sustainable IT’ through ‘Sustainable Product
Service Systems’, a case study of Hewlett Packard, The Natural Edge Project (TNEP), Australia.
In many of today’s leading enterprises,
business decisions are based on
environmental issues as much as they
are on economic and traditional
business issues.
To overcome these two challenges, IT vendors, like Service Systems, HP has developed the Roadmap
HP, have coupled their established product and to Sustainable Product Service Systems. Using the
service offerings to create holistic, end-to-end product Roadmap customers can first identify which offerings
service systems for large enterprises. HP’s focus on they have already deployed and then construct the
developing a Sustainable Product Service Systems subsequent phases of the transition to a Sustainable
offering, leads the Australian market. In Sustainable Product Service System in a way that meets their
Product Service Systems, customers receive the performance and investment expectations.
services of IT systems while HP maintains ownership,
HP is currently providing Sustainable Product
responsibility and stewardship of the products. The
Service Systems to several customers, and cost
aims are to remove aged technology with minimal
analysis undertaken by customers shows that the
environmental impact while customers maximise their
up-front investment can be recovered in as little as
investment on their IT systems.
15 months through savings in running costs, which
Some customers may perceive a rapid transition to then leads to reduced long-term costs. Performance
Sustainable Product Service Systems to be technically analysis undertaken by customers also shows several
risky and economically costly. In response, HP enhancements including improved user satisfaction,
provides the option for customers to make the improved technical support quality and response
transition in phases. The Sustainable Product time, reduced downtime, reduced time to perform
Service Systems model comprises several modular upgrades, and consolidation of resources. Together,
product and service offerings. The modular structure these enhancements result in improved productivity
facilitates customers making either a rapid or gradual for customers.
transition to Sustainable Product Service Systems by
There are several actions that customers can take in
engaging offerings strategically and sequentially. To
partnership with HP to transition toward Sustainable
facilitate an effective transition to Sustainable Product
Product Service Systems.
Drivers for ‘Sustainable Market Forces, Legislation and Environmental
Pressures
Product Service
There are several market trends supporting
Sustainable Product Service Systems:
Systems’
• There is a growing tendency for IT customers to
prefer product service systems over un-serviced
product ownership. 5
500 workstations. Customers require their IT systems market-ready sustainable products and services.
to support their operations by providing the right • In Australia, Sustainable Product Service Systems
services as well as having the flexibility to adapt to can provide a competitive advantage for
new demands. Increasingly, customers are relying enterprises ahead of legislation that mandates strict
on the latest IT technologies, e-business applications management of waste IT products.
and mobile technologies to improve competitiveness. 2
• Compliance is another driver that is making IT
However, without in-house expertise, these new more service-centric. Not only do companies
business tools can also complicate IT asset have to deliver excellent customer service, but
management, add substantial cost and increase they often have to rise to the challenge of meeting
system downtime. 3
the regulations imposed on their industry at the
Constant technological advances, rendering same time. 7
yesterday’s innovations obsolete, require companies • There is pressure from consumers to reduce
to continually update technology to remain adverse environmental impacts from their end-of-
competitive. Today’s mobile lifestyle has moved more life products. Currently, 75 percent of end-of-life
technology out of the controlled office environment, computers are landfilled, with very few of the
8
making asset management progressively more 1000 toxic substances, other than plastics, being
difficult. Combined with an endless number of removed first.
expansions, mergers and acquisitions, many • There is pressure to reduce adverse social and
organizations are left with a concoction of diverse environmental impacts. The toxic substances in IT
technologies, making effective asset management products can be released into the industrial and
even more difficult. 4
natural environments at all stages of processing,
Sustainable Product Service Systems is the answer operation and retirement,9 and can result in an
many customers are looking for. Sustainable Product array of negative impacts on humans and other
Service Systems involve procurement, maintenance, organisms. 10
upgrading, and retirement of IT products and • Vendors, with their expertise and experience, have
services. Sustainable Product Service Systems can much better control over environmental and social
standardise the operations, release human and impacts than customers. HP leads environmentally-
financial resources and significantly streamline and socially-aware IT product design in Australia.
information access, storage and support operations.
It can also eliminate the risk related to pollution and 2
Lane, J.C. (2001).
waste regulations and market expectations. 3
Ibid; Macquarie Group (n.d.) Equipment life-cycle management; Vosicky,
J.J. (1992); Davey, N. (n.d.) quoting Melvin James.
4
Lane, J.C. (2001).
5
lexander (1997) cited in Heiskanen, E. and Jalas, M. (2003); Vosicky,
A
J.J. (1992).
6
Heiskanen, E. and Jalas, M. (2003).
7
Davey, N. (n.d.) quoting Marina Stedmann.
8
Environment Victoria (2005), p. 6.
9
Brigden, K. et al (2005), p. 3.
10
Ibid; Environment Australia (2005) pp. 8-9; Schmidt, C.W. (2002).
Benefits of ‘Sustainable Lower Costs for Product End-of-life Management
Another key economic benefit is relatively low costs
Product Service
for product end-of-life management, which includes
costs for collection, remanufacturing, recycling
and disposal activities. This benefit is particularly
Systems’ important because it provides an incentive to respond
to market pressure to reduce adverse environmental
Economic Flexibility and High Return on Investment and social impacts from end-of-life products.
Sustainable Product Service Systems offers customers
several economic benefits: 11
Lane, J.C. (2001); Sopko, S. (1992); Schroder cited in Dwyer, J. (1995);
• Since the investment is spread out over the contract Monash University (2002); Hewlett-Packard Development Company
(2004).
period, no large initial investment is required 11
14
acquarie Bank (n.d.) Leasing; Hewlett-Packard Development Company
M
and thus financial resources are freed for other (2006) Learn about the benefits of leasing.
activities. Spreading out the investment can also
12
15
opko, S. (1992); Schroder cited in Dwyer, J. (1995); Hewlett-Packard
S
yield improved purchasing power, easier financial Development Company (2006) Learn about the benefits of leasing;
Monash University (2002); Lane, J.C. (2001).
forecasting, tax benefits, immunity to interest rates,
16
osicky, J.J. (1992); Schroder cited in Dwyer, J. (1995); Hewlett-Packard
V
and improved access to loans and overdrafts. 13
Figure 1. HPs activities that contribute to Sustainable IT Solutions.
‘Sustainable Product products in every product category from any
28 29
Service Systems’
through returns, trade-ins, lease terminations
and donations. 31
Sustainable Product Service Systems integrate HP’s In Australia, HP collects end-of-life products through
three priority product and service activities: Design various partnerships. HP is the sole industry partner
for Environment, Packaging; Product Reuse; and in the Byteback computer recycling scheme, which
32
Recycling, as shown in Figure 1. is run in partnership with the Victorian State and
Local Governments. Through Byteback, HP recycles
Design for Environment and Packaging
computing and office IT products free-of-charge for
Sustainable Product Service Systems use HP products
Victorian residents and small businesses. Products
and packaging developed through the Design for
are transported to a dismantling facility and the
Environment program, which was developed in
components are then transported to domestic and
1992 to focus on three priorities; Energy Efficiency,
overseas processing facilities. HP also participates
Materials Innovation, and Design for Recyclability. 23
Sustainable Product Service Systems in several measurable improvements so far, with
One of HP’s offerings for enterprises is End-User further optimisations planned. For example, PC
Workplace Solutions (EUWS), which includes
34
support time is down by an estimated 34 percent.
Sustainable Product Service Systems. The number of printers is down, with a goal of
reducing total printers from 400 to 200 and thus
End-User Workplace Solutions demonstrate the
saving an estimated 360 IT employee hours.
cost-effectiveness and performance superiority of
Downtime is now eliminated - down from several
Sustainable Product Service Systems. Some
times per year. Finally, time to deploy a new
ustomers have measured their results from End-User
application is now almost immediate, down
Workplace Solutions:
from 3-4 weeks.
• The Universal College of Learning, in New
35
Krung Thai Computer Services, in Thailand,
Zealand, invested in End-User Workplace Solutions invested in End-User Workplace Solutions to
to improve the IT facilities for its 650 employees. improve its IT facilities (which includes 12,000
The venture delivered a 133 percent return on PCs). The investment has: reduced costs by 17.2
37
investment, which gives a pay back period of 15 percent, which is comprised of a 25.2 percent
months. The End-User Workplace Solution also saving in direct costs such PC acquisitions and
resulted in several measurable improvements. For services, PC management and support, and
example, the Help Desk now receives 310 calls support overhead; and saved 4.1 percent in
per month, down from 573; 80 percent of calls indirect costs such as end-user operations, and
are solved within eight hours; and there are zero availability. The End-User Workplace Solution has
38
unresolved issues carried over to the next period also resulted in several measurable improvements
(down from 118 per month). Server downtime, in its first year. For example, the call failure rate fell
a measure of availability and reliability, now from 12.6 to 2.3 percent, and the number of times
occurs 2-3 times per year, down from 52 times the agreed performance targets and response times
per year. The annual hardware and software were not met fell by about 50 percent.
product upgrades now take about two man-weeks
HP was able to provide a true end-to-end solution,
per 1000 desktop computers, down from 2 man-
offering full business and IT benefits to customers
months. Usage monitoring revealed that more than
from our portfolio of hardware, software and
200 computers could be, and were, eliminated
services, plus the financial management component
from the network. Finally, the number of computers
that no IT vendor has ever offered… 39
Figure1. HP Roadmap to Sustainable IT.
‘Sustainable IT ’
Customers will need to partner with HP to perform
IT asset management and develop an IT asset
replacement strategy. IT asset management
The success of Sustainable IT relies largely on three
creates opportunities for optimising Sustainable
key activities. These activities streamline the transition
Product Service Systems. Comprehensive IT asset
to Sustainable Product Service Systems through
management relies on assessing user profiles,
planning and minimising uncertainties.
maintaining accurate asset registers and establishing
1. Internal Culture predictable usage patterns. In addition, software
Customers will need to establish appropriate internal asset management involves managing media and
culture, which includes committing to sustainability in, licenses. For example, compared to hard media
at least, the IT business function; developing a good licensing, online licensing is easier to track and does
understanding of Sustainable Product Service Systems not require collection or disposal at product end-of-
concepts; and committing to the Sustainable Product life, and thus should be favoured.
40
transition to Sustainable Product Service Systems by HP offers HP Smart Cooling, a thermal assessment
42
engaging offerings strategically and sequentially. process that models energy and airflow in data
Using the Roadmap to Sustainable Product Service centres to determine the optimal product layout. HP
Systems, customers can first identify which offerings Smart Cooling reduces cooling demand and product
they have already deployed and then construct the investment, and can reduce data centre energy
subsequent phases of the transition to a Sustainable consumption by approximately 25 percent with no
Product Service System such that they meet their additional capital investment. HP also offers HP
performance and investment expectations. Dynamic Smart Cooling, a process that adjusts air
43
in a data centre.
• Higher server density increases energy
consumption. Many data centres now require more IDC (2007), p 4.
41
energy than can be supplied. Hewlett-Packard Development Company (2006) Saving energy with HP.
42
10
Successful ‘Sustainable • Where there is fear of high risk in changing from
a reliable and working IT system, the training 52
Product Service
should explain the Roadmap to Sustainable
Product Service Systems, and the options to
deploy Sustainable Product Service Systems in
Systems’ – manageable and cost-effective phases. This allows
the performance of each offering to be analysed
Call to Action before progressing.
• Where there is fear of forfeiting control of critical
There are several actions for customers to maximise and security processes, the training should explain
53
the success of Sustainable Product Service Systems. the transparent communication processes and
1. Develop Understanding and Acceptance shared management processes in managing critical
Poor understanding of the concepts and expected and security processes, and the cost savings from
performance of Sustainable Product Service Systems avoiding integrating the Sustainable Product Service
often compromises success. 44
System with the customer’s legacy processes. 54
11
To learn more, visit www.hp.com
www.naturaledgeproject.net
© Copyright 2007 Hewlett-Packard Development Company, L.P. The information contained herein is subject to
change without notice. The only warranties for HP products and services are set forth in the express warranty
statements accompanying such products and services. Nothing herein should be construed as constituting an
additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.
May 2007