Aug 06 2008

Dell, Energy and Business Efficiency

Today Dell announced that it was going to be carbon neutral five months ahead of schedule.  Certainly, this is a great piece of news for the tech giant.  Yet, critics, including the WSJ's Environmental Capital blog, have questioned whether or not consumers actually care.

While it's definitely worth asking whether or not customers care, this line of questioning misses a key, if not the key, point to Dell's efforts.

Instead of viewing Dell's carbon neutral goal as a customer marketing strategy, instead we should be looking at how going carbon neutral is actually helping the company become more efficient across the board. 

In the era of Six Sigma and process improvement, many companies are looking at business strategies to improve business efficiency.  It begs the question: Why can't we look at energy as the prism by which we improve process throughout the enterprise?

Six Sigma looks to prevent defects and errors in manufacturing and business processes.  In this same vein, what if we looked at energy use as the final output, not widgets?  With rising energy costs there seems to be a strong case for focusing on energy as the center of all business processes.  

For example, by looking at how data centers are consuming energy, many companies, including PG&E, have found that by implementing more energy efficient servers, we can cut the total amount of servers necessary to meet our business needs and reduce our energy costs.  In this example, there are two efficiency gains - the amount of energy used and the amount of servers and space needed to meet the enterprise's IT needs. 

Co-benefits, like reducing servers and space, are at the heart of this approach.  Lime Energy, a company that helps organizations reduce energy use, has found that implementing energy efficient heating and lighting systems increases customer and employee comfort, resulting in significant productivity gains. 

And there are countless other examples out there similar to these.  PG&E has more than 80 distinct energy efficiency programs that have resulted in customer savings of more than $22 billion over the past thirty years.  We've never even looked at how our customers' energy efficiency efforts have driven additional process improvements or economic co-benefits. 

I admit, it's a unique approach to business strategy and one that hasn't been fully developed.  With no end in site for rising energy costs, it certainly warrants some additional thought. 

Do any readers have other examples?  

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