Power struggle: What role should IT play in reining in energy costs?

Is it time for IT managers to add 'energy czar' to their list of job roles? Google, Yahoo and other early adopters explore the options.

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The two men work in partnership to manage the 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 buildouts, 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 IT and facilities staff. The company has already moved some IT people into facilities, and Wills is now working on moving more facilities people into IT.

And he 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 when they come to communicate about maintenance, changes, upgrades," says Wills.

A new kind of power struggle

Some companies haven't embraced that type of energy-efficiency-driven reorganization but are nevertheless 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 its carbon dioxide emissions by 20% over the next three years. As a result, 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. Mark O'Gara, vice president of infrastructure management, who reports to the CIO, says the company has a goal of reducing power consumption within the raised floor of its data center by 10% this year. But IT consumes only 40% of the power used in the data center -- facilities and infrastructure consumes the other 60%, 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 consumption, such as improving air flow, which reduces the need for air conditioning. Other measures have reduced the 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 the next level of dialogue next year," he says.

Accountability for all

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 indeed beginning to realize the importance of tinkering with, or wholly reorganizing, their reporting structure to better control energy usage and costs.

At Bank of Montreal, the new energy-centric reporting structure makes it very clear who is responsible for what 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.

Copyright © 2009 IDG Communications, Inc.

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