Manufacturers -- How Necessary Is a Green Offering in the IT World?

Sept. 23, 2011
Some manufacturers are more sensitive to how sustainability is connected to reputation, while others seek lower energy consumption.

Every year, IDC's Vertical Group conducts a large-scale survey of North American businesses and organizations to determine information and communication technologies or information technology (ICT/IT) priorities and spending. This year's survey with 5,722 responses asked how important it is for IT vendors to have a "green offering."

In most cases, the answer is one of ambivalence, just slightly lower than neutral importance. A closer look at the data reveals that a green offering is of slightly higher importance in some segments, such as process-based consumer products manufacturers and metal manufacturers, and of slightly lower importance to manufacturers in the automotive industry (OEMs, suppliers, etc.)

We could draw all sorts of conclusions from these numbers: certain types of manufacturers are more sensitive to how sustainability is connected to reputation, others are looking for IT offerings that lower energy consumption, and some are so sensitive to profitability that they prioritize cost. Regardless of the explanation, we know that no single industry segment places a high level of importance on the availability of a green offering.

Our data reminds us that greener products (or offerings in general) don't automatically make a product more appealing to the buyer. When it comes to choosing an organization's top ICT (or IT) vendors, our research shows that "customer service/level of support and services" is the most important factor, but we'd like to draw attention to the factor that came in fourth in our ranking -- technical superiority/innovation.

Certainly, the more technically superior and innovative ICT vendors should be able to detail how an IT investment can improve the buyer's environmental footprint, whether that's through requiring less energy to run a piece of IT hardware or an application's ability to run a piece of manufacturing equipment using less energy, for example. The best ICT vendors should be using innovation to make their offerings even better from a sustainability perspective. And we want to see and do see manufacturers weaving sustainability into the IT purchasing process, into how IT vendors provide technical superiority, and into what buyers need to run their businesses.

Ideally, sustainability shouldn't exist as a separate requirement. Rather than being surprised by the low importance of a green ICT offering, we should focus on what the business prioritizes, and then figure out how IT will contribute to a greener path to reach those goals.

Right now, manufacturers' priorities are in areas like production scheduling, inventory planning, and quality management (see Figure). These priorities reflect what's important to manufacturers, what they want to improve, and what helps them operate their businesses on a strategic, tactical, and operational level. We could also think about how investments, ICT and other types of investments, are funded.

It's my experience that companies rarely have sustainability budgets; it's more common to see a budget associated with business process improvements or functional organizations, not sustainability (though we could have another discussion about whether or not sustainability should be considered a business process improvement).

Green shouldn't necessarily be a separate investment area or product offering. But what we need to do is make sure that how we define the approach (in the form of an IT product or service) to each one of those solution areas should include green thinking. It doesn't make sense to go out and purchase a green production scheduling system, for example. Instead, we want manufacturers to have the option of an innovative scheduling system that gives them the ability to reduce energy consumption, minimize waste, and satisfy customer orders and production goals.

We should also think about new trends and innovation in IT, and how they relate to improving a company's environmental footprint. Can newer technologies like cloud, mobile devices and applications, or machine-to-machine communication make the business process or the IT system greener? We think this is a question worth considering as manufacturers make new investments over the coming year. And let's make sure that IT innovation includes sustainability across all of the applications manufacturers depend on and invest in.

Innovative IT products and services should include green thinking; simply having a green offering isn't enough.

Tell us how your company is incorporating sustainability into your business and how you use IT. Join our conversation on the IDC Insights Community

Kimberly Knickle is practice director, IDC Manufacturing Insights .

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