Buying Green by Claudia Girrbach

Recently the project I am managing acquired new software and services. Purchases made during a project provide a great opportunity to deploy more sustainable solutions.

Benefits
A compelling reason to make a green purchase is to save on the operating costs. This can include reduced natural resource use, but also a green purchase can reduce spending on toxic disposal and reduce overall risk.

A compelling reason to buy green is to save green.

Even if green features are less important than other criteria, they can be used as a tie-breaker. They can be a good indicator of operational excellence and innovation.

Including green criteria will also signal to vendors that sustainable products are important. There is likely to be a green champion at provider companies who can use the “voice of the customer” as evidence to continue to improve products.

RFP
The first step is to include green criteria in the RFP (Request For Pricing). Your company may already use a standard RFP format, but most are easily augmented with additional green criteria. I have found sourcing, purchasing and project team members are supportive of including green.

The goal of the RFP is to uncover the environmental impact when operating the product, but also in building, acquiring, deploying and disposing of the product. The specifics may vary by type of product [Note 1], but the topics to consider for any RFP include:

Lifecycle – Has an end-to-end lifecycle analysis been completed for the product or product family? What areas utilize the most natural resources? Any certifications or eco-labels received?

Materials – What toxic materials are used? What are the plans to reduce and eliminate toxic materials? What recycled materials are used? What are plans to increase use of recycled materials?

Manufacturing – How much energy, water and other natural resources are consumed during the manufacturing process? How much waste is produced? How is waste handled?

Packaging – Is packaging right-sized to avoid excess while ensuring product arrives undamaged? Are manuals available electronically? What recycled materials are used in the packaging? What are plans to increase use of recycled materials?

Transportation – Can products ship together to avoid extra miles? Can more efficient modes of transportation be requested (water/rail). What are carriers transportation efficiency rating (energy used per ton-mile)

Operations – What is energy consumed during operations? Does product use variable energy depending on its load? Is there a hibernate mode? What is planned life? What other natural resources are consumed in operations? What waste is generated during operations – solid, water, atmosphere (including indoor air quality if applicable)? What is recommended use for optimal energy efficiency? How should configuration be tuned for different loads?

Disposal – Is an end-of-life service provided to properly dispose of product? Is the product easily recyclable? Is there an active market for the recycled materials?

Selection Process
Comparing the various candidates across these criteria can be complicated and a few key items that support your company’s eco goals may be more appropriate. For example, my company participated in the EPA’s Climate Leader Program that emphasizes energy savings and consequently our team placed a higher priority on energy use during operations.

One other way to simplify the environmental selection criteria is to rely on certification or eco-label, should the product segment be supported actively. Energy Star is a well established eco-label that provides simple metrics to compare energy use among products. [Note 2]

When comparing candidates, the total-cost-of-ownership (TCO) will provide the most comprehensive financial analysis. What appears to be the better deal when considering just purchase costs could become less attractive when operational and end-of-life expenses are taken into account. For example, a less expensive computer that uses more energy during its operations is a poor choice, both financially and environmentally.

Total Cost of Ownership (TCO) analysis exposes the complete costs to avoid sub-optimal decisions.  

To improve the return-on-investment, there may be grants, tax rebates, utility and other incentives available to defray the capital costs. Federal, state, local government and utilities should be checked to determine if any programs are available. [Note 3]

Although we selected the product primarily due to its functionality and commitment to innovation, we were pleased to find it required fewer computer resources than the current solution or some of the alternatives. We estimated that a 50% reduction in computing resources can occur.

Acquisition
Rather than acquiring a product, it may be greener to receive it as a service; especially if the incentives are aligned to make the provider behave greener to be more profitable. It may also be easier to negotiate green practices with a third party then with your colleagues, given priorities and workload.

It can be greener to receive the product as a service.

In my case, we decided to host the new software at a third party for one of the business groups. We found that a third party hosting service is incented to run its data center as efficiently as possible since the data center is its primary cost of operations.

During the project, it is prudent to establish regular tune-ups to ensure that the product is being used as efficiently as possible. For example, a building’s environmental system (HVAC) should be tuned by season or when significant change in occupants. Paying for these tune-ups upfront during the project will ensure they occur and make the change sustainable.


References

Note 1: Green Criteria

Image and green tutorial on life cycle assessment at EcoDesign Guide

Check with industry organizations for more specific criteria for a particular segment.

One other source is governmental agencies since they are mandated to support greener purchasing. Since 1995, the Federal Government’s Comprehensive Procurement Guideline (CPG) program promotes the use of recycled material. Buying recycled-content products ensures that the materials collected in recycling programs will be used again in the manufacture of new products.

For more details on packaging best practices, check-out an earlier post

Note 2: Eco-labels reference

Check out certification information

Note 3: Grants, incentives

Government website sharing info on grants and other incentives.

Businesses may also want to use Property Assessed Clean Energy (PACE) funding.

Green Project Management by Claudia Girrbach

A green or sustainable project considers its impact on the planet and people while achieving organizational goals such as profits. Gone are the days where environmental goals are in conflict with organizational goals. In fact, sustainability will decrease costs, reduce risks, and enhance brand value.  

Wasting natural resources hurts the environment and the bottom-line. Projects focused on operational efficiency to eliminate waste will reduce your company’s costs. DOW Chemical has been working since the 90’s to reduce waste at considerable profit. For each dollar invested on environmental efficiency, DOW achieved a $5 return.

Poor environmental practices are risky. When they become known, poor practices could lead to fines and legal proceedings, hurt sales, poisoned relations with the host community, make recruiting talent more difficult, and trigger stock prices to crumble.  When Coca Cola who bottles its drinks in-country wanted to expand in India a few years ago, the local community objected given the excessive water required when bottling. That same water was needed to irrigate crops and provide drinking water. By finding ways to conserve water during bottling, Coca Cola is now welcome in the 50% of its markets where water is under stress.

Your company’s brand may be enhanced by either improving environmental operations or providing products that are environmentally sound. Wal-Mart who just a few years ago was considered least likely to be green by many environmentalists, is now lauded as a role model by investing millions of dollars each year in operating efficiency and promoting greener products.  Wal-Mart remains a competitive for-profit company who credits sustainability with improving its triple bottom line (people, planet, profits).

Project Manager’s Role

Sustainability is a new frontier. Similar to globalization or IT a few decades ago, methods are still evolving and environmental considerations are often overlooked. That’s why creative, entrepreneurial, and hard-working projects managers are required to embed sustainability into each and every project. 

Some areas that will pay green dividends are already familiar:

1. Scope. Ensure that features and functions that are deemed “must-have” will be used. Otherwise those functions are a waste of resources and development costs. The National Science Foundation completed a study a few years ago that found that 50% of system features were never used and a significant percent were used sparingly. Those extra features also make products more difficult to use and frequently add to the on-going operating costs.

Iterative or agile development is a useful technique to help your team focus on a limited scope to start. The team may find that the smaller scope achieves the project goals with even better ROI when compared to a bloated solution. Google often uses this approach as it did when developing its Google Docs product to provide the best of Microsoft while losing the rest. The features cut were not missed by the typical user.

2.  Design. Instead of adding more features, direct your team’s creative effort to ensuring that the remaining features are usable and hence used.  Apple excels at this by making its products appealing to kids, grandparents and all those in-between. 

Look to leaders in the industry or lessons from other industries for design inspiration. For example, Cisco took its engineers to a recycling plant to learn how dismantling costs directly correlate to recycling profitability and how to design for end-of-life.

3.  Implementation. When acquiring equipment or expanding infrastructure to support a new project, more environmentally efficient products will pay-off in the time. Often the expense to operate equipment is overlooked, which leads to higher total cost of ownership. For example, a less expensive unit that uses more energy, does not hibernate when not in use or uses constant power regardless of load will be much more expensive to operate than an energy efficient unit.  

In addition to energy consumption, also include green criteria for materials used, transportation, packaging, maintenance and disposal at end-of-life.

Deploy infrastructure whenever possible in phases to increase its utilization. Infrastructure tends to be overbuilt. In 2009, McKinsey reported that Data Center utilization is typically less than 20% utilization.  

4.  Administration. When managing a project, reducing travel and printing of project documents can also contribute to a sustainable project. 

To ensure that the project you deliver stays green throughout its life, include on-going measurements such as operating and environmental costs, utilization of features and infrastructure and the financial and environmental benefits. 

Your current skills are critical to delivering projects within budget, on schedule and with quality.  By adding a green mindset when controlling scope, ensuring that usable and encouraging a sustainable design, your projects will also provide more savings, reduce risk and enhance your brand while making a positive environmental impact.  

To continue the discussion, this blog will focus on best practices and case studies for green project management: 

· How sustainability benefits not only the planet and people, but profits

· How to better manage projects that are focused on the environment such as clean energy and resource efficiency

· How to make every project greener 

To enrich the discussion, please share your insights, questions and learning.