Green IT changes outsourcing for all

perspective Consumers' and investors' concerns about corporate accountability--and the creation of new government regulations in favor of protecting the environment--have pushed 'green' issues to the top of the boardroom agenda and onto the outsourcing industry's growing list of priorities.

In August this year, the U.K. government announced its intention to introduce new rules to ensure departments consider environmental sustainability when making procurement decisions, helping the government to meet its target of cutting emissions, waste and water across facilities.

The guidelines have created a new level of expectations for outsourcing providers, with environmental concerns entering the formal selection process for suppliers.

The Brown-Wilson Group's 2007 Black Book of Outsourcing study indicates that more than 21 percent of U.S. and European companies that already outsource have added green policies and performance indicators to their outsourcing agreements. Almost every company surveyed plans to add green clauses to outsourcing contracts during renegotiation. More importantly for the industry, a further 36 percent have plans to move to a greener outsourcer within the next 12 months.

Many outsourcing giants are seizing the green market and investing heavily in reducing their carbon footprint. IBM, for example, has announced its 'Project Big Green' which aims to turn the company carbon neutral.

At the same time technology outsourcing is expected to rise significantly if organizations are to deal with the financial burden of compliance with environmental regulation in-house.

Outsourcing your data center may be more cost effective because suppliers have access to more efficient data center technology and can access economies of scale, for instance.

Because of the government's green guidelines, public sector organizations will now need to look beyond price when selecting a supplier if they want green credentials. The main requirement in the public sector is to achieve value for money, which means looking at the total cost and quality of a project. A low cost supplier, after all, may result in high maintenance and operating costs as well as environmental impact.

Managing green requirements from the outset of outsourcing projects is essential for a successful relationship to form.

Here are some points for all organizations to consider before entering into an outsourcing agreement.

• Outsourcers need to be clear about their organization's strategy for sustainable development, its environmental policies and how far they can be delivered through the project from the outset.

Despite the introduction of green procurement in the public sector and the new focus on green in the business community, we will only see an industry-wide change once the government implements legislation to make going green an obligation, with a green schedule in contracts and a green benchmark clause.

Rumor has it the government has already started down this road and if so, they have the National Outsourcing Association's support. Until then though, suppliers will only see green credentials as a value add rather than as a requirement.

Martyn Hart is chairman of the National Outsourcing Association.