Where the rubber meets the road: How users see the IT4IT standard building competitive business advantage

The next BriefingsDirect IT operations strategy panel discussion explores how the IT4IT[tm] Reference Architecture for IT management creates demonstrated business benefits – in many ways, across many types of organizations.

Since its delivery in 2015 by The Open Group, IT4IT has focused on defining, sourcing, consuming, and managing services across the IT function’s value stream to its stakeholders. Among its earliest and most ardent users are IT vendors, startups, and global professional services providers.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy.

To learn more about how this variety of highly efficient businesses and their IT organizations make the most of IT4IT – often as a complimentary mix of frameworks and methodologies -- we are now joined by our panel:

• Lars Rossen, Fellow at Micro Focus, in Copenhagen;
• Mark Bodman, Senior Product Manager at ServiceNow, in Austin;
• John Esler, Client Principal at Hewlett Packard Enterprise (HPE) Pointnext, in Denver;
• Rob Akershoek, IT Architect at Fruition Partners, a DXC Technology Company, in Amsterdam;
• Varun Vijaykumar, Associate General Manager and ITSM Architect at HCL Technologies, in Raleigh-Durham, and
• Jerrod Bennett, CEO and Co-Founder at Dreamtsoft, in San Diego.

The panel discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions. Here are some excerpts:

Gardner: Big trends are buffeting business in 2019. Companies of all kinds need to attain digital transformation faster, make their businesses more intelligent and responsive to their markets, and improve end user experiences. So, software development, applications lifecycles, and optimizing how IT departments operate are more important than ever. And they need to operate as a coordinated team, not in silos.

Lars, why is the IT4IT standard so powerful given these requirements that most businesses face? 
 

Rossen

Rossen: There are a number of reasons, but the starting point is the fact that it’s truly end-to-end. IT4IT starts from the planning stage -- how to convert your strategy into actionable projects that are being measured in the right manner -- all the way to development, delivery of the service, how to consume it, and at the end of the day, to run it.

There are many other frameworks. They are often very process-oriented, or capability-oriented. But IT4IT gives you a framework that underpins it all. Every IT organization needs to have such a framework in place and be rationalized and well-integrated. And IT4IT can deliver that.

Gardner: And IT4IT is designed to help IT organizations elevate themselves in terms of the impact they have on the overall business.

Mark, when you encounter someone who says IT4IT, “What is that?” What’s your elevator pitch, how do you describe it so that a lay audience can understand it?

Bodman

Bodman: I pitch it as a framework for managing IT and leave it at that. I might also say it’s an operating model because that’s something a chief information officer (CIO) or a business person might know.

If it’s an individual contributor in one of the value streams, I say it’s a broader framework than what you are doing. For example, if they are a DevOps guy, or a maybe a Scaled Agile Framework (SAFe) guy, or even a test engineer, I explain that it’s a more comprehensive framework. It goes back to the nature of IT4IT being a hub of many different frameworks -- and all designed as one architecture.

Gardner: Is there an analog to other business, or even cultural, occurrences that IT4IT is to an enterprise?

Rossen: The analogy I have is that you go to The Lord of the Rings, and IT4IT is the “one ring to rule them all.” It actually combines everything you need.

Gardner: Why do companies need this now? What are the problems they’re facing that requires one framework to rule them all?

Everyone, everything on the same page

Esler

Esler: A lot of our clients have implemented a lot of different kinds of software -- automation software, orchestration software, and portals. They are sharing more information, more data. But they haven’t changed their operating model.

Using IT4IT is a good way to see where your gaps are, what you are doing well, what you are not doing not so well, and how to improve on that. It gives you a really good foundation on knowing the business of IT.

Bennett: We are hearing in the field is that IT departments are generally drowning at this point. You have a myriad of factors, some of which are their fault and some of which aren’t. The compliance world is getting nightmare-strict. The privacy laws that are coming in are straining what are already resource-constrained organizations. At the same time, budgets are being cut.

The other side of it is the users are demanding more from IT, as a strategic element as opposed to simply a support organization. As a result, they are drowning on a daily basis. Their operating model is -- they are still running on wooden wheels. They have not changed any of their foundational elements.

If your family has a spending problem, you don’t stop spending, you go on a budget. You put in an Excel spreadsheet, get all the data into one place, pull it together, and you figure out what’s going on. Then you can execute change. That’s what we do from an IT perspective. It’s simply getting everything in the same place, on the same page, and talking the same language. Then we can start executing change to survive.

Peruse a Full Library of
IT4IT Reference Architecture
Publications

Gardner: Because IT in the past could operate in silos, there would be specialization. Now we need a team-sport approach. Mark, how does IT4IT help that?

Bodman: An analogy is the medical profession. You have specialists, and you have generalist doctors. You go to the generalist when you don’t really know where the problem is. Then you go to a specialist with a very specific skill-set and the tools to go deep. IT4IT has aimed at that generalist layer, then with pointers to the specialists.

Gardner: IT4IT has been available since October 2015, which is a few years in the market. We are now seeing different types of adoption patterns—from small- to medium-size businesses (SMBs) and up to enterprises. What are some “rubber meets the road” points, where the value is compelling and understood, that then drive this deeper into the organization?

Where do you see IT4IT as an accelerant to larger business-level improvements?

Success via stability

Vijaykumar

Vijaykumar: When we look at the industry in general there are a lot of disruptive innovations, such as cloud computing taking hold. You have other trends like big data, too. These are driving a paradigm shift in the way IT is perceived. So, IT is not only a supporting function to the business anymore -- it’s a business enabler and a competitive driver.

Now you need stability from IT, and IT needs to function with the same level of rigor as a bank or manufacturer. If you look at those businesses, they have reference architectures that span several decades. That stability was missing in IT, and that is where IT4IT fills a gap -- we have come up with a reference architecture.

What does that mean? When you implement new tooling solutions or you come up with new enterprise applications, you don’t need to rip apart and replace everything. You could still use the same underlying architecture. You retain most of the things -- even when you advance to a different solution. That is where a lot of value gets created.

Esler: One thing you have to remember, too, is that this is not just about new stuff. It’s not just about artificial intelligence (AI), Internet of Things (IoT), big data, and all of that kind of stuff -- the new, shiny stuff. There is still a lot of old stuff out there that has to be managed in the same way. You have to have a framework like IT4IT that allows you to have a hybrid environment to manage it all.

Gardner: The framework to rule all frameworks.

Rossen: That also goes back to the concept of multi-modal IT. Some people say, “Okay, I have new tools for the new way of doing stuff, and I keep my old tools for the old stuff.”

But, in the real world, these things need to work together. The services depend on each other. If you have a new smart banking application, and you still have a COBOL mainframe application that it needs to communicate with, if you don’t have a single way of managing these two worlds you cannot keep up with the necessary speed, stability, and security.

Gardner: One of the things that impresses me about IT4IT is that any kind of organization can find value and use it from the get-go. As a start-up, an SMB, Jerrod, where you are seeing the value that IT4IT brings?

Solutions for any size business

Bennett

Bennett: SMBs have less pain, but proportionally it’s the same, exact problem. Larger enterprises have enormous pain, the midsize guys have medium pain, but it’s the same mess.

But the SMBs have an opportunity to get a lot more value because they can implement a lot more of this a lot faster. They can even rip up the foundation and start over, a greenfield approach. Most large organizations simply do not have that capability.

The same kind of change – like in big data, how much data is going to be created in the next five years versus the last five years? That’s universal, everyone is dealing with these problems.

Gardner: At the other end of the scale, Mark, big multinational corporations with sprawling IT departments and thousands of developers -- they need to rationalize, they need to limit the number of tools, find a fit-for-purpose approach. How does IT4IT help them?

Bodman: It helps to understand which areas to rationalize first, that’s important because you are not going to do everything at once. You are going to focus on your biggest pain points.

The other element is the legacy element. You can’t change everything at once. There are going to be bigger rocks, and then smaller rocks. Then there are areas where you will see folks innovate, especially when it comes to the DevOps, new languages, and new platforms that you deploy new capabilities on.

What IT4IT allows is for you to increasingly interchange those parts. A big value proposition of IT4IT is standardizing those components and the interfaces. Afterward, you can change out one component without disrupting the entire value chain.

Gardner: Rob, complexity is inherent in IT. They have a lot on their plate. How does the IT4IT Reference Architecture help them manage complexity?

Reference architecture connects everything

Akershoek

Akershoek: You are right, there is growing complexity. We have more services to manage, more changes and releases, and more IT data. That’s why it’s essential in any sized IT organization to structure and standardize how you manage IT in a broader perspective. It’s like creating a bigger picture.

Most organizations have multiple teams working on different tools and components in a whole value chain. I may have specialized people for security, monitoring, the service desk, development, for risk and compliance, and for portfolio management. They tend to optimize their own silo with their own practices. That’s what IT4IT can help you with -- creating a bigger picture. Everything should be connected.

Esler: I have used IT4IT to help get rid of those very same kinds of silos. I did it via a workshop format. I took the reference architecture from IT4IT and I got a certain number of people -- and I was very specific about the people I wanted -- in the room. In doing this kind of thing, you have to have the right people in the room.

We had people for service management, security, infrastructure, and networking -- just a whole broad range across IT. We placed them around the table, and I took them through the IT4IT Reference Architecture. As I described each of the words, which meant function, they began to talk among themselves, to say, “Yes, I had a piece of that. I had this piece of this other thing. You have a piece of that, and this piece of this.”

It started them thinking about the larger functions, that there are groups performing not just the individual pieces, like service management or infrastructure.

Peruse a Full Library of
IT4IT Reference Architecture
Publications

Gardner: IT4IT then is not muscling out other aspects of IT, such as Information Technology Infrastructure Library (ITIL), The Open Group Architecture Framework (TOGAF), and SAFe. Is there a harmonizing opportunity here? How does IT4IT fit into a larger context among these other powerful tools, approaches, and methodologies?

Rossen: That’s an excellent question, especially given that a lot of people into SAFe might say they don’t need IT4IT, that SAFe is solving their whole problem. But once you get to discuss it, you see that SAFe doesn’t give you any recommendation about how tools need to be connected to create the automated pipeline that SAFe relies on. So IT4IT actually compliments SAFe very well. And that’s the same story again and again with the other ones.

The IT4IT framework can help bring those two things – ITIL and SAFe -- together without changing the IT organizations using them. ITIL can still be relevant for the helpdesk, et cetera, and SAFe can still function -- and they can collaborate better.

Gardner: Varun, another important aspect to maturity and capability for IT organizations is to become more DevOps-oriented. How does DevOps benefit from IT4IT? What’s the relationship?

Go with the data flow

Vijaykumar: When we talk about DevOps, typically organizations focus on the entire service design lifecycle and how it moves into transition. But the relationship sometimes gets lost between how a service gets conceptualized to how it is translated into a design. We need to use IT4IT to establish traceability, to make sure that all the artifacts and all the information basically flows through the pipeline and across the IT value chain.

The way we position the IT4IT framework to organizations and customers is very important. A lot of times people ask me, “Is this going to replace ITIL?” Or, “How is it different from DevOps?”

The simplest way to answer those questions is to tell them that this is not something that provides a narrative guidance. It’s not a process framework, but rather an information framework. We are essentially prescribing the way data needs to flow across the entire IT value chain, and how information needs to get exchanged.

It defines how those integrations are established. And that is vital to having an effective DevOps framework because you are essentially relying on traceability to ensure that people receive the right information to accept services, and then support those services once they are designed.

Gardner: Let’s think about successful adoption, of where IT4IT is compelling to the overall business. Jerrod, among your customers where does IT4IT help them?

Holistic strategy benefits business

Bennett: I will give an example. I hate the word, but “synergy” is all over this. Breaking down silos and having all this stuff in one place -- or at least in one process, one information framework -- helps the larger processes get better.

The classic example is Agile development. Development runs in a silo, they sit in a black box generally, in another building somewhere. Their entire methodology of getting more efficient is simply to work faster.

So, they implement sprints, or Agile, or scrum, or you name it. And what you recognize is they didn’t have a resource problem, they had a throughput problem. The throughput problem can be slightly solved using some of these methodologies, by squeezing a little bit more out of their glides.

Credit: The Open Group

But what you find, really, is they are developing the wrong thing. They don’t have a strategic element to their businesses. They simply develop whatever the heck they decide is important. Only now they develop it really efficiently. But the output on the other side is still not very beneficial to the business.

If you input a little bit of strategy in front of that and get the business to decide what it is that they want you to develop – then all of a sudden your throughput goes through the roof. And that’s because you have broken down barriers and brought together the [major business elements], and it didn’t take a lot. A little bit of demand management with an approval process can make development 50 percent more efficient -- if you can simply get them working on what’s important.

It’s not enough to continue to stab at these small problems while no one has yet said, “Okay, timeout. There is a lot more to this information that we need.” You can take inspiration from the manufacturing crisis in the 1980s. Making an automobile engine conveyor line faster isn’t going to help if you are building the wrong engines or you can’t get the parts in. You have to view it holistically. Once you view it holistically, you can go back and make the assembly lines work faster. Do that and sky is the limit.

Gardner: SoIT4IT helps foster “simultaneous IT operations,” a nice and modern follow-on to simultaneous engineering innovations of the past.

Mark, you use IT4IT internally at ServiceNow. How does IT4IT help ServiceNow be a better IT services company?

IT to create and consume products

Bodman: A lot of the activities at ServiceNow are for creating the IT Service Management (ITSM) products that we sell on the market, but we also consume them. As a product manager, a lot of my job is interfacing with other product managers, dealing with integration points, and having data discussions.

As we make the product better, we automatically make our IT organization better because we are consuming it. Our customer is our IT shop, and we deploy our products to manage our products. It’s a very nice, natural, and recursive relationship. As the company gets better at product management, we can get more products out there. And that’s the goal for many IT shops. You are not creating IT for IT’s sake, you are creating IT to provide products to your customers.

Gardner: Rob, at Fruition Partners, a DXE company, you have many clients that use IT4IT. Do you have a use case that demonstrates how powerful it can be?

Akershoek: Yes, I have a good example of an insurance organization where they have been forced to reduce significantly the cost to develop and maintain IT services.

Initially, they said, “Oh, we are going to automate and monitor DevOps.” When I showed them IT4IT they said, “Well, we are already doing that.” And I said, “Why don’t you have the results yet? And they said, “Well, we are working on it, come back in three months.”

IT4IT saved time and created transparency. With that outcome they realized, "Oh, we would have never been able to achieve that if had continued the way we did it in the past."

But after that period of time, they still were not succeeding with speed. We said, “Use IT4IT, take it to specific application teams, and then move to cloud, in this case, Azure Cloud. Show that you can do it end-to-end from strategy into an operation, end-to-end in three months’ time and demonstrate that it works.”

And that’s what has been done, it saved time and created transparency. With that outcome they realized, “Oh, we would have never been able to achieve that if we had continued the way we did it in the past.”

Gardner: John, at HPE Pointnext, you are involved with digital transformation, the highest order of strategic endeavors and among the most important for companies nowadays. When you are trying to transform an organization – to become more digital, data-driven, intelligent, and responsive -- how does IT4IT help?

Esler: When companies do big, strategic things to try and become a digital enterprise, they implement a lot of tools to help. That includes automation and orchestration tools to make things go faster and get more services out.

But they forget about the operating model underneath it all and they don’t see the value. A big drug company I worked with was expecting a 30 percent cost reduction after implementing such tools, and they didn’t get it. And they were scratching their heads, asking, “Why?”

We went in and used IT4IT as a foundation to help them understand where they needed change. In addition to using some tools that HPE has, that helped them to understand -- across different domains, depending on the level of service they want to provide to their customers -- what they needed to change. They were able to learn what that kind of organization looks like when it’s all said and done.

Gardner: Lars, Micro Focus has 4,000 to 5,000 developers and needs to put software out in a timely fashion. How has IT4IT helped you internally to become a better development organization?

Streamlining increases productivity

Rossen: We used what is by now a standard technique in IT4IT, to do rationalization. Over a year, we managed to convert it all into a single tool chain that 80 percent of the developers are on.

With that we are now much more agile in delivering products to market. We can do much more sharing. So instead of taking a year, we can do the same easily every three months. But we also have hot fixes and a change focus. We probably have 20 releases a day. And on top of that, we can do a lot more sharing on components. We can align much more to a common strategy around how all our products are being developed and delivered to our customers. It’s been a massive change.

Gardner: Before we close out, I’d like to think about the future. We have established that IT4IT has backward compatibility, that if you are a legacy-oriented IT department, the reference architecture for IT management can be very powerful for alignment to newer services development and use.

But there are so many new things coming on, such as AIOps, AI, machine learning (ML), and data-driven and analytics-driven business applications. We are also finding increased hybrid cloud and multi-cloud complexity across deployment models. And better managing total costs to best operate across such a hybrid IT environment is also very important.

So, let’s take a pause and say, “Okay, how does IT4IT operate as a powerful influence two to three years from now?” Is IT4IT something that provides future-proofing benefits?

The future belongs to IT4IT

Bennett: Nothing is future-proof, but I would argue that we really needed IT4IT 20 years ago -- and we didn’t have it. And we are now in a pretty big mess.

There is nothing magical here. It’s been well thought-out and well-written, but there is nothing new in there. IT4IT is how it ought to have been for a while and it took a group of people to get together and sit down and architect it out, end-to-end.

Theoretically it could have been done in the 1980s and it would still be relevant because they were doing the same thing. There isn’t anything new in IT, there are lots of new-fangled toys. But that’s all just minutia. The foundation hasn’t changed. I would argue that in 2040 IT4IT will still be relevant.

Peruse a Full Library of
IT4IT Reference Architecture
Publications

Gardner: Varun, do you feel that organizations that adopt IT4IT are in a better position to grow, adapt, and implement newer technologies and approaches?

Vijaykumar: Yes, definitely, because IT4IT – although it caters to the traditional IT operating models -- also introduces a lot of new concepts that were not in existence earlier. You should look at some of the concepts like service brokering, catalog aggregation, and bringing in the role of a service integrator. All of these are things that may have been in existence, but there was no real structure around them.

IT4IT provides a consolidated framework for us to embrace all of these capabilities and to drive improvements in the industry. Coupled with advances in computing -- where everything gets delivered on the fly – and where end users and consumers expect a lot more out of IT, I think IT4IT helps in that direction as well.

Gardner: Lars, looking to the future, how do you think IT4IT will be appreciated by a highly data-driven organization?

Rossen: Well, IT4IT was a data architecture to begin with. So, in that sense it was the first time that IT itself got a data architecture that was generic. Hopefully that gives it a long future.

I also like to think about it as being like roads we are building. We now have the roads to do whatever we want. Eventually you stop caring about it, it’s just there. I hope that 20 years from now nobody will be discussing this, they will just be doing it.

The data model advantage

Gardner: Another important aspect to running a well-greased IT organization -- despite the complexity and growing responsibility -- is to be better organized and to better understand yourself. That means having better data models about IT. Do you think that IT4IT-oriented shops have an advantage when it comes to better data models about IT?

Bodman: Yes, absolutely. One of the things we just produced within the [IT4IT reference architecture data model] is a reporting capability for key performance indicators (KPI) guidance. We are now able to show what kinds of KPIs you can get from the data model -- and be very prescriptive about it.

In the past there had been different camps and different ways of measuring and doing things. Of course, it’s hard to benchmark yourself comprehensively that way, so it’s really important to have consistency there in a way that allows you to really improve.

In the past there had been different camps and different ways of measuring and doing things. It's hard to benchmark yourself that way. It's really important to have consistency in a way that allows you to really improve.

The second part -- and this is something new in IT4IT that is fundamental -- is the value stream has a “request to fulfill (R2F)” capability. It’s now possible to have a top-line, self-service way to engage with IT in a way that’s in a catalog and that is easy to consume and focused on a specific experience. That’s an element that has been missing. It may have been out there in pockets, but now it’s baked in. It’s just fabric, taught in schools, and you just basically implement it.

Rossen: The new R2F capability allows an IT organization to transform, from being a cost center that does what people ask, to becoming a service provider and eventually a service broker, which is where you really want to be.

Esler: I started in this industry in the mainframe days. The concept of shared services was prevalent, so time-sharing, right? It’s the same thing. It hasn’t really changed. It’s evolved and going through different changes, but the advent of the PC in the 1980s didn’t change the model that much.

Now with hyperconvergence, it’s moving back to that mainframe-like thing where you define a machine by software. You can define a data center by software.

Peruse a Full Library of
IT4IT Reference Architecture
Publications

Gardner: For those listening and reading and who are intrigued by IT4IT and would like to learn more, where can they go and find out more about where the rubber meets the IT road?

Akershoek: The best way is going to The Open Group website. There’s a lot of information on the reference architecture itself, case studies, and video materials.

How to get started is typically you can do that very small. Look at the materials, try to understand how you currently operate your IT organization, and plot it to the reference architecture.

That provides an immediate sense of what you may be missing, are duplicating areas, or have too much going on without governance. You can begin to create a picture of your IT organization. That’s the first step to try to create or co-create with your own organization a bigger picture and decide where you want to go next.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: The Open Group.

You may also be interested in:

• How the data science profession is growing in value and impact across the business world
• The Open Group panel explores ways to help smart cities initiatives overcome public sector obstacles
• The Open Group digital practitioner effort eases the people path to digital business transformation
• How The Open Group Healthcare Forum and Health Enterprise Reference Architecture cures process and IT ills
• Why government agencies could lead the way in demanding inter-public cloud interoperability and standardization
• Panel explores how the IT4IT Reference Architecture acts as a digital business enabler
• The UNIX evolution: A history of innovation reaches an unprecedented 20-year milestone
• The Open Group president, Steve Nunn, on the inaugural TOGAF User Group and new role of EA in business transformation
• A Tale of Two IT Departments, or How Cloud Governance is Essential in the Bimodal IT Era

IT kit sustainability: A business advantage and balm for the planet

The next BriefingsDirect sustainable resources improvement interview examines how more companies are plunging into the circular economy to make the most of their existing IT and business assets.

We’ll now hear how more enterprises are optimizing their IT kit and finding innovative means to reduce waste -- as well as reduce energy consumption and therefore their carbon footprint. Stay with us as we learn how a circular economy mindset both improves sustainability as a benefit to individual companies as well as the overall environment.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy.

Here to help us explore the latest approaches to sustainable IT is William McDonough, Chief Executive of McDonough Innovation and Founder of William McDonough and Partners, and Gabrielle Ginér, Head of Environmental Sustainability for BT Group, based in London. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: William, what are the top trends driving the need for reducing waste, redundancy, and inefficiency in the IT department and data center?

McDonough: Materials and energy are both fundamental, and I think people who work in IT systems that are often optimized have difficulty with the concept of waste. What this is about is eliminating the entire concept of waste. So, one thing’s waste is another thing’s food -- and so when we don’t waste time, we have food for thought.

McDonough

A lot of people realize that it's great to do the right thing, and that would be to not destroy the planet in the process of what you do every day. But it's also great to do it the right way. When we see the idea of redesigning things to be safe and healthy, and then we find ways to circulate them ad infinitum, we are designing for next use -- instead of end of life. So it's an exciting thing.

Gardner: If my example as an individual is any indication, I have this closet full of stuff that’s been building up for probably 15 years. I have phones and PCs and cables and modems in there that are outdated but that I just haven’t gotten around to dealing with. If that’s the indication on an individual home level, I can hardly imagine the scale of this at the enterprise and business level globally. How big is it?

Devices designed for reuse

McDonough: It’s as big as you think it is, everywhere. What we are looking at is design is the first signal of human intention. If we design these things to be disassembled and reusable, we therefore design for next use. That’s the fundamental shift, that we are now designing differently. We don’t say we design for one-time use: Take, make, waste. We instead design it for what's next.

And it's really important, especially in IT, because these things, in a certain way, they are ephemeral. We call them durables, but they are actually only meant to last a certain amount of time before we move onto the next big thing.

Learn How to Begin
Your IT Circular Economy Journey

If we design your phone in the last 25 years, the odds of you using the same phone for 25 years are pretty low. The notion that we can design these things to become useful again quickly is really part of the new system. We now see the recycling of phone boards that actually go all the way back to base materials in very cost-effective ways. You can mine gold at $210 a ton out there, or you can mine phone boards at about $27,000 a ton. So that’s pretty exciting.

Gardner: There are clearly economic rationales for doing the right thing. Gabrielle, tell us why this is important to BT as a telecommunications leader.

Ginér: We have seen change in how we deal with and talk to consumers about this. We actually encourage them now to return their phones. We are paying for them. Customers can just walk into a store and get money back. That’s a really powerful incentive for people to return their phones.

Gardner: This concept of design for reuse and recovery is part of the cradle-to-cradle design concept that you have helped establish, William. Tell us why your book, Cradle to Cradle, leads to the idea of a circular economy?

Reuse renews the planet

McDonough: When we first posited Cradle to Cradle, we said you can look at the Earth and realize there are two fundamental systems at play. One is the biological system of which we are a part, the natural systems. And in those systems waste equals food. It wants to be safe and healthy, including the things you wear, the water, the food, all those things, those are biological nutrients.

Then we have technology. Once we started banging on rocks and making metals and plastics and things like that, that’s really technical nutrition. It’s another metabolism. So we don't want to get the two confused.

When we talk about lifecycle, we like to refer it to living things have a lifecycle. But your telephone is not a living thing -- and we talk about it having a lifecycle, and then an end of life. Well, wait a minute, it's not alive. It talks to you, but it's not alive. So really it's a product or service.

In Cradle to Cradle we say there are things that our biology needs to be safe, healthy, and to go back to the soil safely. And then there is technology. Technology needs to come back into technology and to be used over and over again. It's for our use.

And so, this brings up the concept we introduced, which is product-as-a-service. What you actually want from the phone is not 4,600 different kinds of chemicals. You want a telephone you can talk into for a certain period of time. And it's a service you want, really. And we see this being products-as-services, and that becomes the circular economy.

Once you see that, you design it for that use. Instead of saying, “Design for end-of-life. I am going to throw it in a landfill,” or something, you say, “I design it for next use. That means it’s designed for disassembly. We know we are going to use it again. It becomes part of a circular economy, which will grow the economy because we are doing it again and again.

Gardner: This approach seems to be win-win-win. There are lots of incentives, lots of rationales for not only doing well, but for doing good as companies. For example, Hewlett Packard Enterprise (HPE) recently announced a big initiative about this.

Another part of this in the IT field that people don't appreciate is the amount of energy that goes into massive data centers. The hyperscale cloud companies are investing billions of dollars each a year in these new data centers. It financially behooves them to consume less energy, but the amount of energy that data centers need is growing at a fantastic rate, and it’s therefore a larger percentage of the overall carbon footprint.

William, do carbon and energy also need to be considered in this whole circular economy equation?

Intelligent energy management

McDonough: Clearly with the issues concerning climate and energy management, yes. If our energy is coming from fossil fuels, we have fugitive carbon in the atmosphere. That's something that's now toxic. We know that. A toxin is material in the wrong place, wrong dose, wrong duration, so this has to be dealt with.

Some major IT companies are leading in this, including Apple, Google, Facebook, and BT. This is quite phenomenal, really. They are reducing their energy consumption by being efficient. They are also adding renewables to their mix, to the point that they are going to be a major part of the power use -- but it's renewably sourced and carbon-free. That’s really interesting.

Learn How to Begin
Your IT Circular Economy Journey

When we realize the dynamic of the energy required to move data -- and that the people who do this have the possibility of doing it with renewably powered means – this is a harbinger for something really critical. We can do this with renewable energy while still using electricity. It's not like asking some heating plant to shift gears quickly or some transportation system to change its power systems; those things are good too, but this industry is based on being intelligent and understanding the statistical significance of what you do.

Gardner: Gabrielle, how is BT looking at the carbon and energy equation and helping to be more sustainable, not only in its own operations, but across your supply chain, all the companies that you work with as partners and vendors?

Ginér: Back to William's point, two things stand out. One, we are focused on being more energy efficient. Even though we are seeing data traffic grow by around 40 percent per year, we now have nine consecutive years of reducing energy consumption in our networks.

Ginér

To the second point around renewable energy, we have an ambition to be using 100 percent renewable electricity by 2020. Last year we were at 81 percent, and I am pleased to say that we did a couple of new deals recently, and we are now up at 96 percent. So, we are getting there in terms of the renewables.

What's been remarkable is how we have seen companies come together in coalitions that have really driven the demand and supply of renewable energy, which has been absolutely fantastic.

As for how we work with our suppliers like HPE, for example, as a customer we have a really important role to play in sending demand signals to our suppliers of what we are looking for. And obviously we are looking for our suppliers to be more sustainable. The initiatives that HPE announced recently in Madrid are absolutely fantastic and are what we are looking for.

Gardner: It’s great to hear about companies like BT that are taking a bellwether approach to this leadership position. HPE is being aggressive in terms of how it encourages companies to recycle and use more data center kit that’s been reconditioned so that you get more and more life out of the same resources.

But if you are not aggressive, if you are not on the leadership trajectory in terms of sustainability, what’s the likely outcome in a few years?

Smart, sustainable IT

McDonough: This is a key question. When a supplier company like HPE says, “We are going to care about this,” what I like about that is it’s a signal that they are providing services. A lot of the companies -- when they are trying to survive in business or trying to move through different agendas to manage modern commerce -- they may not have time to figure out how to get renewably powered.

But the ones that do know how to manage those things, it becomes just part of a service. That’s a really elegant thing. So, if a company like HPE says, “Okay, how many problems of yours can we solve? Oh, we will solve that one for you, too. Here, you do what you do, we will all do what we do -- and we will all do this together.” So, I think the notion that it becomes part of the service is a very elegant thing.

As we see AI coming in, we have to remember there is this thing called human intelligence that goes with it, and there is natural intelligence that goes with being in the world.

Gardner: A lot of companies have sustainability organizations, like BT. But how closely are they aligned with the IT organization? Do IT organizations need to create their own sustainability leaders? How should companies drive a more of the point of the arrow in IT department direction?

McDonough: IT is really critical now because it’s at the core of operations. It touches all the information that’s moving through the system. That's the place where we can inform the activities and our intentions. But the point today is that humans, as we see artificial intelligence (AI) coming in, we have to remember there is this thing called human intelligence that goes with it, and there is a natural intelligence that goes with being in the world.

We should begin with our values of what is the right thing to do. We talked about what's right and wrong, or what’s good and bad. Aristotle talked about what is less and more; truth in number. So, when we combine these two, you really have to begin with your values first. Do the right thing, and then go to the value, and do it all the right way.

And that means, let’s not get confused. Because if you are being less bad and you think it's good, you have to stop and think because you are being bad by definition, just less so. So, we get confused.

Circular Economy Report
Guides Users to 
Increased Sustainability

What we really want to be is more good. Let’s do less bad for sure, but let’s also go out and do more good. And the statistical reference points for data are going to come through the IT to help us determine that. So, the IT department is actually the traffic control for good corporate behavior.

Gardner: Gabrielle, some thoughts about why sustainability is an important driver for BT in general, and maybe some insights into how the IT function in particular can benefit?

Ginér: I don't think we need a separate sustainability function for IT. It comes back to what William mentioned about values. For BT, sustainability is part of the company’s ethos. We want to see that throughout our organization. I sit in a central team, but we work closely with IT. It’s part of sharing a common vision and a common goal.

Positive actions, profitable results

Gardner: For those organizations planning on a hybrid IT future, where they are making decisions about how much public cloud, private cloud, and traditional IT -- perhaps they should be factoring more about sustainability in terms of a lifecycle of products and the all-important carbon and energy equation.

How do we put numbers on this in ways that IT people can then justify on that all-important total cost of ownership and return on investment types of factoring across hybrid IT choices?

McDonough: Since the only constant in modern business life is high-speed change, you have to have change built into your day-to-day operations. And so, what is the change? The change will have an impact. The question is will it have a positive impact or a negative impact? If we look at the business, we want a positive impact economically; for the environment, we would like to have a positive impact there, too.

Since the only constant in modern business life is high-speed change ... for the environment we would like to have a positive impact there, too.

When you look at all of that together as one top-line behavior, you realize it’s about revenue generation, not just about profit derivation. So, you are not just trying to squeeze out every penny to get profit, which is what's leftover. That’s the manager’s job; you are trying to figure out what’s the right thing to do and bring in the revenue, that’s the executive’s job.

The executives see this and realize it’s about revenue generation actually. And so, we can balance our CAPEX and our OPEX and we can do optimization across it. That means a lot of equipment that’s sitting out there that might be suboptimal is still serviceable. It's a valuable asset. Let it run but be ready to refurbish it when the time comes. In the meantime, you are going to shift to the faster, better systems that are optimized across the entire platform. Because then you start saving energy, you start saving money, and that’s all there is to it.

Circular Economy Report
Guides Users to 
Increased Sustainability

Gardner: It seems like we are at the right time in the economy, and in the evolution of IT, for the economics to be working in favor of sustainability initiatives. It’s no coincidence that we are seeing at HPE that they are talking more about the economics of IT as well as sustainability issues. They are very closely linked.

Do you have studies at BT that help you make the economic case for sustainability, and not just that it's the good or proper thing to do?

Ginér: Oh yes, most definitely. Just last year through our Energy Efficiency Program, we saved 29 million pounds, and since we began looking at this in 2009-2010, we have saved more than 250 million pounds. So, there is definitely an economic case for being energy efficient.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: Hewlett Packard Enterprise.

You may also be interested in:

• Industrial-strength wearables combine with collaboration cloud to bring anywhere expertise to intelligent-edge work
• How the data science profession is growing in value and impact across the business world
• Why enterprises should approach procurement of hybrid IT in entirely new ways
• Manufacturer gains advantage by expanding IoT footprint from many machines to many insights
• Why enterprises struggle with adopting public cloud as a culture
• Who, if anyone, is in charge of multi-cloud business optimization?
• A discussion with IT analyst Martin Hingley on the culmination of 30 years of IT management maturity
• How global HCM provider ADP mines an ocean of employee data for improved talent management
• Inside story: How HP Inc. moved from a rigid legacy to data center transformation