Enabling a global manufacturing organization to understand the ‘True TCO’ of IT decisions
- Automotive & Industry
- IT Strategy & CTO Advisory
- Sustainability
Our client
As a Fortune 500 company operating in the aerospace manufacturing space, our client had made ESG (Environmental, social, and corporate governance) one of the top initiatives across the company. The Board were therefore keen to make and demonstrate progress towards goals to various stakeholders, including employees and financial investors.
The challenge
Since our client was in the early stages of its carbon emissions planning, they hadn’t yet devised a way for each business function – including the Technology function – to produce reporting that the ESG team could use.
Meanwhile, the IT department, having embarked on a multi-year simplification and cost reduction program, were aware that they were missing an opportunity to showcase IT’s contribution to company ESG targets.
The Director of IT Transformation Program Office, Tim Niewczyk, approached the Wavestone team, who were already working on the wider transformation program, to see if they could create a tool to help them understand the linkage between simplification, cost reduction and carbon reduction.
The tool was to be trialed on the initial part of the program – specifically, to calculate and report on cost and carbon reductions within the Data Center Consolidation Program.
Although the program had achieved technical success since its inception in 2021, the Director was aware that its positive impact on the company’s carbon footprint had not been measured. Indeed, when the program started, our client was struggling with the Total Cost of Ownership of Data Centers and apps – and being able to report on carbon reduction was near-impossible.
To add to the challenge, they had data centers in more than 20 geographies. This presented a major challenge when trying to gather data in a consistent format.
Solutions and approach
The Wavestone team proposed a pragmatic approach that minimized the amount of input required from the client team, knowing this was often a stumbling block with such initiatives. Critically, no new or complex data or dedicated hardware was required.
The data required was information that the Infrastructure Team already had to hand, such as around the types of servers, quantities, where they were located, ‘how’ they were located, and a few other datapoints.
The bespoke tool then modelled out and gave our client immediate access to different scenarios depending on the prioritization of Cost Savings over Carbon. Wavestone retrospectively calculated a net baseline position for C02 emissions for the data centres, comparing the current and proposed carbon consumption to establish the reduction of servers made possible by the consolidation work.
It also reviewed existing programme delivery to-date and prospective future works, mapping impact of all consolidation plans.
Lastly, the tool produced a bespoke calculator capable of accounting for the deliver to-date, usable by the client to track on-going programme performance vs. targets.
At the time, the Wavestone team noted that the same approach could be applied to any part of IT infrastructure.
The Results
The Director of IT Transformation Program Office, Tim Niewczyk reported: “Wavestone’s tool provides us with clear visibility of the ‘true’ Total Cost of Ownership, that is the carbon cost as well as financial cost, for any IT investment decisions going forward.”
Overall, we helped our client to deliver the following 4 key results.
When the IT function shared the carbon emission savings figures with the ESG lead, it amassed to a significant amount of carbon reduction – and finally IT could prove it had made a great contribution to the company’s carbon reduction goals. By the end of the Data Centre program (including apps), in 2 years, this will amount to 150 tonnes of C02 reduction.
The client has started seeing thousands of dollars in savings this year, is on target to save $1.5million next year and then by the end of the program, FY26/27, there will be approximately $8million in annual savings across applications, servers, equipment and data centers. The wider transformation programme, focusing on simplification and reduction, is still ongoing. Having started this approach with the Data Center piece, the client is now moving on to reducing the number of applications and the footprint.
The tool, initially developed for the Data Centre program, has now been handed over to the client so they can ‘steer’ workloads to their most carbon/cost efficient locations around the globe in future – without no need for input from Wavestone. Now that the methodology has been established and shared within the company, the client is already re-applying it back against other items that are underway in the wider program. For example, when they look at application decommissioning, they can identify the carbon savings as well as labour saving or contract savings.
The VP Director of Sustainability & ESG was extremely pleased that someone from ‘outside’ the ESG function was providing data that could use to demonstrate company progress towards ESG goals. Being able to clearly share reporting around the company’s carbon footprint reduction as well as the opportunities around cost saving, has been incredibly well-received, by the Board and financial investors alike.
The Director of Sustainability & ESG was astounded with everything the IT department have contributed towards the wider ESG effort.
