Chief technology officer at Unit4, overseeing the development of intelligent software for service organizations.
Cloud computing can offer businesses fast deployment, scalability and reduced costs, but it can also be a surprising tool for reducing your carbon footprint. Today’s customers, stakeholders and employees are ecologically aware, making sustainability a top priority for keeping up in a rapidly changing world.
Nearly 90% of Gen-X consumers say they’re willing to spend more on sustainable products, compared to just 34% who felt that way in 2020. Meanwhile, 51% of MBA students in the U.S. say they’d take a lower salary to work for an environmentally responsible company. And although the pandemic halted the progress of many environmental regulations, the pace is set to pick up in 2023.
Organizations that fail to be sustainable risk losing stakeholder support, sales and staff, all of which have a punishing impact on profit margins. With that in mind, here are five factors to consider when moving ERP software to the cloud in order to reduce your environmental impact.
1. Minimize your infrastructure.
All too often, your on-premise hardware sits in your back office, humming away and consuming an unknown amount of power. When you move to the cloud, you outsource your compute and storage, meaning you don’t need all that equipment or the hefty energy bill that comes with it.
Ask potential cloud vendors if they invest in the latest technologies due to their need for a fast upgrade cycle. This would mean that they run the most energy-efficient equipment, which would be prohibitively expensive for your business to purchase and replace regularly.
Moving to the cloud provides a valuable opportunity to reconsider your IT infrastructure, so work with your IT team to see whether it’s possible to reduce your equipment or upgrade to newer, less energy-hungry models.
2. Use only what you need.
No more computers left idling for days in case you need them: You can expand or reduce your compute and storage depending on your requirements. This means you pay only for what you use and don’t waste energy or money on on-site computing power that’s often surplus to your requirements.
Cloud vendors can automatically turn off your system when you’re not using it, then boot it up again when needed—making it more energy- and cost-effective. Creating those capabilities in your own server room would require investing in more expensive hardware and tooling. In the cloud, it comes as part of the offering, so take advantage.
3. Move to microservices.
Think of your ERP system like a house. Different types of homes have different energy ratings, and the architecture of ERP systems also vary in energy efficiency. A large monolithic application consumes more resources as all capabilities are concentrated in one single entity: It’s as if the lights are always on. With individual services, the lights are only on when you’re in the room. The smaller the room (if you run microservices or nanoservices), the less light you’ll need, and the less you’ll need to pay for power.
Smaller, granular units are stateless; they can run independently and consume less energy, providing better cost efficiency. Although cloud-hosted microservices or nanoservices may not offer the fast response times needed for parts of the application that require user interaction, they are effective for back-office processing.
A shift toward a more granular service architecture can also benefit your business’s resilience, flexibility and customer experience. Ask potential vendors whether they can add a new microservice when you need it in order to adapt to changing market demands or business requirements. Plus, spreading your ERP across multiple services removes the risk of a single point of failure that could shut down the whole system, causing downtime that jeopardizes your service level agreements.
4. Prioritize green locations.
One advantage of a distributed architecture is that you can choose where it is located. Some elements of your ERP system will need to be close to your users to reduce latency, but small back-office processes that run at scheduled times can be relocated based on your sustainability goals.
Consider moving certain workloads to a country with a commitment to green energy, instead of remaining in one that still relies mostly on fossil fuels. For example, I live in Denmark, where 67% of our electricity comes from renewable sources, and the government has pledged to be climate neutral by 2050.
Research which locations have a progressive attitude to the environment, and ask potential vendors where your workloads would be hosted. This can help secure your business for the future, keeping you ahead of tightening industry sustainability regulations. This, in turn, can also reassure your investors and stakeholders, who appreciate the importance of sustainability for ensuring continued success.
5. Choose a climate-committed vendor.
Even though granular cloud-native applications may be less energy hungry, even a public cloud uses a large amount of energy. Ask cloud providers if they have made a commitment to using renewable energy, as many larger companies have heavily invested in this area.
Make sure the vendor you buy from can clearly demonstrate how their software supports sustainability. It’s also a good idea to check what they do with their waste: A high amount of electronic waste, or “e-waste,” ends up in landfills, where it can leak toxic substances which pose an environmental hazard.
Carrying out this type of due diligence will make you more attractive to customers, who now more than ever, are looking to do business with organizations committed to sustainability. This offers a twofold opportunity to increase sales by both strengthening your existing trading relationships and winning new business.
Sustainability is a hot topic now, and its importance will only grow in the future. Businesses that fall behind risk damaging their operational effectiveness, reputation and, ultimately, their value. Companies that think about their carbon footprint from the very beginning, and include it as a strategic necessity of IT, will have a competitive edge that doesn’t cost the earth.