Green Information Technology and its Implication for Business Strategy in the Banking Sector in Zimbabwe 1

Green IT represents a set of initiatives developed to reduce the carbon footprint of corporate IT. Given the high cost structures exhibited by the financial services industry and high dependence on information communication technologies, implementing Green IT is regarded the best alternative for the industry. This study sought to determine the gap in the uptake of Green IT by the financial services industry in Zimbabwe through the use of a multiple case research design. The results of the study show that the financial services industry is still in the primitive stages of embracing Green IT initiatives with their quest being hampered by inadequate resources. The study concluded that banks that have not yet adopted Green IT are missing out on improving their operational efficiency in an environmentally friendly manner. Banks are recommended to adopt eco-efficient strategies making Green IT a strategic input.


INTRODUCTON AND BACKGROUND
define Green IT as a broad range of measures aimed at reducing the environmental impact of corporate IT (information technology) use.Green IT is a contemporary phenomenon developed to reduce carbon emissions through leveraging the IT function for competitive advantage.Green IT application in the developed nations is still limited, but where it has been successfully implemented, operational efficiency was improved (Info-Tech, 2010).It is claimed that Green IT has the capability of improving operational efficiency by over 20% (Spafford, 2009), thus eco-efficient strategies may be successfully implemented through embracing Green IT.
The environment is under threat from business activities undertaken in pursuance of economic growth.Ice lands are melting and may soon be history because of global warming (UNCED, 2009).The realization of the transboundary nature of externalities arising from human distortions of carbon dioxide levels has promulgated international solidarity in an attempt to reverse the trends.
Although the need to link environmental and developmental concerns can be traced backwards, the seriousness of the agenda took centre stage when The United Nations General Assembly passed resolution 44/228 on 22 December 1989.World leaders realized the need to balance between development and environmental protection.This culminated in the United Nations arranging the Rio de Janeiro Earth Summit in 1992 and the crafting of Agenda 21.Agenda 21 is a blueprint document which seeks to address contemporary environmental and developmental concerns and to prepare the world for anticipated future challenges.It reflects a global consensus and political commitment at the highest level on development and environmental cooperation.Its successful implementation should be the responsibility of the national governments through plans, policies, strategies and processes that harmonize development and environmental concerns.This would represent a huge financial obligation for successful implementation (UNCED, 1992).
Governments are supposed to come up with polices, plans, strategies and funding to ensure successful implementation of agreed courses of action on the environmental agenda.Most of the protocols and conventions since 1985 challenged industries to show commitment to investing in technologies that reduce the carbon footprint.They challenged the financiers to avail funding for environmental investments, national governments to craft enabling policies, and the IT industries to make green technology innovations and inventions (UNCED, 1992).
In this regard, considering environmental sustainability is rather imperative for modern business strategy.Business strategies that ignore the sustainability of the environment face challenges on implementation in the wake of growing environmental activism.It is foreseen that businesses that fail to conform may be forced to close through active consumerism.One way businesses can address the environmental agenda is adoption of Green IT.
The banking industry in Zimbabwe is made up of 25 operational institutions under the regulatory supervision of the Reserve Bank of Zimbabwe and Ministry of Finance as at 31 December 2010.Of these, 15 are commercial banks, 5 merchant banks, 4 are building societies and one savings bank.In addition to these 25, there are 16 Asset Management Companies and 116 Microfinance Institutions (RBZ, 2011, January).
The industry is still characterized by internal liquidity conditions which have hampered the operation of the inter-bank market.The inter-bank market remains inactive and the only dominating product traded is bankers' acceptances in the absence of Treasury Bills.The lender of last resort function which permits commercial banks to borrow from the Reserve Bank has not been operational, but resumed from 1 st February 2011.The resuscitation of the lender of last resort will entail longer tenor lending by the sector which is currently for period up to 12 months (RBZ, 2011).
The industry experienced a rise in financial intermediation as exemplified by the rise in bank deposits from $1.4 billion in January 2010 to $2.5billion by November 2010.The major sources of the deposits were the services industry contributing 27.5% and the households contributing 16.9 % (RBZ, 2011).
Research Problem: Financial institutions are the major users of information communication technology, which is claimed to be contributing 3% (Info-Tech, 2010) in global carbon emissions, thus it is important to evaluate how they are using noble developments in the information technology industry to formulate and adopt environmentally sustainable business strategies.This study therefore attempts to evaluate the adoption of Green IT strategies by the banking industry in Zimbabwe in view of improvement in operational efficiency coupled with the need to protect the environment through reduction in carbon emissions.

Research Objectives:
The study seeks to investigate the gap in Green IT adoption by the banking industry and to determine the challenges and opportunities likely to accompany the adoption of Green IT technologies.

Justification:
The link between environmental stewardship and developmental pursuits today faces very little skepticism if at all.To date, most studies that have been done attempt to show how environmentally friendly technologies result in sustainable manufacturing.Few studies, if at all, have attempted to look at how Green Design, in this context Green IT, can immensely contribute to the sustainability of the service industry and more particularly the banking industry.
This study attempts to measure the uptake or adoption of Green IT by the financial services industry in Zimbabwe as well as developing a framework for Green IT adoption within the industry.

Scope of Research:
The research is confined to the banking industry, though the concept of Green IT is applicable to a cross section of the whole economy.It covers the period 2006 to 2010.

THEORY AND EMPIRICAL LITERATURE
Global warming and climate change accompanied with limited availability and rising cost of energy has become a major concern for the global economy.Businesses of all sectors and sizes are coming under mounting pressure from green movements and regulators to reduce their environmental footprint (Molla, 2008).Every type of operation and every part of any organisation has come to depend on information technology and communication technologies, it is IT that holds the keys to achieving key business objectives in the new world order.Ideally, organisations are looking to their IT function to lead the way in developing innovative ways of doing business that are more efficient and cost effective.With the technologies available today, achieving more with less invariably equates to being more environmentally sustainable: using less energy, less paper and less travel, for example (Burnet, 2010).Green IT may be the answer to the achievement of these business objectives.: Edgell, Meister and Stamp (2008) define Green IT as a broad range of measures aimed at reducing the environmental impact of corporate IT use.Murugesan (2008) defines the field of green computing as the study and practice of design, manufacturing, using, and disposing of computers, server and associated subsystems such as monitors, printers, storage devices, and networking and communications systems -efficiently with minimal or no impact on the environment.Burnett (2010) contends that Green IT has three faces.The first face is that it focuses on computing itself -power consumed by processors and chipsets, monitors, fans, routers, switches, and the like.It also includes hardware manufacturing processes, commissioning, decommissioning, and disposal.The second face of Green IT is the opportunity to substitute low-carbon technologies for traditional, highcarbon functions.Molla (2008) views Green IT in four perspectives namely sourcing, operations, services and end of IT life management.The sourcing perspective emphasizes the need for environmentally preferable IT purchasing.This involves buying from environmentally certified suppliers who have a reputation for environmental friendliness, for example buying IT equipment with Energy Star label.This view brings the aspect of active consumerism in business, wherein a new set of environmental stakeholders have emerged.The operational perspectives emphasize energy efficiency, and minimization of carbon emissions in every facet of organisational processes including the data centres.The service perspective views the role of IT in supporting business' overall sustainability initiatives, such as providing an analytical tool for monitoring energy efficiency as well as monitoring carbon emissions from the business' operational processes.

Drivers for Green IT adoption:
Literature available cites several drivers of adopting Green IT/design.These drivers include regulation; cost considerations; organizational resources and opportunities and ethical considerations.Other drivers noted include constrained electricity generation and active consumerism.

Regulatory Considerations/Driver
According to DiMaggio and Powell (1983), regulatory driver refers to the pursuit of legitimacy within the wider social context.The need to meet certain regulatory demands (both mandatory and voluntary) induces some actions from the society.Kavanagh (2009) argues that environmental concerns are not the only thing pushing business toward greening their IT operations.Governments are implementing an increasing number of policies to promote and enforce sustainable IT.The European Union (EU) is already working to establish a code of conduct for data centres and the EPA in the US is considering similar measures.According to Vesilind et al ( 2006), these regulatory agencies are embracing the notion of pollution preventions pays (PPP) by also encouraging other businesses as proof that doing the right thing is actually beneficial to industries and humanity.

• Cost Considerations (Economic Driver)
The associated cost savings in adopting Green IT cannot be ignored.Increasing energy efficiency will reduce the energy bill.Kavanagh (2009) contends that businesses can reap savings on hardware and IT administration and management costs.Some compelling reasons to acquire and implement computer systems powered by hybrid energy systems include lower energy bills, being able to provide continuity of care in the face of major natural and man-made disasters, and being better able to operate in remote locations around the world where reliable electrical service is not available (Groen, 2009).Atlas and Florida (1997) argues that cost reduction is one reason facilities may adopt green design.The results of their study however reject the cost reduction perspective as the findings indicated that it is primarily the immediate costs of an organisation's considering green design, that are significantly related to its likelihood of adopting green design.Longer -run costs do not seem to help explain the use of green design.The use of green design is assumed to be influenced strongly by the desire to reduce manufacturing inputs and wastes, and thus costs.

Organisational Factors
The first two drivers outlined may be important in driving green design, but Atlas and Florida (1997) contend that green design is associated with organizational factors, particularly the resources and capabilities of facilities to engage in green design and the opportunities for them to do so.They argue that facilities that engage in regular or continuous evaluation or change of their products' design will have greater opportunities to engage in environmental considerations into their product design processes.

• Organisational Opportunities
Teece and Pisano (1994) argue for a theory of dynamic organizational capabilities.According to the theory, organizational factors are critical to the innovativeness and overall business performance of facilities.These factors include both organizational resources and assets, and organizational capabilities -the experiences, competencies, and capacities which condition how different organisations respond in various situations .This theory asserts that classical economics erroneously views organisations as "black boxes" that respond similarly to outside stimuli.Rather, organisations differ because they have different resource endowments, assets, and capacities to learn and respond, with some organisations constrained in their responses due to their own past practices.

• Organisational Resources
The organizational resources perspective of green design asserts that organizations with greater resources will be better able to engage in green design because such organisations will more readily have the finances and personnel necessary to shoulder the initial costs of such efforts (Atlas and Florida, 1997).Kemp et al (1992) and MIEB (1994) supports the same notion by arguing that what is important is the ability of an organisation to absorb the immediate costs of considering green design than the incremental benefits through future cost savings.Large companies are therefore in a better position to adopt green design because of their relatively large asset base.

Constrained electricity generation capacity and sustainability
Power generation capacity is constrained worldwide, thus power utility companies are urging consumers to save energy and in some cases give rewards to consumers that implement energy efficient technologies such as virtualization.Pacific Gas and Electric Company is one example cited by Kavanagh (2009).The Zimbabwe Electricity Supply Authority (ZESA) is urging consumers of electricity to substitute standard high energy consuming bulbs (100W, 60W, 40W) with energy efficient bulbs with 11W energy consumption or less.They claim that this substitution reduces energy usage by 75% (ZESA, 2010).

• Ethical Considerations/Driver
Mines and Davies (2007) define ethical driver as the pursuit of socially responsible business practices and good corporate citizenship.As the green movement permeates every aspect of corporate life, businesses are increasingly seeking social recognition as concerned entities of global and local communities.Davis and Blomstrom (1975) as quoted in McGee (1998), define social responsibility as the managerial obligation to protect and improve both the welfare of society as a whole and the interests of organisations.Organisations use Corporate Social Responsibility (CSR) initiatives to capture the mindshare of their key stakeholders such as investors, consumers and the general public (Sen, Bhattacharya, and Korschunet, 2006).
Characteristics important for Green IT adoption: Molla (2008) considers that Green IT is likely to flourish in organisations that have large installed IT assets.Businesses that run high density servers are likely to feel the pressure of rising electricity costs and the challenge of powering, cooling and housing those technologies.This might lead to adoption of more energy efficient servers, and /or server consolidation and virtualisation technologies (Mitchell, 2008).Different sectors of the economy respond differently to Green IT.Utility companies such as oil, gas and electricity, as they have direct involvement in environmental policy, are likely to be early adopters of Green IT.Other information intensive businesses such as data storage providers, finance and telecom providers can also be expected to move to green IT early.In terms of size, while large corporations tend to have dedicated data centre facilities, and medium businesses run server racks amidst other office facilities, small businesses are less likely to be concerned about Green IT.

MATERIALS AND METHODS
This study employs a multiple case research approach to assess the extent of uptake of the Green IT strategies in the banking industry in Zimbabwe.Interviews with senior management in the financial services industry, IT consultants and the Environmental Management Agency were crucial to gauge the uptake and understanding of the contribution of the industry in combating global carbon emissions.

Research Philosophies:
In this study it is important to gain an understanding of how the adoption of Green IT is approached in organisations.The goal is to elicit a variety of approaches and challenges, hence the use of multiple case study approach.The investigation of the extent of adoption of Green IT strategies suits a descriptive study.

Population:
The researchers focused on organisations from the financial services industry, in particular, commercial banks.All of the organisations are major players in the banking industry in Zimbabwe under the supervision of the Reserve Bank of Zimbabwe and the Ministry of Finance.The sampling frame in this study contains 25 institutions.
Sample size: Simple random sampling was applied to the banking institutions under the supervision of the Reserve Bank of Zimbabwe and Ministry of Finance, since these institutions bear similar characteristics (minimum variability) and the target population is fairly small comprising 25 operational banking institutions (RBZ, 2011).Each institution was allocated a number to represent it and these were randomly sampled to get six(6) institutions.Six represents about 30% of the population, thus satisfying the general rule on sample size.The same procedure was carried out for selection of target branches for each bank, until 10 branches per bank were selected.From each institution, questionnaires were sent to executive management (12), IT management (12) and branch managers (60).Five questionnaires were sent to the Environmental Management Agency.A total of 89 questionnaires were thus administered.

Data type and Sources:
The study relied more on primary data sources and sparingly used published data from secondary sources.
Data Collection: Two distinct questionnaires were developed.The first questionnaire was administered to six financial institutions to determine the uptake of Green IT; their current state of IT development and other characteristics deemed necessary for implementing Green IT strategies, including a trend analysis on data centre energy consumption, fuel and stationery usage over a period from 2006 to 2010.The second questionnaire was directed to Environmental Management Agency (EMA) to solicit its plans, policies and strategies in protecting the environment.

RESULTS AND DISCUSSION
The results are presented within the context of the objectives focussing on specific themes.

Relative Green IT awareness by managerial level
The graph above indicates relative awareness of Green IT and its associated benefits at both operational and strategic level within the sampled banks.Overall awareness indicated is 58% of the sampled managers .There is relatively little awareness (3%) at branch managerial level as these are not included in strategic decision making, however the executive (75%) and the technical IT (95%) managers indicated great awareness.Consolidated institutional awareness indicates that 75% of the sampled banks exhibit awareness.It is this institutional awareness that was used to conduct confirmatory statistical tests of the hypotheses.Usage of the Green IT initiatives is very limited despite the awareness.According to Molla (2008)  Meetings in these institutions are conducted quarterly, though the ideal situation is having these meetings with branch heads monthly, as shown in table above.The main reason provided is containing the cost of travel of the centre heads to the Head Offices in Harare.The purpose of the meetings is to review progress on attainment of budgets.Banks B and C would bear the most cost of travel as they have more branches than the other organisations.The results indicate that these banks (100%) have not adopted teleconferencing or video conferencing as a way to save on travelling costs and minimize carbon emissions, at the same time maintaining the ideal situation of having monthly meetings (Verizonbusiness, 2009;Kavanagh, 2009;Kolman, 2008).Mode of meetings is largely face to face.The banking sector revealed numerous (unreported) frauds since the inception of the multi-currency system in February 2009, with millions of funds lost (Bank sources).Fraudsters found the incentive high with the involvement of internal staff members of the banks.Some of the cases involved the abuse of the IT function, as was the case with Bank A Despite such operational risks posed by IT and the presence (100%) of IT Governance structures in the banks reviewed, there is no specific board member to represent IT function as a strategic tool.Molla (2008) regards awareness, commitment and resources of a firm as relevant to the adoption of Green IT.The awareness and commitment comes from the top management cascading downwards.Therefore despite the presence of an ICT policy document and IT governance, the absence of a board representative for IT governance may allow for ineptness right from the top of the organisational radar.This defines organisational readiness for Green IT adoption.All the banks (100%) indicated that they embrace a Star network topology with branch and departments' servers all linked to the Data Centres servers.This network topology entails purchase of several servers and thus not surprised by the value of the IT assets.Virtualisation of server as enshrined in Green IT adoption entails replacement of these several servers with a few located centrally at the Data Centres.The various workstations across the branch network can access the main servers on-line.Virtualisation therefore enables workloads from those underutilised servers to be consolidated to a fewer number of servers.Installation of a VoIP (Voice over Internet Protocol) backbone makes use of a central server linking several servers in other centres within the network.VoIP utilises two TCP/IP protocols, SIP and RTP, to carry voice traffic over IP data networks.An Asterisk server acts as the PABX of the VoIP network, switching calls between callers as requested (Kavanagh, 2009).

c. Incorporation of IT
With such backbone successfully installed, it is expected that telephone costs can be substantially reduced, adding to the 20% improvement in operational efficiency (Spafford, 2009).Telephone extensions would be replaced making a rental saving from the handsets provided by the local service providers (Kavanagh, 2009;Kolman, 2008).An enquiry from a local IT Consulting Company indicates that for a network of 800 workstations (Bank B), it cost $133,150 inclusive of installation and configuration costs.For Bank C, the cost would be $166,150.The quoted system only supports 3-way conference calling, thus the cost to such high network institutions like banks would be far more than the figures above.This indicates that future cost savings comes with substantial amount of money being invested.The table indicates that on average internal calls make up the greatest percentage of total calls made using landlines.Embracing VoIP can thus help significantly reduce the number of internal calls in particular and thus make a huge saving on telephone costs.

Mean monthly data centre energy bill against IT asset size
The figure shows the relationship between IT asset size and mean monthly energy bill.The results indicate a fairly strong association between the two variables.The calculated R square value of 0.711 indicates that of the variation of energy bill is explained by the IT asset size.The corresponding adjusted R square value of 0.567 also indicates a relatively strong association that 56.7% of the variation of mean monthly energy bill is explained by the asset size.According to the table above Bank C is the major user of fuel for vehicles as well as for generators.Fuel usage shows a declining trend since 2008.A t-test for independent samples was used to confirm the significance of the above findings.The results show that there is no significant difference between Green IT awareness and fuel usage.The results do not fully explain the differences in mean fuel usage between organisations that have adopted Green IT and those that have not.Organisations that have adopted Green IT initiatives like teleconferencing, video conferencing, and telecommuting are expected to exhibit lower usage of fuel as travelling is reduced.The table shows some of the challenges and opportunities faced by the sampled organisations in their quest to adopt Green IT.

How does EMA promote the use of environmentally friendly initiatives?
Environmentally friendly initiatives are promoted through the licensing system (polluter pays principle).In terms of the polluter pays principle /licensing system, any operator whose activity has a negative impact on the environment is required to apply and pay for a licence.The amount payable for a licence is proportional to the amount of pollution caused.In other words the more an operator pollutes the more he pays.Incentives in the form of cheap and free licences offered to those whose activities are environmentally friendly are offered.

CONCLUSIONS AND RECOMMENDATIONS
The major challenge for adopting Green IT initiatives is the limited financial resources to purchase all that is required for full implementation.Internet access remains unreliable to base business on web based technologies.The cost also associated with internet access is relatively on the high side.Reciprocal adoption of some financial innovative products by the other stakeholders along the business value chain has been poor, as some machines are scantly used.In the absence of high reciprocation, Green IT adoption may take long to achieve full results.The economy is still highly dependent on cash transactions, hence elimination of paper in the banking industry will take some time.
There are opportunities for improving operational efficiency associated with Green IT adoption, but are hampered by the challenges noted, in particular, the limited financial resources.The banking industry is regarded as a light polluter of the environment, as such regulations are persuasive rather than mandatory.The environmental regulatory framework is considered weak to drive the industry into implementing environmentally friendly initiatives like adopting Green IT and also environmental awareness in Zimbabwe is not considered as important as it is in developed nations.Resources are regarded inadequate to fight environmental protection by the Environmental Management Agency.
Given the stage of development of the banking industry in terms of implementing environmentally friendly initiatives, the recommended strategic choice is eco-efficiency.This strategy emphasises high resources productivity, hence operational efficiency.Adopting Green IT is seen as offering the best strategic fit in line with this generic strategic choice, its ultimate goal being the improvement in operational efficiency by the acclaimed 20% (Spafford, 2009), though not all that implement will realise the same benefits.The choice of strategy proffered is in line with the objectives of Green IT of reducing IT carbon footprint (3%) as well as assisting in the reduction of the other 97% from other industries (Infor-Tech, 2010).Adopting Green IT is therefore an avenue that can be used by the banking industry to operate efficiently in an environmentally friendly manner.It is expected that a bank that may take a lead in implementing Green IT may enjoy cost advantage over other banks (first mover advantage) and be able to extend lower bank charges to the banking public that is currently immersed in a sea of bank charges.
awareness should be great at top level management in order to drive adoption and this should cascade downwards during implementation.

d. Infrastructure support for Green IT initiatives
The table indicates that only one bank (25%) has IT infrastructure capable of supporting rolling out of Green IT initiatives.There is however need for purchase of other additional equipment and replacement of current high energy consuming workstations at Bank B. The results indicate that there is still a long way in Green IT adoption.