The Challenge With The Circular Economy

In 2025, Forrester predicted that more than a third of Global Fortune 100 firms will commit to circular economy goals. We recommended that, this year, enterprise leaders perform infrastructure lifecycle assessments to understand the environmental impact of their choices.

Further for manufacturing, Forrester’s report, Embrace The Circular Economy To Make Manufacturing More Sustainable, describes five Rs that matter for manufacturers: reduce, reuse, repair, refurbish, and recycle. For IT, however, circular economy practices face challenges. Some of these key obstacles include:

  • Enterprise. Shifting habits toward more sustainable practices can be difficult.
  • IP and proprietary ecosystems. Existing regulations around IP may not always support circular practices and can sometimes incentivize waste.
  • Economic incentives. The initial investment for transitioning to circular models can be high, and the economic benefits may take time to materialize.
  • Infrastructure availability gaps. Adequate technology infrastructure for recycling and reusing materials isn’t always available.

The challenges are magnified by rapid technological shifts, power demands, limited resources, and the increasing importance to nations, their businesses, and their citizens globally.

Firms need to identify whether they need to dispose (as with the linear economy) or recycle the asset and its components. Tech leaders must know the asset value within and outside the organization. This data is the key to making an informed decision and whether keeping or recycling an IT asset (and its components) is more valuable or sensible. But this critical information is currently lacking and can drastically change the decisions made today.

The CARFAX Approach

At Forrester, we propose gathering information about IT assets and their service records, much like CARFAX does for used vehicles. This doesn’t address all the challenges of circular economy, but we believe that it’ll assist in mitigating the impact of many of them. One of the recent developments in this area has been the French repairability index. The CARFAX approach will address some of the challenges so far debated in this approach, such as:

  1. Not relying on manufacturer self-assessments.
  2. Wider scope — IT in the data center as well as IT in the workplace (end user devices).
  3. Focus on both availability and affordability.

How To Get This Information

The information needed to enable this approach is already available for many IT organizations, via a configuration management database or bill of materials that contains the information of IT assets and service tickets for those IT assets. Understanding whether an IT asset is up to date with the latest firmware and patches, has had parts replaced, has had issues, or has been kept in an environment that’s out of specification helps an organization understand the value of what they have: Is the IT asset worth keeping? Is it better to recycle or dispose of it? Can you sell/auction it to recoup some capital?

Who Can Build This Dataset?

An independent third party can help your organization by letting you know the market demand for those IT assets, the available supply, and its value. This information enables tech leaders to make the right decisions with their IT assets. Without the critical context of this data, organizations may not make optimal decisions on whether to retain, reuse, or dispose of IT assets. After all, these decisions cost money, time, effort, and may face risks by using failure-prone IT infrastructure.

This Is Just The Start

Parts of this approach involve having an independent entity on board. What that entity would look like — wholly private, nonprofit, or a public entity — is open to debate.

There are parts of the CARFAX approach that still need to be addressed:

  • The need to handle sanctions and export controls between countries
  • Transparency and trust with the entity
  • Requiring the entire ecosystem (organizations, server vendors, support providers, etc.) to be involved in data sharing to enable this approach
  • Dependence on the reported data (must be accurate, comprehensive, and up to date)