Environmental considerations are increasingly important for organizations when deciding on technology-related investments. The positive environmental impact of any technology solution should be highlighted to customers. Vendors must therefore identify and, where possible, quantify this impact when demonstrating the business case (ROI) of their offering.
Forrester’s Total Economic Impact™ (TEI) methodology has been used for decades to help customers articulate the financial business case for technology-related investments. The analysis is based on data that comes directly from users of the technology. Through in-depth interviews, Forrester captures the different benefits users have experienced from a technology investment and related metrics, such as increased productivity or cost savings. This same methodology can be used to capture the sustainability benefits of a technology investment, which is then integrated into the broader business case.
Over the past few years, more and more TEI studies have included such benefits. A few examples demonstrate the point:
- Technologies that improve communications — such as collaboration, digital whiteboards, and information sharing — reduce the need for employee commuting and business travel and therefore transport-related greenhouse gas emissions.
- Digital transformations replace inefficient, paper-based workflows with faster automated ones while also reducing the use of paper and postage.
- Migrating away from internal data centers to cloud-based approaches generally results in overall hardware and energy use reductions; this is because cloud providers such as hyperscalers are able to use hardware much more efficiently, implement advanced energy reduction methods, and invest in renewable energy.
- Artificial intelligence (AI) and machine learning technologies optimize processes and reduce costs, including shipping and energy use.
- Monitoring and automation technologies improve efficiency and can also reduce energy use or the need for alternative manual approaches.
Quantifying these environmental impacts, however, is not always straightforward. The implementation and operation of a solution may have some negative environmental impact, in addition to its positive ones. For instance, the impact of the embodied energy — the energy associated with the manufacture of a product — must also be considered whenever a hardware upgrade is required.
While customers that have implemented a technology may not always be able to quantify the environmental upside of their investment, Forrester can leverage its expertise to make an estimate. At the very least, the impact can be included as an unquantified benefit and/or future flexibility upside.
As the climate crisis intensifies, it will become more critical to demonstrate and validate any environmental upside of your products and services. Forrester’s TEI team can help define and quantify these benefits, so your customers can include the sustainability impact into their business case.