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Circular economy helps IT build toward sustainability

Applying the circular economy method is likely the right choice for your business—assuming you want to save money and help the planet. It involves developing IT consumption processes that reflect on corporate ethics and responsibility and enable a more sustainable business environment.

IT efficiency is a goal every IT department has in the back of its mind. A focus on efficiency usually translates into a more effective IT department, one that can deliver resources to the business in an effective and timely fashion. But one area that quite often doesn’t get as much attention is financial efficiency. IT is usually focused on being an effective service provider: It looks at its budget, determines the equipment necessary to meet annual goals, and makes the hardware investment to allow the department to hit those goals and service the business units.

But a concept new to IT is starting to impact how IT departments can be the most efficient: the circular economy. While not a new idea, a circular economy model for IT that focuses on sustainability, reuse, and recycling brings a much different approach than what has often become a more throw-away model of technology consumption. All too often, even large corporate enterprises use an ad hoc model for purchasing new IT hardware, usually on a “I’ve got a new project so let’s buy some new hardware” basis, a technique at odds with the fundamental concepts of a sustainable economy. Re-examining an asset lifecycle model is the best place for IT to start. It not only helps companies become more economically efficient, but also enables them to do their part as responsible users of global resources. 

Comprehensive asset lifecycle management can be a thorough approach, but for best alignment with a circular economy model, companies should be primarily concerned with the acquisition and disposal of hardware asset as part of an asset lifecycle. However, that doesn’t mean a business should wait for those stages of the lifecycle to begin considering the how, where, and why of asset disposal.

Where to start

While it might seem that concerns over how you are going to dispose of hardware assets is something that matters only as the product nears its end of service life, a responsible corporate approach is to consider these issues from the start. In fact, according to HPE Financial Services' Circular Economy and IT Mindsets Study, two-thirds of companies have now developed sustainability programs specific to their IT departments. The most effective business model, for both the circular economy and asset lifecycle management, is to build a relationship with a partner that understands both your business model and what your company wants done with its hardware assets. And in an era of increasing governmental regulation, it is entirely possible that how hardware is disposed of falls under very specific regulations regarding environmental impact.

Circular Economy: HPE’s complete lifecycle approach yields financial and environmental savings at scale.

Unless your company's business is hardware recycling and disposal, partnering with someone that is in that business allows you to get the most for your out-of-date equipment without risking potential regulatory or environmental problems. This is especially true if your company is global, with facilities in multiple countries.

What to look for

From a business perspective, the simplest way to handle end-of-life data center IT equipment is to trade it in on next-generation hardware. Most vendors allow you to maximize the value of existing equipment if you trade it in on their new equipment. While this seems simple, it is important to ensure you are getting the best value for your equipment. Over the life of the hardware lifecycle, you may have upgraded the equipment you plan to trade, adding such things as RAM, hard drives, or new blades. When you trade the hardware, you want to make sure you get value for those upgrades. With a lot of equipment in a large enterprise, it is easy to forget which server had RAM added or which rack got additional hard drives. Every component within a system has value, and a good partner audits each component before assigning value. You should get detailed information on all of the equipment in the program and an analysis of the appropriate resolution, be it refurbish or recycle, with the end goal you establish as part of the process.

And don’t forget that most data center hardware venders offer programs beyond simple trade-in, with financial incentives to encourage you to use their asset recovery services.

But what if your business model doesn’t allow you to simply trade in your hardware. What if your choice is to go with recycling? Once again, you need a good partner, one that can demonstrate an end-to-end chain of custody, especially if you want to ensure the equipment is physically recycled and not refurbished or remarketed. The reputation of IT recycling businesses is, perhaps, not the best. We’ve all heard the stories of supposedly refurbished hardware being purchased only to discover hard drives full of data from the previous owner. Even in a case where the data is unreadable or unusable, such an action could easily violate local privacy regulations, opening the original owner of the hardware to regulatory penalties.

This is simply an example of why the reliability of your partner is paramount if you are allowing hardware to be refurbished and reused. It is unlikely that your IT department has the time or the budget to ensure that every data storage device has been properly wiped and reformatted, making this double-checking a task best suited to your chosen partner.

Among the ways to evaluate the effectiveness of your organization's efforts to work within the circular economy is to track the status of your assets in the recovery process. Also, look to obtain reports related to your organization's ability to be more sustainable, such as how much of your retired equipment is being refurbish versus recycled, as well as the potential costs, energy use, and environmental impact of your asset retirement process.

A good plan and reliable partner

There seem to be endless examples of both the good and the bad of dealing with asset retirement. But to get the best value for the business while embracing the sustainability aspects of the circular economy, a business needs two things: a plan that encompasses the entire asset lifecycle—not simply disposal at end of life—and a strong partner that can address the end-to-end process of asset retirement, while offering the business a good selection of options throughout the process. A strong asset recovery plan goes a long way toward meeting the needs of an ethical and responsible corporate environment.

The circular economy: Lessons for leaders

  • Effectiveness starts with a plan that encompasses the entire lifecycle.
  • Recycle, refurbish, reuse are all parts of the process.
  • Partnering with a specialist helps businesses derive the greatest value.

Related links:

How the circular economy lowers IT's total cost of ownership

This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.