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Spencer Green
Chairman, GDS International

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25 May 2011

Power and responsibility

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V attenfall Europe’s CIO Hans Rösch talks to Ian Clover about the challenges he faces in managing the IT department at one of Europe’s most responsible and energy suppliers.

“Our data centres have been adapted to reduce cost and their impact on the environment, but also to become more flexible”
-Hans Rösch

It's one of the most widely accepted doctrines of our age: 'with great power comes great responsibility', and when taken into a global context, you see that it is a social dogma that generally holds true. The president of the USA has to juggle enormous military, economic and social power with the perpetual scrutiny of the world's media and political elite; in nature, the male lion's superior strength comes with the caveat that it is his job to protect the pride from external threat; and the very best supercars combine breakneck speed with the most sophisticated braking mechanisms the world has ever seen. Regretfully, some people, groups and organisations exploit this tenet, wielding their power disproportionately while caring little for their overall responsibilities, and skewing the balance that nature and mankind has nurtured so well.

And when a powerful entity gets it wrong, there invariably follows a media storm - BP's Deepwater Horizon spill being an all too-recent and disastrous case in point. But when a company consistently balances great power with careful, commendable responsibility, barely a headline is made.

It is under such calm circumstances that Vattenfall, the Swedish power company, operates. The Vattenfall Group is one of the leading power companies in Europe. It is the continent's fifth-largest energy provider, and its largest heat provider, producing, distributing and selling energy to more than six million European customers.

With such reach and impact, the company is acutely aware of the influence it wields over customers' consumption habits, carbon footprints and CO2 output. As a result, the Vattenfall Group has developed a keen sense of corporate responsibility, and has developed an IT department that is charged with ensuring the company's strategic operations are efficient, consolidated and as environmentally responsible as possible.

At Vattenfall Europe (which covers the German and Polish activites of the group), CIO Hans Rösch knows only too well the level of responsibility on his shoulders as he steers the company's IT objectives through the hoops of the group's five strategic ambitions: to be number one for the customer; number one for the environment; profitable growth; a benchmark for the industry and the employer of choice. IT, as ever, is playing an instrumental role in helping Vattenfall live up to all of its inherent and adopted responsibilities.

"We have taken these five ambitions as a starting point to developing an IT strategy map that is similar to a balanced score card," says Rösch. "This score card actually breaks down our strategic ambitions into 17 objectives. Each of these is related to at least one of the strategic ambitions and, in turn, each of the 17 objectives is supported by a number of initiatives or strategic projects and tracked by KPIs so that we know we're following our strategy. "

Turning company ambition into tangible benefit for the customer has long been the preserve of the IT department, as Rösch explains. "For the customers, serving them breaks down into two IT objectives. Business and IT build efficient business processes, and secondly IT is proactively involved in developing new offerings that create competitive edge. So we're looking both at the existing business, how to make it as efficient as possible and what IT can do to help that, but also looking into the future at what new offerings there are."

One example cited by Rösch is Vattenfall's highly publicised engagement in E-mobility. "E-mobility is intrinsically linked to IT. So if you look at the loading station, an electric filling station on the street, this is connected to the billing system, and we are working on the future possibility to actually go roaming between stations belonging to different providers which is a challenge."

Efficiency with IT

In addition to serving the needs of the customer, the IT department of Vattenfall Europe is also tasked with consolidating its own infrastructure with the aim of making the company as efficient internally as it projects to be externally.

"We undertook a group-wide strategic review of infrastructure in 2006 and realised we were faced with two challenges," says Rösch. "First of all, when benchmarking the total cost of the IT infrastructure, it was clearly the case that it was over the benchmark level. So we worked towards consolidation and integration to reduce the cost of the IT infrastructure, while at the same time looking forward to predict that increasingly our business would integrate across the various countries and across the parts that Vattenfall has acquired over the years."

The "One IT Infrastructure" team identified that the way in which people were working was going to change dramatically, so they developed a set of tools that support the creation of virtual teams, allowing people to work with Stockholm partners in the morning, Brussels colleagues in the afternoon and then with teams from Hamburg and Berlin the following day. Such a setup obviously called for a more sophisticated and - most of all - common IT infrastructure.

"The infrastructure had to allow people to log into the wireless LAN without any problems at any site," says Rösch. "We needed far more facilities for video conferencing, both from video conferencing rooms but also from desktops which we put in place. Audio conferencing took off from almost nowhere but people would always only hire external facilities. Now we have internal servers for that, and virtual project rooms based on enterprise content management. This technology really supports our objective of seamless cooperation across borders."

To further deliver enhanced efficiency and more effective consolidation, Vattenfall has also worked on centralising its IT infrastructure - a move that has required patient, considered planning in order to achieve the efficient performance that is so important to the company.

"There was a decision to absolutely make consolidation and integration a priority before considering changing the sourcing model," reveals Rösch. "Now we are gradually looking into sourcing components from the market, so European-wide tender on WAN services is out. Another principle we have also agreed on is our staff and employee representatives will make very careful studies of the market when evaluating opportunities to buy services off the cloud, for example. We're currently looking into unified communication and collaboration-like services, such as web conferencing. We have asked the suppliers on the shortlist to always specify two options."

"One option would be to run the services on a Vattenfall premise, onsite in our data centres. A second option would be to simply supply it as a service out of the cloud that we then have to interface and connect with our own infrastructure. We will see which is most economic from a Total cost of ownership perspective."

As always with the cloud, security and data protection is a pressing issue, and it is something that Vattenfall takes very seriously - it is their responsibility to protect the data of their customers, and it is a responsibility that often falls into the hands of the IT department. "Protection of our customer data is something that we are very, very careful about," says Rösch. "It is an extremely sensitive issue in Germany and we are happy to say that so far we have not been involved in any of the big scandals that have swept through German industry in recent years. We'd like to keep it that way."

Emissions statement

In managing the company's data, Rösch faces pressure to consolidate cost at all times, while also working within the strict parameters of data security and corporate responsibility. However, as part of the consolidation process of Vattenfall's IT infrastructure, the company's own carbon emissions have been impressively managed and reduced too. "Cost is a primary driver of our consolidation strategy, but our actions have also helped cut CO2 emissions, going from the old way of direct attached storage to storage area network systems that have also helped the environment in a more indirect way."

Although cutting CO2 emissions was never the primary objective behind Vattenfall's consolidation program, the eventual result was warmly welcomed by the company, not least by Rösch himself. "We have been suffering from the same problem that every business faces - data volume grows and eats up almost any savings that you make on unit price reduction year by year." In managing surging data growth - "a permanent challenge" says Rösch - Vattenfall Europe's IT department has undergone a rapid improvement of its data centres.

"Our data centres have been adapted to reduce cost and their impact on the environment, but also to become more flexible," says Rösch. "To date we have reached a very high degree of virtualisation: we're currently at 45 percent and are targeting 60 percent by the end of 2011. This facilitates our ability to set up a new virtual system for training or testing, and improves our ability to act in cases where we have to carve out parts of the company, unbundled due to regulation, or bring things together in merger situations. We have become a lot quicker on the infrastructure side, but we are still not where we want to be. It remains an ongoing challenge."

With a company-wide announcement that the Vattenfall Group is committed to reducing its CO2 emissions by a third and will focus on producing low-emitting energy and gas in the coming years, the pressure is on to make good on these claims and aims. Vattenfall wields great influence throughout Europe, and it is a position that Rösch and the IT department must respond to.

"We have, of course, new challenges relating to the specific needs of the new forms of energy production," he says. "We have enormous engagements in offshore wind. It is a challenge for the IT department to support the project during the planning stage, and we are piloting a new project portfolio management system with our wind business unit. Our support comes in the form of helping the developers build these wind plants more efficiently, and also in helping them stay on track in terms of timescale. Once they are up and running, there remain specific challenges with maintenance and logistics, which is another specific challenge that is being addressed by our current IT activities."

As well as aiding and assisting the creation and maintenance of Vattenfall's impressive wind energy objectives, IT is also helping to internally lower the company's carbon footprint. "We have come some way in consolidating the number of data centres we use, but we are also looking towards improving the power usage effectiveness at these centres," says Rösch. "At the facility we run in Hamburg the power usage effectiveness (PUE) is 1.7, while in our brand new facility in Amsterdam it is 1.27, which is just about the best benchmark that I am aware of."

Finally, Vattenfall Europe has also switched the focus of responsible living on to its own employees, developing an internal project that has been designed to raise energy consumption awareness with the company. "We have installed smart meters at every floor on the main office building in Hamburg, and display each floor's energy consumption on a big screen at the entrance to the company restaurant," concludes Rösch. "We then organised a competition to judge which floor could bring down its consumption rates the most. There was a final prize of course, but the most interesting thing was seeing how much we were able to mobilise people to really change their ways." So, lights were turned off when rooms were not in use, PCs were powered down each evening and unnecessary printing was kept to a minimum.

"If you look at the emissions of Vattenfall as a whole then this project probably didn't have much of an impact, but it was invaluable in educating our staff about energy consumption, and it is something that we can now take to the market and help our customers implement similar projects." With Vattenfall's own staff leading by example, the power company of choice for millions of Europeans is shouldering even more responsibility and environmental awareness, for which it should be soundly applauded.

Low carbon living in Berlin

Putting theory into practice, Vattenfall Europe is driving an innovative low-energy living project in Berlin. Called 'Märkisches Viertel' (an area of Berlin), the company has equipped 10,000 apartments with smart meters, the aim being to encourage its residents to reduce their CO2 emissions. Current average emissions per typical household amount to 40,000 tons a year. The Märkisches Viertel scheme hopes to see these households reduce this to just 17,000 tons.

"This is one of the largest pilots in Germany in terms of bringing smart meters to a large number of ordinary households," says Rösch. "For about 350 households we hooked these smart meters up to their TV using a small connector so that they have a highly visible display without the added hassle of having to fit much new technology. About 800 households have decided for he advanced option of online visualization. At the high end there is the most advanced option used by a few families, which allows the display and analysis of the consumption on any iPhone, or iPod touch by using a small app. The scheme has just gone live and is being tracked by a socio-scientific institute (IfS Institut für Stadtforschung und Strukturpolitik GmbH) to really measure the impact it will have on regular, average people rather than previous pilots in the past, where already energy-conscious individuals volunteered. We feel that this will be more representative of the population at large."

Vattenfall has modified the district heating plant at Märkisches Viertel to make it a combined biomass plant, based on power-heat generation technology. Once these reduced energy requirements are fully modernised and measurable, the plant will help Märkisches Viertel become Germany's largest low-energy residential development, boasting - it is hoped - a CO2-neutral energy balance.

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