The document discusses sustainability and profitability in the information technology industry. It notes that while IT has provided tools to improve productivity, the rapid growth of the sector has overlooked sustainability issues. IT companies must develop new value-added services and think outside the box to promote innovation and build competitive advantage. Sustainability is now a vital topic for organizations and considers economic, environmental, and social impacts. While IT investments can achieve cost savings and revenue growth, adopting sustainability strategies can further enhance profitability. Green IT is growing and organizations are leveraging IT to facilitate sustainability across operations to reduce environmental impacts and costs. Focusing on sustainability provides opportunities for companies to stay profitable by appealing to environmentally conscious customers.

1. Sustainability and Profitability
1. Introduction
The world is changing and with it the demands and wants of the customer are also rapidly
shifting based on new services or products and technology. Information technology business is
undergoing a significant change, driven by innovative technologies, liberalization and
globalization (Al Debei & Avison, 2011). In the last the two decades we have seen a surge in
Information Technology and high competitive in technology services in marketplace. Most rapid
and major changes have been witnessed in the IT sector. Numerous countries have overhauled
their legal and regulatory framework for fast privatization and liberalization (Farajian, 2003).
So today’s ICT executives need to get a clear picture about the market and read the
environment in the market accurately and which the industry operates in order to make right
decisions that influence the direction of their organizations in a right way. Therefore, enhancing
their organization competitive positions will be build up through improving their ability to study
the market in right way and respond quickly to rapid environmental changes with high quality
business decisions (Avison 2011).
The Information Technology industry (hardware, software and services) has provided many
tools to help generate and pro cess data, communicate globally, and improve productivity.
However, all the rapid advances in this sector has not made our society more sustainable.
Integrated economic, ecological, and social sustainability issues have been largely overlooked
by the IT se ctor and Silicon Valley leaders, despite the significant opportunities that these
issues present to 21 st century businesses
1.2 Research Background
The Middle East and surrounding emerging markets are continuing to grow, and the
region’s Information Technology and other technology services must rebuild their competency
if they want to survive and capture their fair share of that growth. So in developed markets,
they must develop new value-added services that can differentiate them from competitors
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2. IT companies must work to derive value through innovation and creativity. Simply, offering
competitors’ products, services or pricing plans will not add value, and will have a negative
impact on the market and company profitability as well. Therefore, in order to operate viably,
organizations must thinking outside the box and looking for opportunities outside their markets
and industries to build up a new ideas that promote internal innovation. This can be achieved
through using certain strategy that can achieve the desired goal. Establishing strategy for
business growth must be well studied in light of strong competitive positioning strategy in the
marketplace for Instance, mobile operators are competing head to head on the marketing,
service quality, and also services price. They invest heavily into the marketing (TV ads, road
shows, social media), competing for the latest mobile technology (3G-WCDMA, HSDPA; 4G-LTE,
LTE+) with continuous efforts in bringing the services price down (Khong 2012).
Therefore, the changing business climate found many firms looking for alternative ways to
provide improved quality in their products, improved service to their customers, reduce time
and cost to achieve company’s goals and get profit and reputation (Al Mimar,2012).
Furthermore, the global trade has opened the competition doors for companies, and placed
these companies under unprecedented competitive pressure (Hsuai, 1998). Businesses thus
must understand how to maintain their competitive advantage and overcome the critical
problem of global competition (Al Mimar, 2012). Firms and organizations have been using their
core competencies to gain competitive advantage. Nowadays, computers, laptops and mobile
devices – information technology (IT) is not only a booming economic sector but also an
energy-intensive one. It accounts for 2% of human greenhouse gas emissions worldwide, as
evidenced in a study by Global Action Plan. This figure can be reduced if the green segment, or
Green IT, continues to grow. Therefore, using a blue ocean strategy is considered as has a
starting point for a company to win in the future. (Kim & Mauborgne 2005) and build a compete
others.
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3. 1.3 Information Technology Investment and Profitability
Information systems studies as well as other reports have made significant inroads in
trying to relate IT and IT-enabled functions to firm performance (Kohli and Grover, 2008). These
studies have shown that organizations get benefit from investments in IT and IT-enabled
capabilities, prompting Dedrick et al. (2003, p. 23) to call it “the profitability paradox” of IT.
Furthermore, while researchers have found that IT investments can allow firms to achieve both
revenue growth and cost savings (Kauffman and Walden 2001), Previous studies have mainly
focused on investigating direct effect of IT on profitability but they rarely take into
consideration the aspect of cost or revenue. IT has supported cost reduction through better
information sharing and creates new operational process in the supply chain framework.
Profitability in the organization can be enhanced if the costs have been lowered through the
use of IT (Kohli and Grover, 2008). This can either directly or indirectly affect the profitability of
the company depending on the nature of implementing the strategy
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4. 1.3 Information Technology Investment and Sustainability
Sustainability today is considered as a topic of vital growing importance in all aspects of
organizational life. Organizations and CEOs are working thoughtfully to adopt new strategies to
incorporate a balance among economic, ecological, and social. Elkington J (1998) first proposed
the concept of the ‘triple bottom line” i.e. a sustainable organization has measureable
economic, environmental, and social impact goals. So we note that there are a lot of
researchers and business people have written and added this concept, and its use in practice
However, not all organizations applied to adopt sustainability with the same totalitarian or way
as described by Elkington. Some firms have applied a sustainability tool for market reasons;
they are adopting "green" services or even products to appease environmentally sensitive
consumers. Furthermore, the recent scholarly research has illustrated that the adoption of
certain strategy toward the protection and activate the role of sustainability will consider as
vital for organizations who want to stay competitive (Marcus & Fremeth, 2009).
Challenges include initial costs, the sometimes lengthy periods before companies see a return
on investment, and the need to keep up with fast-moving technology and to re - educate
employees—whether these be the chief executive officer or rank-and-file workers—about the
benefits of sustainability. Special attention must also be paid to ensuring transparency and
good governance throughout all sustainability initiatives to make sure that policies are followed
and goals are met.
“Sustainability is without doubt the most significant reorientation of global business strategy
and operations since the high-tech and biotech booms of the 1990s,” according to a report
released in September 2008 by AMR Research, a US-based supply chain and IT consulting
company. “It is inextricably linked to both the contemporary and future challenges of global
climate change and the anticipated low- carbon economy.”
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5. 1.3.1 Sustainability in economic aspect
In economic aspect, for example Economists David Pearce and Edward Barbier define economic
sustainability as “ensuring that future generations have at least the same potential economic
opportunities to achieve welfare as the current generation” (2000, 21). In addition and
according to Denis Darragh, chairman of the Institute for Market Transformation to
Sustainability (MTS), profitability and a clean environment are complementary, he says
“Sustainable products increase corporate profits," for many reasons, such as lower cost, fewer
regulatory restrictions and quicker introduction to enter the marketplace. He also mentioned
that sustainability has always been a core value because it is good for a company business
1.3.2 Sustainability in environmental aspect (Green IT)
In environmental aspect, Researchers have estimated that information and communications
technology (ICT) is responsible for at least 2 percent of global gas emissions, such as,
datacenters, computers and other technologies (Alcatel 2010). The environmental sustainability
of IS has been considered as a main topic in the core of IS research (Elliot, 2007). It has become
clear that there is growing trend towards sustainability as it considered as driver of new growth
and contributes to raise the demand of consumers for environmentally friendly and energyefficient products. On the other hand it was found there is growing interest from different
sectors such as business and academic toward development of green services and products
(e.g. Baumann et al., 2002).
We can say, that sustainability in an enterprise can mean small adjustments or a major
reorientation. Information technology (IT) is not itself a big part of the problem, as it is
estimated to contribute only a small percentage of global carbon emissions. But it can be a big
part of the solution. In addition to data- center optimization and other operational issues such
as teleworking, companies are now leveraging IT capabilities to facilitate sustainability
initiatives across the enterprise in new areas, including fleet management, paperless billing,
and construction and facility management, among others.
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6. “IT has a huge opportunity in terms of reducing its consumption and complexity and utilizing IT
assets more effectively to drive down the carbon footprint,” says Vijay Sankaran, Ford’s director
of infrastructure operations (The Economist , 2009).
To be sure, IT has already helped companies take their first steps towards energy conservation.
Simple measures, such as having lights or computers shut off automatically at set times, or
setting room temperatures to an automated schedule, bring significant savings. More complex
undertakings include the consolidation of data centers, upgrading to more energy-efficient
hardware and supporting teleworking initiatives. From the above argument, we can realize that
there are organizations or companies have started to understand the benefits of running or
managing IT-related power consumption. For instance, the cost of keep powering up PCs over
its life can exceed its real price, with over 70% of this cost coming from when the computer is
not being used (Sviokla and McGilloway, 2008).
There are a number of companies are expected to enter the Green operation field and working
to make a quantum leap of Green IT services market to an estimated US $4.5 billion by 2013
[Mines, 2008]. Therefore, working on new innovations in the field of green products and
services will have an efficient role in supporting companies and economies towards
environmental sustainability (e.g, Commission of the European Communities, 2001). For
instance in 2010 and 2011 video conferencing efforts an environmental savings of more than
87,500 metric tons of CO2 emissions.
1.4 Conclusion
Over the next few years, executives expect companies to maintain their focus on sustainability,
deploying more IT resources and establishing positions of accountability within their
organizations to ensure that they reach important milestones.
Therefore, as a business owner, you constantly try to find money-saving opportunities.
Sustainability provides the same issue; you can always find new ways to reduce costs and run a
green services or business. For instance, in IT industry being that your product specializes in
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7. some services that differentiate your brand in market place, by using a technology that put into
consideration the cost consumption, carbon consumption and energy consumption.
With sustainable operations, small businesses are offered many opportunities to stay
profitable, and the customer is that deciding factor. The client or customer wants to make the
choice of not causing any adverse effects when it comes to their dollars and cents, and this
drives them to the brand that can perform sustainability the best. The association of your
sustainability enterprise keeps you accountable with your customer base.
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Written by Yasser Al Mimar, 2014