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Vendor selection: It pays to be green


Capgemini, Accenture and TCS are most likely to be judged rigorously on this issue with 21, 18 and 15 per cent of their respective customers using green criterion to select vendors.


Shamik Paul

Bangalore, July 13 IT companies that do not have a green strategy in place will soon turn green with envy. A study by Forrester Research has said customers are increasingly putting the green criterion for supplier selection at the top of their agenda.

About 12 per cent of respondents of a survey comprising IT services buyers are evaluating prospective supplier’s green policies during the selection process, the study revealed. The trend is expected to grow markedly in the coming years.

Green Criterion

Capgemini, Accenture and Tata Consultancy Services are most likely to be judged rigorously on this issue with 21, 18 and 15 per cent of their respective customers using green criterion to select vendors. For Infosys Technologies, the number is 9 per cent, while for Wipro Ltd 11 per cent.

Green criterion includes energy efficiency of products, use of sustainable materials and manufacturing techniques as well as whether products are recyclable. It also includes vendors’ commitment to sustainable operations such as policies on carbon emission reporting and employee commuting practices.

Interestingly, the IT vendors can also increase the revenue they earn from selling green products or services.

Green IT projects

While green IT projects were not at the top of the list of likely projects for services providers, about 32 per cent of nearly 950 IT service buyers polled said green IT strategy or implementation projects were on their list, Forrester said.

Vendors such as Accenture, TCS, and KPMG have the highest percentage of their current client base, 40 per cent or more in each case, that are planning to hire a service provider for green IT projects in 2009.

About 42 per cent of TCS’ customers, 33 per cent of Wipro’s clients and 26 per cent of Infosys’ customers are expected to hire IT vendors for green projects.

Forrester said most vendors have at least one-quarter of their existing customers planning green IT engagements. This indicates that there are substantial opportunities where the service providers are already the primary provider of IT services to a customer, even though there is a decline in overall IT spend projected for 2009.

Major IT service providers are building and bringing to market practices focused on helping clients put green IT policies and programmes into place. Forrester expects that the global market for such green IT services will grow by 60 per cent a year over the coming years, peaking at $4.8 billion in user spending in 2013.

It is important that service providers offer cost savings and tangible return on investments. Also, the green IT services must complement the client’s overall corporate sustainability strategy, Forrester added.

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