Energy Prices Harm IT

As if that’s not bad enough, rising energy and oil prices appear to be having a wide-ranging impact on IT in the United States. Many technology execs are being forced to react to fluctuating energy and oil prices by re-evaluating the power consumption and storage capabilities of their data centers, more closely monitoring the pricing of oil-dependent products or employing more Web 2.0 technologies to offset higher airfares.

Steve Canter is one such exec. As CIO of Chicago-based Berlin Packaging, a $1 billion-a-year designer and manufacturer of bottles, jars and other types of product containers, Canter was charged with helping the company get a handle on overseas energy and oil price fluctuations, which reverberate throughout Berlin’s business. Because of its dependence on petroleum-based plastics, the company was watching rising oil costs eat into its gross margins. To help counter that trend, Canter’s staff built an internal application that tracks energy and oil prices and then recalculates pricing on Berlin’s catalog of tens of thousands of products—often on a monthly basis—in order to preserve its margins.

Canter chose to build the application in-house for a couple of reasons. First, it was unlikely Berlin would be able to find an off-the-shelf option for an app that’s so specific to the container industry. In addition, the software required tight integration with the company’s PeopleSoft enterprise resource planning system, so a substantial integration project would have been required.

As it turned out, Berlin possessed all the tools it needed for development, so there were no hard costs. Canter estimates that the team of IT folks and business users who collaborated devoted about 1,000 hours to the effort. He adds that it would have required three or four full-time employees to stay on top of oil price fluctuations manually.

Even the Peace Corps has been affected by rising oil prices and the falling dollar, which have inflated everything from airfares to food prices. The organization needs to ensure that it can effectively reach out to volunteers around the world, so CIO Ed Anderson began looking for IT alternatives that would preserve the mission while saving on travel costs.

His answer? More use of collaborative Web 2.0 tools, such as knowledge management, information sharing and social networking sites. Instead of having staff members visit a remote region of Africa in search of a local agricultural expert, the Peace Corps employs Cisco Systems’ WebEx service to get word out to contacts around the globe, essentially conducting international searches without ever leaving home.

The U.S. agency that exports American volunteers to third-world nations also is looking at various ways to use social networking sites like MySpace and Facebook, rather than recruitment trips, to reach the 20-somethings that make up the lion’s share of potential volunteers. “In the last 24 to 30 months, we’ve had to get much more creative,” Anderson says. “If you can’t travel, or your travel’s being restricted, you have to find the next best way.”