MBIS5013 Sustainability and Enterprise 4.0 Report 3 Sample
In this assessment, you will work in group and form a group of 4 members by week 1. Select an IT-based organisation as a client to investigate their problems. Once the problems are identified, propose solutions and strategies using sustainable IS-related technological integrations that will provide the necessary digital transformations for the organisation to adopt an Enterprise 4.0 enabled business model. You are expected to apply relevant concepts and theories learned in this unit, and a minimum of 12 scholarly journal articles must be used in the group report.
You are encouraged to attend a workshop on Referencing and Research Practice organised by the Academic Success Team (AST). You may also schedule a one-on-one workshop with the AST by emailing academicsuccess@aih.nsw.edu.au.
You must submit your own work and use appropriate references in APA style where needed
• Only one student from your group must submit the report through the Assessment 3 Turnitin link on the unit’s Moodle page. The similarity index of the report should not be more than 20%
• Text of the report can be prepared with essay writing AI (Artificial Intelligence) technology like service including referencing in the style you prefer. Try some of them: https://essaygenius.ai/, https://www.essaytyper.com/ or
https://www.essaybot.com/. After you receive AI generated text, you should read it and improve it according to assessment requirements and rubric. Please carefully read the document AI and Plagiarism, provided on Moodle, for more information.
Solution
Introduction
Sustainability has emerged as a vital framework for the IT business in the 21st century, enhancing the basic need to balance economic growth, social equity, and environmental stewardship. The key aspect of sustainability signifying social responsibility, environmental protection, and economic viability, is collectively known as the triple bottom line. This approach encourages organizations to adopt practices that contribute to their bottom line and it positively affects the natural environment.
Enterprise 4.0 represents a transformative shift for the organizations that operate to integrate advanced technologies such as artificial intelligence, big data, and IoT into their business models. All the transformation enables businesses to develop operational efficiency, innovate product offerings, and improve customer engagement to ensure sustainability (Datacenterdynamics 2024). IT businesses for university assignment help can optimize resource use, decrease waste, and promote ethical practices to align their operational strategies with sustainability goals. This report examines these concepts and highlights the importance of adopting sustainable business practices in the field of enterprise 4.0 with a focus on Microsoft, a leading IT firm.
Trends and Challenges Impacting Businesses and Information Systems
The rapid involvement of data-driven technologies such as cloud computing, artificial intelligence and the Internet of Things has accelerated energy consumption within the data centers that form the main backbone of the modern IT infrastructure. Microsoft is one of the leading tech giants and is heavily invested in operating data centers worldwide to support its Azure cloud platform and other effective services (Taherdoost, 2023). These data centers are responsible for an effective environmental effect that has driven the company to adopt different sustainability initiatives.
Key Trend: Rising Energy Demand for Data Centers
One of the most important trends that affect Microsoft's data centers is rapidly increasing the core demand for energy. As AI becomes more integrated into the proper business and other personal applications, the main strain on computing resources continuously grows. According to the global report, data centers already accounted for around 1% to 1.5% of the global electricity consumption in 2022, with estimates suggesting that it could rise around 160% by the year 2030 due to AI and cloud computing expansion (Naim, 2021). Microsoft heavily promotes AI servers via Azure and other cloud-based products, with this trend posing a vital sustainability issue. According to the "International Energy Agency," it is also found out that data center emissions rise correspondingly unless tech companies such as Microsoft manage their energy usage from fossil fuels (Statista, 2024).
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Figure 1: Microsoft's global brand value
(Source: Statista, 2024)
According to Microsoft's brand value, around $713 billion in the year 2023 marking a 42% growth from the past year's data. The most significant increase highlights Microsoft's dominance in the global tech industry, and it is driven by its hardware, expansive software, and other service offerings (Pearlson et al. 2024). As a major contributor to Microsoft's brand strength and its robust data center infrastructure, it is the most vital factor in powering its cloud services, and enterprise applications and AI solutions. Moreover, the increasing energy demands of these data centers, specifically in the wake of AI advancements raised sustainability concerns. Data centers require immense power and the effect is becoming a vital issue for Microsoft. Microsoft aims to operate its data centers on 100% renewable energy around 2030 through its 100/100/0 strategy and focuses on running entirely on carbon-free energy (Datacenters. Microsoft 2024). This commitment to sustainability addresses environmental issues and strengthens Microsoft as a global leader in corporate responsibility.
Challenges: Environmental Impact of Microsoft’s Data Centers
Microsoft's data centers play a vital role in its global operations and support cloud services such as artificial intelligence, Azure, enterprise, and AI applications. Moreover, the exponential growth of these data centers has increased effective environmental concerns, as they consume a wide amount of energy and contribute to rising carbon emissions (Laato et al. 2023). As the main demand for cloud computing and other technologies surges, these centers become an effective issue for Microsoft. The major challenge is the energy consumption that is required to handle, cool, and power the wide infrastructure of the data centers. IEA data centers account for 1-1.5% of the world's electricity consumption and it is expected to increase substantially with the rising use of AI. AI applications such as Azure openAI and other energy-intensive services. Another sustainability issue that Microsoft's data centers have is water usage (Datacenters. Microsoft 2024). The Data centers generate a significant amount of the operation and it requires an effective cooling system to function properly.
Moreover, this cooling process is achieved by using air conditioning or water-based cooling systems. Water-based cooling methods consume huge amounts of water and it contributes to the local water scarcity in several regions. Microsoft's data centers are vital for cloud services such as Azure which have huge environmental effects due to the high energy consumption (Zadeh et al. 2020). A present Azure outage in July 2024 highlights the scale of these centers to cause a disruption. Data centers demand vast energy resources, and AI applications intensify their usage.
Impact
Environmental Impact of Water Usage
Water usage in Microsoft's data centers is a vital environmental challenge. The cooling system is important to handle the heat produced during the operations and it necessitates huge quantities of water thereby potentially leading to local water scarcity. This issue is particularly severe in arid regions and it is already grappling with limited water resources (Archana et al. 2022). The intense demand for cooling water can affect the local ecosystems results in negative impacts on biodiversity and disrupts the natural balance. Moreover, it creates tensions within other communities that properly depend on these water suppliers for livelihoods (Al-Marsy et al. 2021). As global awareness of conservation grows, Microsoft faces increased scrutiny from environmental advocates that could be more complicated in its global operations to elevate cost mitigation measures.
Operational Failures and Service Reliability
In the year 2024, the Azure outage exemplifies the disruptions thereby raising the operational failures within Microsoft's data centers. Such incidents have far-reaching consequences that affect different sectors including transportation, banking, and healthcare that rely on cloud services for day-to-day operations. The resultant downtime erodes customer trust and exposes vulnerabilities within Microsoft's infrastructure (Alt et al. 2020). These outages showcase the urgent need for robust backup and effective resource management processes to develop service reliability.
Increased Operational Costs
As Microsoft seeks to measure the environmental effects associated with its global data centers, it encounters rising operational costs that are linked to implementing suitable practices with evolving regulations (Nanduri et al. 2020). Efforts to decrease water usage and develop energy efficiency often require a significant investment in advanced technologies and other infrastructure upgrades.
Solutions and Strategies for Sustainable IS-Related Technological Integration in Enterprise 4.0
Application of theories
Sustainable Business Model for Innovation
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Table 1: Sustainable Business Model Innovation
(Source: Self-created)
Information Systems Theory: Digital Transformation and Enterprise 4.0
The main concept of Enterprise 4.0 represents a transformative shift in Microsoft's leveraged digital technologies to develop its global operations and major sustainability efforts. This theory enhances the integration of the IoT, big data, and AI into business processes (Manganelli et al. 2021). Microsoft adopted the Enterprise 4.0-enabled business model that develops Azure cloud services to optimize data management and develop operational efficiency to decrease environmental effects.
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Figure 2: Information system theory
(Source:
Through smart sensors and IoT devices in its data centers, Microsoft can easily monitor energy consumption and optimize resources in real time, which can help to reduce energy usage and carbon emissions (Gupta et al. 2021). The use of big data analytics leads Microsoft to gain insights into customer preferences and other operational performance. The integration of information systems and business model innovation helps ensure relevance in an increasingly eco-conscious marketplace by optimizing operations.
Evaluating and Reflecting on Different Perspectives to Support Changes in IT-Based Organisations
The Pro-REC and Market-Based Accounting Perspective
One of the most common beliefs that some of the stakeholders have is market-based accounting using Renewable Energy Certificates (RECs). The RECs enable organisations to declare that they are using renewable power by navigating RECs from renewable power producers (Gawusu et al. 2022). In Microsoft’s case, RECs complement the company’s globalisation of large data centres. This makes it seem greener on the outside. As per the perspective, REC is an essential component during sustainable energy transition. The market-based accounting helps to take credit for renewable energy investment. Through REC, companies like Microsoft can adopt sustainable energy solutions and grow in their respective sectors.
The Criticism of RECs and the Case for Location-Based Accounting
Environmental enthusiasts and sustainability professionals counter the sceptics by proposing a radical move towards location-based accounting. Location-based accounting presents a tangible picture of an organisation’s carbon footprint. Location-based accounting factors emissions by the energy mix in the local grid to provide visibility of the carbon intensity of operations (Martinez-Valencia et al. 2021). There is a significant difference between Microsoft’s market-based and actual emissions using location-based accounting. Official scope 2 emissions by the companies in 2022 were more than 280,000 metric tons of CO2 equivalent using market-based calculations. The location-based emissions of a similar year stood at slightly over 6 million metric tons of CO2 equivalent showing a big disparity between the two categories (theguardian, 2024).
The Technological and Operational Perspective: AI and Cloud Computing Challenges
A third narrative centres on the practical and technical issues when IT-based organisations adopt Enterprise 4.0. AI, machine learning, and cloud computing are among the technologies that are revolutionising approaches. These approaches bring efficiency, scalability, and creativity benefits. However, these technologies also require computation, resulting in higher power usage and a higher environmental load (Gill et al. 2022).
The Azure cloud of Microsoft shows notable emissions. After mitigating the workloads of the cloud, data centres demand their capacity to grow and energy burden amplification. To deal with the situation, data centres should invest in their sustainability approach and develop more energy-efficient technologies.
Recommendations
Integration in Enterprise 4.0
The adoption of sustainable Information Systems (IS) is important in managing environmental effects. During the transition to an Enterprise 4.0 business model by huge corporations like Microsoft, the information system provides various advantages. It proposes a transition that has technological enablers including AI, cloud computing and big data as potential sources of value but also leads to energy demand and carbon emission (Akyurt et al. 2020). To counter these effects, organisations like Microsoft need to adapt diligently to meet the usual envisioned digital change programmes. The following are solutions and strategies aimed at the integration of sustainability into the Enterprise 4.0 framework.
a. Adoption of Energy-Efficient Technologies
Today’s data facilities are crucial to businesses’ digital initiatives but at the same time are the biggest polluters. As per the Sustainable Business Model, one of the most effective solutions is the use of energy-efficient technologies regarding energy efficiency. The technologies are used for functioning data centres, which may considerably decrease an unfavourable influence on the natural environment.
AI for Energy Optimization: The application of artificial intelligence to the algorithms that help regulate the power consumption of data centres will result in a decrease in power consumption without affecting performance (Katal et al. 2023). AI can predict how much work the server will have to accomplish, regulate the cooling system and allocate resources much better. Google for instance has applied AI to cut cooling energy use in its data centres by up to 30%. Microsoft can develop similar solutions with AI, enabling maximal productivity of its data centres with the simultaneous optimization of energy consumption.
Liquid Cooling Systems: Conventional air-cooled cooling systems consume more electrical energy. It is recommended to implement liquid cooling systems, which provide higher heat dissipation and lower energy use in data centres. Microsoft can adopt liquid cooling at its data centres and power the cooling through water thus cutting down power consumed in conventional cooling (Haghshenas et al. 2023).
b. Integration of Renewable Energy Sources
Energy-efficient technology can reduce environmental impact but using renewable energy sources also provides long-term sustainability (Lu et al. 2020). To improve the overall sustainable impact Microsoft needs to utilise renewable energy sources. Microsoft has already decided to develop 100% renewable energy by the end of the year 2025. The integration of renewable energy sources can enhance the overall credentials of the company and maintain sustainability factors (theguardian, 2023).
Power Purchase Agreements (PPAs): Microsoft should go on doing PPA and continue to use it where it has not done so. It provides an opportunity for the company to fund large-scale projects in the renewable energy industry ranging from wind power or solar stations (Chang & Lo, 2022). These agreements help the organisation meet its renewable energy needs to support data centres and facilitate the technological development of the requisite infrastructure.
On-Site Renewable Energy Generation: However, apart from PPAs, Microsoft can commission on-site renewable energy systems like solar photovoltaic or wind power at its data centre regions (Rostirolla et al. 2022). They can provide clean power to Microsoft’s activities and enable the reduction of reliance on grid electricity where carbon content is high. This also sits well with the location-based carbon accounting strategy, which makes sure that the emission disclosures are credible.
c. Utilisation of Circular Economy Principles
The environmental impact of the data centre equipment and hardware needs to be maintained by the circular economy principle (Demestichas & Daskalakis, 2020). Different principles integration into procurement, manufacturing and disposal processes help Microsoft to gain their target without having drawbacks.
Sustainable Procurement: The company can practise sustainable procurement by procuring equipment for the data centres like energy efficient, durable and recyclable hardware. This involves sourcing from suppliers who have made it their goal to reduce their impacts on the environment and those who use sustainable production materials (Klein et al. 2020). Such a strategy would decrease the overall scope 3 emissions linked to manufacturing and supply chains hence enhancing a sustainable hardware ecosystem.
Equipment Refurbishment and Recycling: Instead of normally discarding end-of-life or damaged equipment, Microsoft can come up with programmes to renovate the part or hardware. Also, the end-of-life hardware equipment should be recycled to reduce the e-waste. At the same time, to recover recyclable metals such as silver and gold, this process can be utilised. Collaborating with recycling companies or developing its collection programs will help Microsoft decrease environmental impact.
d. Decarbonizing Third-Party Cloud Contracts
In Microsoft, scope 3 emission the third-party data centre also contributes significantly. At the time Microsoft wanted to achieve a meaningful reduction in its carbon footprint collaboration with third parties needed to be done. Effective collaboration with the third party also needs to be done to maintain their sustainable practices. By collaborating with the third-party cloud provider, renewable investment and sustainable auditing can provide a more effective outcome (Chang & Lo, 2022).
Shared Renewable Energy Investments: Microsoft can enter a joint venture with third-party data centre providers for investment in renewable energy sources. Combined efforts in resource mobilisation also mean that Microsoft and its partners can work towards replacing energy from traditional sources in all data centres, narrowing down the emissions in the whole cloud system.
Sustainability Audits and Reporting: To promote transparency, Microsoft should insist on the third cloud, the operators which host the company’s applications, and submit sustainability inspections (Katal et al. 2023). These audits would help to affirm that these operators are adopting the use of renewable energy in their production. Besides, these insights can also be applied by Microsoft to location-based scope 3 emissions reporting to enhance sustainability performance.
e. Implementing Green Software Engineering Practices
The hardware and energy utilisation can be more sustainable if Microsoft focuses on reducing its carbon impact on services and software products. By implementing green software engineering practices, the aim can be fulfilled effectively.
Energy-Efficient Coding: With code and architectural improvements to Microsoft’s software services (Azure, Office 365, etc.), the company can lower the amount of computing needed to run these apps. Efficient coding style should also apply to the AI workloads and the efficient algorithms can decrease power consumption in the training and inference processes (Gill et al. 2022).
Sustainable Cloud Service Offerings: Microsoft can provide customers with green cloud choices where the workloads can be run on renewable energy or high-efficiency servers. It can also make customers aware of their reduced carbon emission impacts when they are using the services of Microsoft further supporting the company’s sustainability agenda.
Conclusion
It can be concluded that Microsoft's integration of sustainability practices within its Enterprise 4.0 framework exemplifies the organization's commitment to balancing advanced technologies such as AI, IoT, and big data. Microsoft enhances operational efficiency to address critical issues related to energy consumption and water usage in its global data centres. Microsoft's cloud services reflect an effective commitment to sustainability that positions the company as the global leader in CSR. Microsoft must adopt long-term IS-related technological enablers to support the safety and shift towards an Enterprise 4.0-enabled business model. The resource can contribute to the solution of the problems related to data centres’ environment by gradually introducing energy-efficient technologies and incorporating non-traditional sources of energy to functioning. Along with this application of the principles of circular economy, it is essential to decarbonise the third-party cloud contracts when creating applications and use opportunities of green software engineering. These strategies will help Microsoft to sustain the digitization initiatives in the organisation while the rest of IT-based organisations will need to start following the same.
References
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