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Nigel Melville
  Nigel Melville

Green Business Value of Information Technology

8/18/2008 --

It is widely known that information technology (IT) has the capacity to contribute to economic performance in a firm. But a new research agenda, developed by the Ross School's Nigel Melville, is exploring ways in which IT also can contribute to environmental performance across the globe. Melville, an assistant professor of business information technology at Ross, is an expert on information technology innovation and organizational performance. He is a special sworn status researcher of the U.S. Census Bureau at the Michigan Research Data Center. His work has been published in such leading journals as Information Systems Research and MIS Quarterly. In the following Q&A, Melville talks about his new research agenda and the link between information systems and environmental sustainability.

What are you thinking about?
The green business value of IT, meaning, how information systems can contribute to environmentally sustainable business practices. I'm extending IT business value research to broaden the definition of "value" to include environmental sustainability.

Why is it interesting to you?
The issues of global climate change and energy scarcity increasingly are influencing corporate strategy. These issues present an opportunity for firms to exercise a competitive advantage and challenge the status quo. Many companies have adopted a sustainability strategy to capitalize on public interest in the environment, to gain a competitive advantage in the marketplace, and to be viewed as leaders in this emerging area. External pressure in the form of regulation is also a factor, such as the European Union's target to reduce greenhouse gas emissions by 20 percent and increase renewable energy use by 20 percent by the year 2020.

Researchers have examined such questions as the economic and environmental performance impacts of environmental management programs. However, the role of information systems has not yet been a focus of research. IT has the potential to rationalize sustainable business practices such as energy monitoring (automation); centralize and distribute pertinent information within and beyond the organization as needed (informatization); and enable entirely new sustainable business models (transformation). For example, one of the things the information systems industry does best—collect and present information—is exactly what's needed in the expanding realm of energy management.

A recent econometric study by Joachim Schleich and Edelgard Gruber indicates that lack of information about energy consumption patterns is a leading barrier to the diffusion of energy-efficient organizational practices. One example is the ZigBee communication standard, which enables power consumption data to be transferred wirelessly using specialized routers powered by watch batteries. Another example is Web 2.0 technologies, such as wikis, that foster collaboration and innovation. Wikis present interesting opportunities to rapidly develop effective new energy management practices within organizations. I have a working paper in preparation for submission that develops a research agenda on information systems and environmental sustainability. I also started a blog at on the topic, as this seemed like an ideal way to share materials and findings as the research progresses.

What implications do you see for industry?
Businesses are gearing up to address the immense challenges of energy scarcity and global warming. Information technology will play a crucial role. However, emerging standards and technological complexity will challenge firms to make prudent investments that fit their particular organizational circumstances. There is much to be done, and scholars can play an important role in developing new knowledge that helps managers to innovate effectively in the area of IT and environmental sustainability.

For more information, contact:
Bernie DeGroat, (734) 936-1015 or 647-1847,