Supercharge The IT Circular Economy With The CARFAX(R) Approach

The Challenge With The Circular Economy

In 2025, Forrester predicted that more than a third of Global Fortune 100 firms will commit to circular economy goals. We recommended that in 2025, enterprise leaders perform infrastructure lifecycle assessments to understand the environmental impact of their choices.

Further for manufacturing, Forrester report ‘Embrace The Circular Economy To Make Manufacturing More Sustainable’, describes five Rs which matter for manufacturers: reduce, reuse, repair, refurbish, and recycle. However, for IT, the circular economy practices are not without its challenges. Some of these key obstacles include:

• Enterprise Shifting habits towards more sustainable practices can be difficult.
• IP and Proprietary Ecosystems. Existing regulations around intellectual property may not always support circular practices and can sometimes incentivize waste.
• Economic Incentives. The initial investment for transitioning to circular models can be high, and the economic benefits may take time to materialize.
• Infrastructure Availability Gaps. Adequate technology infrastructure for recycling and reusing materials is not always available.

The challenges are magnified by rapid technological shifts, power demands, limited resources, and the increasing importance to nations, their business, and their citizens globally.

Firms need to identify whether they need to dispose (as with the linear economy), or recycle the asset and its components. Tech leaders must know the asset value within and outside the organization and it will be immensely helpful. This data is the key to making an informed decision and whether keeping or recycling the IT asset (and its components) is more valuable or sensible. However, this critical information is currently lacking and can drastically change the decisions made today.

The CARFAX® Approach

At Forrester, we propose gathering  information about IT assets and their service records, much like CARFAX® does for used vehicles. This does not address all the challenges of circular economy, but we believe it will assist in mitigating the impact of many of them. It will be that critical data in determining the value a used IT asset has in an open market. Some of the recent developments in this area has been the French Repairability Index. However, the CARFAX approach will address some of the challenges so far debated in this approach, such as:

1. Not relying on manufacturer self-assessment.
2. Wider scope – IT in the Data Center as well as IT in the workplace (end user devices)
3. Focus on both availability and affordability

How To Get This Information

This information needed to enable this approach is already available for many IT organizations: a CMDB or bill of materials that contain the information of IT assets, and service tickets for those IT assets.  Understanding if an IT asset is up to date with the latest firmware and patches, has had parts replaced, has had issues, or has been kept in an environment that is out of specification helps an organization understand the value of what they have: is the IT asset worth keeping? Is it better to recycle or dispose of it? Can you sell/auction it to recoup some capital?

Who Can Build This Dataset?

Who can execute this? An independent third party can help your organization by letting you know the market demand for those IT assets, the available supply, and its value. This information enables the tech leaders to make the right decision with their IT assets. Without the critical context of this data, organizations may not make optimal decisions on whether to retain, reuse, or dispose of IT assets. After all these decisions cost money, time, effort, and may face risks by using failure prone IT infrastructure.

This Is The Start

Parts of this approach is to have an independent entity involved. What that entity would look like – wholly private, non-profit, or a public entity are all open to debate as of this initial analysis.

There are parts of the CARFAX® approach that still need to be addressed:

• Need to handle sanctions and export controls between countries
• Transparency and trust with the entity
• Requires the entire ecosystem (organizations, server vendors, support providers etc.) for data sharing to enable this approach
• Dependence on the reported data (must be accurate, comprehensive, and up to date)