Triple Bottom Line can boost profitability without harming our planet
Sustainability, Corporate Responsibility, Climate Action, and Digital Inclusion are buzzwords that are gaining traction not only in Washington, D.C., but also in the minds of corporate executives. As business leaders attempt to navigate the complexities of today's world, they are confronted with decisions concerning the long-term future of our global society - how can we effect societal change and increase profitability without harming our planet?
The Triple Bottom Line concept was first introduced to me during my MBA studies at the Kelley School of Business. This is a simple yet powerful tool that expands the traditional view of a company's success into three dimensions: people, profit, and the environment. This framework enables us to evaluate the impact of our decisions beyond economic profit (the most common business metric) and make better business decisions that result in better outcomes. Since learning about this concept, I've been thinking about technology investments in a new light, one that can benefit people and the environment while also making money for those who invest.
Let us unpack the triple Bottom Line for those who are unfamiliar with it:
Profitability: Let's be honest, businesses exist to make money. It is the driving force that motivates investors, shareholders, employees, and business leaders. The more profitable a company is, the better it is perceived to be. Profit has been a key performance metric since the dawn of time, yielding financial decision metrics for managers such as Net Present Value (NPV) and Internal Rate of Return (IRR) (IRR).
People: Many of today's businesses do not just focus on economic profit; they also have an active program to benefit those they employ, the local community, or even humanity as a whole. According to Harvard Business School's Matt Gavin[1], there are four strategies that businesses can implement, which include promoting ethical business practices[2, partnering with non-profit organizations, encouraging employee volunteering, and inspiring action through their corporate voice.
Planet: The third leg of the triple bottom line is driven by a desire to have a positive impact on the environment. This is where businesses focus on sustainability goals such as lowering CO2 emissions, switching to renewable energy sources, sourcing materials from renewable and responsible sources, participating in an e-waste program, or lowering pollutant output into the environment.
All of this is fantastic, but how will 5G advance each of these components? Consider a typical 5G Indoor deployment within an office building and evaluate it using the TBL Framework.
With the rise of Bring Your Own Device (BYOD), office environments are increasingly in need of coverage solutions that can support multiple network operators. These are known as Multi-Operator (MO) or Neutral Host systems (NH). The following are the primary options for providing this type of 5G service in an office setting:
Outdoor To Indoor:
CSPs use their existing outdoor public network to reach 5G consumers indoors with this approach. Where this approach works, it will be the preferred option for CSPs seeking to maximize low- and mid-band coverage while minimizing capital expenditure. This approach has been widely used with previous Gs, but the long-term benefit is unknown, particularly as we move closer to 6G[6] and high-band (mmWave) 5G deployments.
For the time being, I will assume that enterprises that choose this model do not truly want to incorporate 5G into their Digital Transformation agenda or provide 5G services to their tenants or employees. As a result, the impact on the TBL enterprises is nil - there is no real benefit, no real cost, no tangible profit, and no net effect on their sustainability agendas. Their competitors have the same option, which means they have no competitive advantage. Overall, one could argue that this is not a good strategy for a business operating in a competitive environment.
Active-Distributed Antenna Systems (A-DAS): For decades, building owners, CSPs, and REITs have installed shared antenna systems throughout their properties. These systems are largely technology agnostic, allowing CSPs to deploy network assets directly inside the building. Historically, doing so has resulted in an economically viable solution for larger spaces, albeit at the expense of complexity and inflexibility. This is frequently the most expensive option.
Uncoordinated Small Cells: Previous G's have had some success with indoor small cell deployment. These solutions, known as Femtocells, provide standalone - all-in-one devices similar to WiFi Access Points. This low-power, low-capacity device can be placed in buildings where coverage is required and connects to the internet or a CSP's cell site router via standard enterprise structure cabling. They are usually inexpensive (similar to WiFi) and have limited capabilities. They do not scale well for larger deployments, but they do provide a low-cost option for smaller buildings.
Distributed Radio Systems: A-DAS and Femtocell architectures are combined in Distributed Radio Systems. They provide a good balance of flexibility and scalability while avoiding the drawbacks of DAS and Femtocells. They can use enterprise structured cabling for both data and power, as well as enable support for outdoor macro network features and functions.
Based on these architectural options, a CTO, Building Manager, or IT manager may simply choose the cheapest solution that meets their technical needs among Distributed Radio, DAS, and Small Cells. We can choose between Distributed Radio and A-DAS architectures in most larger buildings.
When we compare the designs of A-DAS and Distributed Radio System, we notice significant differences. Not only in terms of the simplicity of DRS over A-DAS, but also in terms of 5G feature sets and power consumption.
An A-DAS approach consumed 12,475W in an office building recently evaluated by Ericsson's Indoor Product team, whereas a DRS approach (using Ericsson RDS consumed only 3,811W. This equates to a power savings of 8,664W, or 70%! This energy savings is due to a combination of the DRS system's implementation efficiency and the lower hardware requirements compared to an A-DAS solution. One can also see how requiring less hardware reduces the solution's carbon footprint by requiring less manufacturing.
Such energy savings directly contribute to a company's "Planet" objectives while also lowering TCO (Total Cost of Ownership) for "Profit" objectives. Given the current state of energy uncertainty, this cannot be overlooked. Obviously, the exact amount of energy saved will differ from building to building, but it is not insignificant.
This impact of the architectural choice can be directly mapped to the TBL framework:
Planet: RDS saves 75,896 kWh per year, which equates to a reduction of 53.8 Metric Tons of CO2.
Profit: In addition to cost savings over A-DAS solutions, RDS provides an annual energy savings of 75,896 kWh. At a 5-year TCO of $50,395 and an average rate of 13.28 cents per kWh, this saves $10,079 per year. This type of savings protects a company's investment from the current effects of energy uncertainty.
People: Enterprises that are experiencing significant sustainability savings can use their platform to encourage others to do the same - they are "Bright Spots" and should be used as role models, according to Chip and Dan Heath[11]. We can actively contribute to the vision of Net-Zero by 2050[12] if we all adopt a sustainability mindset and evangelize our success stories. Furthermore, RDS brings 5G capabilities to the enterprise, facilitating an environment that benefits the company, its customers, and its employees.
The Triple Bottom Line is a useful tool for determining the impact of 5G on your business. By expanding the analysis of solution sets beyond economic profit, it is possible to make compelling cases for the benefit of shareholders, the community, and the planet.
My hope is that companies looking to invest in 5G Digital Transformation strategies will use this framework to improve business and societal outcomes.
The Triple Bottom Line concept was first introduced to me during my MBA studies at the Kelley School of Business. This is a simple yet powerful tool that expands the traditional view of a company's success into three dimensions: people, profit, and the environment. This framework enables us to evaluate the impact of our decisions beyond economic profit (the most common business metric) and make better business decisions that result in better outcomes. Since learning about this concept, I've been thinking about technology investments in a new light, one that can benefit people and the environment while also making money for those who invest.
Let us unpack the triple Bottom Line for those who are unfamiliar with it:
Profitability: Let's be honest, businesses exist to make money. It is the driving force that motivates investors, shareholders, employees, and business leaders. The more profitable a company is, the better it is perceived to be. Profit has been a key performance metric since the dawn of time, yielding financial decision metrics for managers such as Net Present Value (NPV) and Internal Rate of Return (IRR) (IRR).
People: Many of today's businesses do not just focus on economic profit; they also have an active program to benefit those they employ, the local community, or even humanity as a whole. According to Harvard Business School's Matt Gavin[1], there are four strategies that businesses can implement, which include promoting ethical business practices[2, partnering with non-profit organizations, encouraging employee volunteering, and inspiring action through their corporate voice.
Planet: The third leg of the triple bottom line is driven by a desire to have a positive impact on the environment. This is where businesses focus on sustainability goals such as lowering CO2 emissions, switching to renewable energy sources, sourcing materials from renewable and responsible sources, participating in an e-waste program, or lowering pollutant output into the environment.
All of this is fantastic, but how will 5G advance each of these components? Consider a typical 5G Indoor deployment within an office building and evaluate it using the TBL Framework.
With the rise of Bring Your Own Device (BYOD), office environments are increasingly in need of coverage solutions that can support multiple network operators. These are known as Multi-Operator (MO) or Neutral Host systems (NH). The following are the primary options for providing this type of 5G service in an office setting:
Outdoor To Indoor:
CSPs use their existing outdoor public network to reach 5G consumers indoors with this approach. Where this approach works, it will be the preferred option for CSPs seeking to maximize low- and mid-band coverage while minimizing capital expenditure. This approach has been widely used with previous Gs, but the long-term benefit is unknown, particularly as we move closer to 6G[6] and high-band (mmWave) 5G deployments.
For the time being, I will assume that enterprises that choose this model do not truly want to incorporate 5G into their Digital Transformation agenda or provide 5G services to their tenants or employees. As a result, the impact on the TBL enterprises is nil - there is no real benefit, no real cost, no tangible profit, and no net effect on their sustainability agendas. Their competitors have the same option, which means they have no competitive advantage. Overall, one could argue that this is not a good strategy for a business operating in a competitive environment.
Active-Distributed Antenna Systems (A-DAS): For decades, building owners, CSPs, and REITs have installed shared antenna systems throughout their properties. These systems are largely technology agnostic, allowing CSPs to deploy network assets directly inside the building. Historically, doing so has resulted in an economically viable solution for larger spaces, albeit at the expense of complexity and inflexibility. This is frequently the most expensive option.
Uncoordinated Small Cells: Previous G's have had some success with indoor small cell deployment. These solutions, known as Femtocells, provide standalone - all-in-one devices similar to WiFi Access Points. This low-power, low-capacity device can be placed in buildings where coverage is required and connects to the internet or a CSP's cell site router via standard enterprise structure cabling. They are usually inexpensive (similar to WiFi) and have limited capabilities. They do not scale well for larger deployments, but they do provide a low-cost option for smaller buildings.
Distributed Radio Systems: A-DAS and Femtocell architectures are combined in Distributed Radio Systems. They provide a good balance of flexibility and scalability while avoiding the drawbacks of DAS and Femtocells. They can use enterprise structured cabling for both data and power, as well as enable support for outdoor macro network features and functions.
Based on these architectural options, a CTO, Building Manager, or IT manager may simply choose the cheapest solution that meets their technical needs among Distributed Radio, DAS, and Small Cells. We can choose between Distributed Radio and A-DAS architectures in most larger buildings.
When we compare the designs of A-DAS and Distributed Radio System, we notice significant differences. Not only in terms of the simplicity of DRS over A-DAS, but also in terms of 5G feature sets and power consumption.
An A-DAS approach consumed 12,475W in an office building recently evaluated by Ericsson's Indoor Product team, whereas a DRS approach (using Ericsson RDS consumed only 3,811W. This equates to a power savings of 8,664W, or 70%! This energy savings is due to a combination of the DRS system's implementation efficiency and the lower hardware requirements compared to an A-DAS solution. One can also see how requiring less hardware reduces the solution's carbon footprint by requiring less manufacturing.
Such energy savings directly contribute to a company's "Planet" objectives while also lowering TCO (Total Cost of Ownership) for "Profit" objectives. Given the current state of energy uncertainty, this cannot be overlooked. Obviously, the exact amount of energy saved will differ from building to building, but it is not insignificant.
This impact of the architectural choice can be directly mapped to the TBL framework:
Planet: RDS saves 75,896 kWh per year, which equates to a reduction of 53.8 Metric Tons of CO2.
Profit: In addition to cost savings over A-DAS solutions, RDS provides an annual energy savings of 75,896 kWh. At a 5-year TCO of $50,395 and an average rate of 13.28 cents per kWh, this saves $10,079 per year. This type of savings protects a company's investment from the current effects of energy uncertainty.
People: Enterprises that are experiencing significant sustainability savings can use their platform to encourage others to do the same - they are "Bright Spots" and should be used as role models, according to Chip and Dan Heath[11]. We can actively contribute to the vision of Net-Zero by 2050[12] if we all adopt a sustainability mindset and evangelize our success stories. Furthermore, RDS brings 5G capabilities to the enterprise, facilitating an environment that benefits the company, its customers, and its employees.
The Triple Bottom Line is a useful tool for determining the impact of 5G on your business. By expanding the analysis of solution sets beyond economic profit, it is possible to make compelling cases for the benefit of shareholders, the community, and the planet.
My hope is that companies looking to invest in 5G Digital Transformation strategies will use this framework to improve business and societal outcomes.
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