The Department of Work and Pensions’ (DWP) IT upgrade will save £1.5bn by the end of 2010.

Server consolidation and a refresh of all laptops and desktops will be major contributors to the cost savings, which will also deliver annual power savings of 50 GigaWatt hours.

Frank Tudor, director of supplier relationship and performance management at the DWP, said the IT refresh, which began in 2005, became increasingly about saving energy.

“The primary driver was a necessary refresh -­ the green agenda came in later in the programme, but it has become vital for the organisation,” he said.

The DWP has transferred its entire infrastructure to supplier EDS as part of a managed hosting deal paid for on a per-user per-month basis. This utility model drives energy-efficiency incentives for EDS.

More than 140,000 laptops and desktops have been replaced with more energy-efficient models, 25,000 machines have been scrapped, and 2,500 servers in six datacentres consolidated to 40 servers in two locations.

DWP’s call centre ­- one of the largest in Europe ­- has been moved to an IP-based network.

Software from supplier 1E is used to switch off all PCs at evenings and weekends, and a management system is used to put printers into sleep mode.

“We have used sustainability and cost-savings to drive through improvement,” said Tudor.

But organisations should be wary of overplaying the environmental aspects of more efficient IT systems, said Gartner analyst Mark Raskino.

“A tendency to directly equate green IT issues with lean IT will lead to deceptive short-term progress, and we believe it will equally often lead to longer-term pain,” he said.