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Managing IT assets

Most part of the IT investment of an organization goes under used or is spent on unnecessary equipments and solutions. To combat this problem adoption of IT asset management would be a good decision

Technology and operations management play a key role in realizing ROI (Return on Investment). Despite the economic slowdown companies have made substantial invest-ments in IT infrastructure. This confirms that business depends a lot on IT.

A recent Gartner survey says that Indian corporates plan to invest 2.2 percent of its revenue into IT infrastructure. This is a very promising figure and the IT heads should be able to justify the huge sum that will be allocated to their department. A significant way to accomplish that will be to optimally use the existing IT assets and infrastructure.

An IT asset includes all the hardware and software items including PCs, servers, network devices, accessories, software licenses, updates, and in-house developed software. Details like the vendors, suppliers, purchase cost, maintenance contracts, and configuration details can also be considered assets.

How best are these assets serving the needs of knowledge workers and customers, and adding value to the business? IT Heads will surely have to proactively manage distributed IT resources and minimize TCO. A big question is how?

Cost of operations
Broadly, cost of operations is a factor that includes multiple processes like initial cost of equipment, software and updates, manpower, equipment rental costs, equipment service and maintenance, and recurring costs of IT systems. The optimum use and usage tracking of IT assets has a profound impact on cost of IT operation. This makes asset management important, especially in case of multiple locations and heterogeneous IT systems. To my surprise most Indian corporates consider IT asset management practices secondary. It's not a part of the overall growth strategy.

My company has recently
developed and implemented a Web-based enterprise-wide asset management package as a part of our enterprise systems management initiatives. During this process I have made a number of observations about IT asset management.

IT asset management
You may ask, what really is IT asset management? IT asset management is a technology that helps IT organizations accurately take inventory of its hardware and

software assets, and track these assets through its life cycle. It

also includes means to track licenses, and terms and conditions. It allows you to know user constraints, asset interdependencies, and lifecycle costs.

Asset life cycle
I consider asset management a part of the IT operations process and its adoption, imperative. You can begin to track assets and analyze them by performing three simple procedures. First, you need to create a database to house information about your organization's IT equipment, suppliers, and negotiated license agreements. Second, you need to set up a process by which you can track your IT

equipment and enter the data into the asset database. Third, you need to analyze this data so that it becomes a resource for evaluating the status of your IT equipment. It can help you decide how best to use the equipment and help you make purchase decisions of new equipment.

Simple asset management
Assets need to be used and managed during its full life cycle. By tracking a PC, (by following it as it changes hands, locations, and functions) you can know where it is now and who is using it. This also tells you whether it's being underused or misused. This was an example of hardware life cycle. A software life cycle relates to the first version of the solution, updates, and its replacement.

Organizations need to know what assets they own, its locations, and its changes over time. Having a view of the data without the trends and historical information cannot support IT infrastructure planning, reporting, and management.

A start
A good place to begin asset tracking is the receiving department of your organization since all new equipment is routed through here. Tagging the equipment with a label or bar code can help track the equipment's movement within the organization.

According to several studies, organizations tend to underestimate the amount of equipment they actually own. HP once said that one of its client companies estimated that it owned 700

PCs. After making a physical count, the company discovered that it owned 1,200 PCs. Organizations often buy more equipment than they need.

The process
It's easy for equipment to go unaccounted especially in large organizations. Making an inventory of incoming equipment and putting it into a database is not a one-time activity. You need to establish a process by which details of all incoming equipment and software licenses are entered into the database and then tracked throughout its life cycle in the organization.

Suppose your asset database shows that your administrative staff work on 'thin' accounts

applications on their PCs and use 128 MB RAM. You can relocate some of the RAM to other PCs in your organization that need upgrades without sacrificing the functions on the administration departments PCs.

The more information you keep on each item, the more analysis you can perform on your IT assets. For example, you might want to keep track of who has a license for a particular software application. By metering the application's usage you can find out how many copies are being used. By analyzing this information you can make more accurate purchasing decisions when investing in upgrades. If many licenses are not being used, you could scale down your order and allocate the remainder of your budget to other areas.

Cost of ownership
It is advisable to keep track of cost factors like original price and additional investments in service and upgrades. If you keep track of how much money you spend on each PC over its lifetime, you know what your total cost of ownership is for each one. With this information, you know which PCs offer the best price and performance, which brands and models cost more than you thought, and which ones require repairs often.

When it's time to invest in a new set of PCs, you can make better purchasing decisions as well as more accurate forecasts for your IT budget. Details about leases, contracts, and warranties provide a clear picture of its performance and possible future action.

Besides the advantage of knowing how your organization acquires and uses IT equipment, asset management also helps service desk. If you connect your asset system to a helpdesk system, you can increase productivity, financial savings, and end-user satisfaction.

For example, an end user calls the helpdesk with a PC problem. The support person can tap the asset database to find out what PC that user has and what software he or she is running. As the user won't have to spend time to describe his or her environment to the support person, the call will be shorter, and the caller can go back to his/her work faster.

After tracking the problem the helpdesk operators can promptly act on the solution. They can check the problem list associated with that item and troubleshoot a new call more quickly. Periodic analysis reports on types of equipment that cause most problems should be generated. These can be used to evaluate the next round of purchases.

Software license control
Asset management helps keep your organization in compliance with software licensing agreements. It reminds you the maintenance renewal dates, cancellation notice dates, payment due dates, lease expiration dates, and authorization expiration dates. This way you can avoid incurring late payment penalties, and take advantage of all time-sensitive discounts before their expiry. It helps prevent automatic renewal of agreements that you want to cancel.

Purchasing managers often find themselves at the mercy of their vendors when negotiating software license agreements. While trying to negotiate the best terms possible, organizations usually purchase more licenses than actually required. This is because vendors maintain detailed records of company purchases, and most organizations haven't had the resources to do so.

Packaged Solutions
One can develop and customize asset management solutions in-house or take advantage of packaged solutions. There are two categories of solutions: low-end building blocks and high-end multi-component packages.

The building-blocks category has products like inventory applications, tracking, and metering programs. These tools help you build and populate your asset database. However, they are limited to querying workstations and servers for information on the equipment they house and software they run. They won't necessarily keep tabs on a switch or a hub. Developers in this category are CA, Intel, HP, and Seagate Software.

The high-end packages typically provide a full-blown asset database which communicates and integrates with other system management tools like backup and software distribution. Usually, the database lets you track physical inventory, lease and contract information, and financial information on your assets. Many of these packages let you tie the asset system to a helpdesk component and, in some cases, to your organization's financial system. Developers in this category are Microsoft with Win 2000 IntelliMirror and SMS, IBM with Tivoli, CA with Unicentre, and Inteldesk.


What kind of savings can organizations expect from asset tracking?

Consider the following:

  • How much time do end users lose struggling to resolve some problem with the computers sitting on their desk?
  • How many hours per week are lost due to the exciting appeal of the Internet?
  • How many hours of lost productivity can be attributed to software and hardware upgrades?
  • What kind of monetary and productivity losses are organizations experiencing due to the theft of computer components?
  • How much time and money is spent ensuring software license compliance?
  • How many hours are required to reconcile fixed-asset accounting system data with installed assets?
  • How much money can be saved through accurate asset depreciation and amortization rates?
  • How much money can be saved from reduced helpdesk response times?

Industry analysts estimate that potential savings in the first year of implementing an enterprise-wide asset management system can range from $300 to more than $2,000 per desktop. If you consider an organization with 5000 desktops, the potential savings can range from $1.5 million to $10 million. These savings dramatically reduce the total cost of ownership for hardware and software assets.

No offering provides a total solution. Your final system will be a combination of product, policy, and hands-on effort.

Meta Group : The Four Levels of Asset Management

Level 1: Characterized as reactive in nature. Asset discovery and rudimentary process development are key attributes.

Level 2: Characterized as active in nature. Manage existing assets and to leverage knowledge in procurement are key attributes.

Level 3: Characterized as proactive in nature. Leveraging planning and cross-organizational information are key attributes.

Level 4: Asset center of excellence - transactive in nature. Utilizing cross-organizational and cross-discipline techniques to maximize asset value and minimize IT organization costs are key attributes.

M. D. Agrawal is Chief Manager, IS Refinery System,
Bharat Petroleum Corporation Ltd.

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