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
and operations management play a key role in realizing ROI
Investment). Despite the economic
slowdown companies have made substantial invest-ments in IT
infrastructure. This confirms that business depends a lot
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
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
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
My company has recently
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
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.
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
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.
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.
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.
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
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
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
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
evaluate the next round of purchases.
Software license control
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.
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
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,
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
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
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
No offering provides a total solution. Your final system will
be a combination of product, policy, and hands-on effort.
Group : The Four Levels of Asset Management
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
D. Agrawal is Chief Manager, IS Refinery System,
Bharat Petroleum Corporation Ltd.