The art of asset management
If you do not track your financial assets, you cannot manage
them. The same philosophy is applicable to managing enterprise-wide IT assets.
A look at the issues related to this fast evolving discipline. by Anil Patrick
There are two ways to keep track of an organization's IT assetsyou either
do it the right way or the wrong way. If managed in the correct manner, even
the most minimal of assets can go a long way. When managed wrong, it is the
fastest way to put an end to the enterprise's IT infrastructure efficiency.
There is no 'middle path' in this aspect of Infrastructure Management (IM),
which is where many CTO/CIOs make the mistake. It is interesting at this point
to observe that most Indian organizations have rudimentary Asset Management
(AM) policies incorporated in their IM policies. But when the question is that
of optimal monitoring and management of assets for business benefits, the field
is still new to Indian enterprises.
AM means different things to different people. For some, it's just an inventory
on an Excel spreadsheet. And for the enlightened, it's an all out monitoring
and management process using comprehensive AM policies and sophisticated AM
tools. While inventories are necessary, doing this alone is not the solution.
Considering these factors, AM can be viewed as a set of well-defined practices
and processes governing the acquisition, maintenance, and implementation of
In reality, AM has gone beyond an 'inventory' or 'financial' type of definition.
Although these aspects are crucial, a fresh approach includes factors like asset
lifecycles, asset utilization monitoring and optimization. The focus is more
on the 'usefulness' side of assets than just 'stocktaking'.
has a lifecycle and it involves managing assets while keeping in mind many aspects
right from physical security to whether they are serving their purpose to the
end user. The important thing is about managing these distributed assets in
the most optimal manner," said Sanjay Sharma, Head-IT, IDBI Bank.
So how does an organization manage its IT assets in the most optimal manner?
Let's understand this through a hypothetical example. Consider a typical server
farm. Are the servers being underutilized? If they are, then it would be cheaper
to consolidate servers. Or consider a scenario where the organization does not
keep track of the devices connected to its network. It is very easy for unaccounted
resources to become non-functional without anyone being aware of it. It could
have great implications on network availability. This is where monitoring comes
into place, when discussing asset management.
Asset Lifecycle Management (ALM) also plays a major part in effective AM. See
box 'Enterprise ALM' for more on ALM.
Benefits of AM
The benefits associated with AM are direct and indirect. The biggest advantage
is that it helps an enterprise keep track and utilize all its assets optimally.
This is of great benefit in tracking TCO and ROI.
"With proper AM, it is possible to keep track of the capital expenditure
and also to arrive at the ROI, which the asset has given over a period of time,"
said P. Rangarajan, Asst. VP-Operations & Systems, Birla Sun Life.
AM also helps to tweak an enterprise's infrastructure for optimal results. "The
biggest advantages of using AM in an enterprise is you can fine-tune and utilize
the existing resources in an intelligent manner," said S.B. Patankar, Director-Information
Systems, The Stock Exchange.
It can be clearly seen that knowing the exact number of computers that are actually
being used from the entire inventory helps when doing the next procurement.
This also provides direct financial benefits by avoiding loss.
"If you do not know the exact number of the equipment that you have, there
is a financial loss associated with it," said Sharma.
The importance of AM when negotiating with vendors is very critical. CTO/CIOs
have to deal with vendors regarding AMCs and service contracts every year. Having
an up-to-date inventory of the equipment coming under warranty is very handy
during such negotiationsespecially in organizations having distributed
This is true not just in the case of hardware but also for software. The box
story, 'Managing software assets' details the issues related to software assets
and how to manage them optimally.
AM can also help the organization provide resources to users according to their
requirement. For example, the requirement of data-entry personnel in the Logistics
department will be different from that of the Accounts team.
A policy by itself
A majority of the Indian corporate believes in AM built into the infrastructure
policy. While this is not bad practice, the risk of AM losing its core focus
cannot be ruled out.
It is in this perspective that a company requires an AM policy distinct from
an IM policy. This is absolutely essential since AM requires involvement from
the entire organization than just IT. Most departments have their own requirements
when it comes to required assets.
The same AM strategy might not work throughout the entire organization due to
this. While the basics can be common, different AM strategies tailor-made for
each department in an organization might be required.
Creating an AM strategy
The essential objective of an AM policy should be to maximize value of an asset
over its entire lifecycle. Even if the AM policy is integrated with the IM policy,
it has to be clearly outlined and aligned with business.
Now comes the issue of formulating an AM strategy. When planning for future
assets it is essential to bring in future business growth and associated requirements,
which can be provided only by the business. A company needs to consider factors
like TCO and distribution of assets.
"TCO, anticipated future technology trends, physical and data related security,
BCP related issues, and compliance are the factors to consider when planning
assets," said Vikram R SriHari, Director-Business Systems, Coca-Cola India.
In such cases, it is essential that clauses to ensure periodical surveys and
policy enforcement are included. This will ensure proper enforcement of AM practices.
The policy should also specify how assets have to be disposed off once the asset's
lifecycle is over. This will detail if the assets have to be returned (for leased
assets) or if they have to be sold off.
Walking the way
One of the first steps to proper AM is to have an inventory in place. The inventory
should have details of IT assets across the enterprise.
The inventory should have information about the assetsright from time
of procurement/implementation, to changes done at the end of its lifecycle.
"The asset has to be numbered and all the details of the asset like purchase
order number, installation date, warranty period, and expiry of warranty have
to be maintained. This will enable tracking and monitoring of the assets properly,"
While it's easy to keep track of devices with IP addresses, it is difficult
to track other types of assets. This is where AM tools can help out enterprises.
The new age enterprise makes use of AM tools to keep track of its assets. These
tools greatly simplify the complexities involved in tracking enterprise-wide
"It is necessary to utilize the assets you have in the
best possible manner, as well as manage them. Both these are possible only with
the available tools, that can do these functions," said Patankar.
AM tools can automatically detect device information across the network, and
display it in different ways, like graphical and tabular formats. Inventory
of hardware and software assets are facilitated with such features.
Other features like configuration management, software usage monitoring, license
management, and mobile device management are available in these tools for effective
Many of the AM tools available today are add-on modules to IM tools. While the
costs of these tools tend to be on the higher side, the benefits justify the
costs involved in most cases.
Anil Patrick R can be reached at firstname.lastname@example.org
|Managing software assets is more complex than hardware
AM. Software issues like business needs, user expectations, licensing and
migration cause more headaches to enterprises than hardware issues.
As in other areas, business issues dictate the
choice of software. On this front, managing user issues becomes really
difficult in case of new software implementations. Once users are comfortable
with a particular system/interface, training becomes a major issue.
Unless system changes are drastically different, and
is of interest to users they will face problems. So unless new functional/technology
change requirements are required, software changes should not be performed.
Next in line comes licensing issues. If not managed properly,
this can cause legal problems for the organization. This is where an AM
tool with the capability to track software licensing can benefit greatly.
Processes and tools to curb use of pirated software also needs to be present
in the organization.
|Asset lifecycle basically means the timeframe in
which an IT asset can be optimally used to provide best benefits to the
business. Asset Lifecycle Management (ALM) deals with managing the value
of an asset during its lifecycle.
ALM is of prime importance since it deals with
actual 'usefulness' of an IT asset than just numbers. Each IT asset has
a typical lifecycle during which it gives optimal results. The unique
factor about this lifecycle is that it is related to business requirements
and infrastructure changes.
For example, PCs have a typical lifecycle of three to
four years, and software has a lifecycle of one to three years. In the
case of PCs, changes in software versions are the most frequent reasons
for replacement. Another reason is that it is cheaper to go in for a new
computer than maintain an older one in many cases.
The basic objective behind any ALM initiative should
be to maximize the value of an IT asset to the maximum during its lifecycle.
For example, a few years ago, IDBI Bank used client-server
architecture in all its branches. This called for more powerful desktops
on the client side. However, the bank found that after switching to the
datacenter model, the client desktop requirements came down, since only
browsers were being used. This helped increase the PC lifecycle.
"It's fine to define the life of a PC as four years
and then dispose it off. That is the easy way out. The real challenge
is to evaluate how environmental changes affect asset lifecycles,"
said Sanjay Sharma.
The reverse scenario can also happen. It is not uncommon
to see the lifecycle of assets like servers reduce drastically due to
business growth or business process reengineering, and requiring replacement.
It is very important to account for such probabilities, to avoid loss
of existing investments.
Keeping ALM in mind works wonders when it comes to buzzwords
like TCO and ROI, as well as in formulating budgets (It pleases the accounts
team as well, no doubt!).