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Issue of February 2004 
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Infrastructure management

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 R

There are two ways to keep track of an organization's IT assets—you 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.

Asset management

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 IT services.

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'.

"Each asset 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.

Optimal AM

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 negotiations—especially in organizations having distributed infrastructure.

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 assets—right 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," said Rangarajan.

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.

Working smart

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 assets.

"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 asset tracking.

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 anilpatrick@networkmagazineindia.com

Managing software assets

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.

Enterprise ALM
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!).

 
     
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