Efficiency rather than expenditure is at the forefront of most IT purchasers' minds. Battle-scarred by years of tight or cut budgets, they are being forced to squeeze the maximum value from their existing systems, software and services and eliminate wasted resources.
Tools for tracking and managing that IT asset base have been around for more than a decade, but their value has become underscored not just by the intense pressure to manage costs. The escalating complexity of the IT infrastructure increases the difficulty of knowing the status of any piece of equipment or contract. At the same time, and in response to corporate governance issues, organisations are relying on IT asset management to ensure greater employee accountability and to ensure that assets are managed in line with security policies.
Moreover, asset management is increasingly being viewed as part of a broader service management capability as the IT department realises it cannot hope to fulfil service-level agreements unless it knows the status of relevant assets.
That is not to say that IT asset management (ITAM) has not delivered substantial business benefits to many organisations to date. And the source of such cost savings is simple: most organisations just do not know what they own, how long they have had it, where it is in any maintenance cycle and when the item is likely to become redundant.
The examples abound. Organisations buy too many software user licences; they deploy more than they have the rights for and put themselves at risk of legal action. They ‘lose' laptops by the dozen, as well as the occasional server. They find rogue devices brought in by users – or even by industrial spies. But most of all, they duplicate resources on a vast scale across different parts of the company.
Hence the vendors of asset management software argue – and with some justification – any systematic approach to auditing and rationalising the asset base brings with it a hefty return-on-investment (ROI).
From cradle to grave
The aim is to build a picture of assets ‘from cradle to grave'. And that involves a single starting point. "For the ITAM purist, the purchase order is king – everything else is reconciled against that," says Mark Boggia, EMEA lead systems engineer at Altiris, a vendor of asset management software. But that can be a flawed approach. "That's all well and good if the purchase orders are reliable, but often they aren't."
Colin Bannister, consulting director in the UK for Computer Associates' technology services organisation, says that "around 80% of IT invoices are incorrect, especially software invoices, and very often there are multiple invoices for the same product."
Aside from tracking the initial purchase, though, there is a long list of other aspects that need recording, such as the terms of the warranty, the asset's depreciation in value over time and the terms of any related support agreement.
Blair Kantolinna, the EMEA business manager for asset management and discovery at systems management software vendor BMC, outlines three different stages in an organisation's adoption of asset management.
First – the stage that applies to the majority of organisations – involves simply discovering and cataloguing assets. With IT assets this auditing process can be partially automated, unlike when dealing with physical assets, say in a utilities company, where the audit can be long and arduous. The fact that 60% of asset management adopters are at this point, says Kantolinna, is due to the way many organisations are structured.
"Businesses tend to grow in silos, and if they don't have a joined up view of what those silos purchase individually, they tend to overspend. So most are just in the stage of trying to work out what they've got."
The second stage in the evolution, which BMC estimates covers around 30% of organisations, includes those that manage their assets throughout their lifecycle, relating inventory to purchase and lease records.
The third level, what BMC terms ‘proactive' asset management, finds organisations that are able to use their historical asset data to plan ahead. Although only 10% of asset management implementers can be considered to have attained this level, pressure to be accountable is pushing more companies in this direction.
According to IT industry estimates, around 30% of the software in use in the UK (both home and corporate) is unlicensed. And while policing their own use of products, organisations also need to educate their workforces to avoid introducing software that may be illegal. Geoff Webster, the Federation Against Software Theft's corporate services CEO, says a large percentage of the time taken to establish an asset management system revolves around such policy development. "Technology can back up an organisation's policy with things like firewalls, but you really need employees' buy-in and understanding that if users download something, it may [be illegal] as well as bring spyware along with it."
Furthermore, workers have to be encouraged to be conscientious about their use of corporate IT assets. "Laptops, mobiles and Blackberrys are not just leaving bonuses," jokes Altiris' Boggia. "When someone joins or leaves an organisation, the company has to capture everything associated with them, even if it comes down to the chair they've been assigned for their home office."
What is required is a clear definition of how a worker's role relates to assets. This can outline, say, whether a laptop should be an individual or group resource and should question whether the staff member really needs Microsoft Project, for example, when they are not a project manager? The latter assessment can really cut down on costs, says Ian Macdonald, product marketing manager for EMEA at asset management software pioneer Peregrine: MS Project adds 20% to the cost of office software but is only used by 15% of workers.
Frances O'Brien, an analyst with industry advisor Gartner, echoes the point: "A more comprehensive view of the members in the [software asset management] ecosystem provides better insight into making decisions across different business units."
She thinks effective use of assets flows from business units communicating much more openly and so preventing as much duplication as possible.
Centralisation
At a technology level, that means creating a centralised asset data repository, which holds all information about assets and their use. That is manifesting itself in a new technology set: the configuration management database (CMDB), a means of providing a holistic view of all a company's assets – everything from detailing the memory on a hardware device or the version of a piece of software to the number of activated processors on a high-end server.
"The idea of having a single source for assets has been talked about for years, but it is technically difficult to do," says CA's Bannister. "It requires a significant re-engineering of many applications."
The complexity derives from the fact that information about assets is often stored in several different locations and formats. Kantolinna estimates most customers have between two and five discovery tools that will need to feed into a CMDB. Says Bannister: "The big advantage of having a database is that you can store dependencies between assets too – see which applications impact others. You can't do that unless you've got one source. It's allowing IT to provide a service to the whole business."
The emergence of configuration management databases is part of a wider drive to embed asset management within business service management (BSM). A picture of asset status and inter-dependencies is critical to the delivery of IT as a service.
BMC estimates 80% of downtime is caused by unplanned change. If companies have a better idea of the change cycle of assets critical to the delivery of a service, then they are in a better position to underwrite service-level agreements.
This growing sophistication reflects what has occurred with the management of non-IT assets. SAP's Mike Lewis is the business application giant's industry manager for utilities in the UK and Ireland: "Asset management in its purest form was pioneered by the energy sector, particularly the oil and gas industries, where companies simply cannot afford to have one minute where they aren't able to provide a service."
Some vendors coming from the industrial side of asset management software, such as MRO Software's CEO Chip Drapeau, see an inevitable convergence of IT and non-IT asset management as IT becomes sown deep into many industrial assets. "The modern environment is driven by IT. In a modern power plant, what would be the worst failure – a turbine failing or the IT system, if it is IT that controls the load on the grid?" At this point, though, several analysts still contend that IT and industrial asset management technologies need to be kept separate because of different levels of maturity in the technologies.
Sky-high ROI
What they do have in common is clear evidence of ROI. "With IT asset management, talking about ROI is almost meaningless," says Webster. "Spend a few hundred pounds and get a return in the millions. The problem is that the IT community gets too excited about new waves of technology: too frequently the notion of simply getting to grips with what you've got and putting it in a database doesn't grab people."
From O'Brien of Gartner's point of view, businesses might have been underwhelmed by the cost-saving potential of IT asset management because buyers have often bought asset management tools before they had their processes in place. As a consequence, there is a large catalogue of failed asset management projects and wasted time and money, she says.
Yet a compelling case for a holistic asset management system is not difficult to construct. Being caught with unlicensed software certainly provides some justification. Industry trade groups and software vendors are becoming increasingly vigilant about clamping down on illegally copied software and O'Brien predicts that around 40% of mid-size and large enterprises can expect a software audit within the next two years.
The Business Software Alliance alone has collected over $47 million in payments over the last six years after investigations into software theft. But there are even more solid economic arguments. Gartner says that "customers that commit a minimum of 3% of their annual operating budgets to IT asset management programmes and tools can expect a 25% reduction in their TCO."
The use of better asset management is underscored by other factors – especially issues of corporate governance. Mark Ashley, divisional director at IT services company Morse, says: "Corporate governance is forcing people to think a lot more carefully about deployment and depreciation; before, the accountability was not there and TCO was the main driver."
Macdonald from Peregrine concurs: "Compliance brings in the majority of new business [today] – companies come to us saying they have an audit in six months and need to know what they've got." More and more companies are making that call.
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