Compliance Advice for the New Year

Peregrine Systems offers steps improve IT asset management practices

San Diego — January 3, 2005 — Peregrine Systems Inc., a provider of asset and service management solutions, today offered recommendations on how global organizations can meet financial and operational compliance requirements by implementing an effective information technology (IT) asset management practice.

The scope of IT asset management has traditionally been limited to basic information about IT assets, such as types, locations and owners. However, recent compliance regulations have raised the bar for requirements needed to manage assets, the provider said. Compliance with corporate guidelines and government regulations requires greater business process automation, information sharing and application integration between IT and other disciplines, such as purchasing, finance and human resources (HR).

According to Peregrine, because IT assets often comprise a large part of an organization's expenditures, it is critical that the company keeps accurate financial records that reflect the true value of those assets. In addition, efficient management of hardware, software and network assets not only helps organizations meet compliance requirements and manage costs, but it also allows organizations to be more agile, making informed business and IT decisions quickly and in line with market needs.

With an IT asset management practice in place to manage the full lifecycle of an IT asset — from budgeting to procurement, deployment and finally retirement — any changes to an IT asset becomes the basis for an accurate, up-to-date financial record. These changes become the basis for the process documentation requirements of many compliance regulations. As a result, organizations are better able to mitigate security and compliance risk.

Peregrine recommended the following 10 steps to improve IT asset management practices through automated business processes that support cross-functional disciplines. These tips were recently published in Compliance Pipeline, an online source of information on regulatory compliance issues.

1. Assess IT asset management practice — Conduct a thorough evaluation of your organization's approach to IT asset management.

2. Deploy an asset management solution — Implement a full-lifecycle asset management solution, which will integrate and share information with enterprise resource planning (ERP), finance and HR application and automate processes for request management, procurement, invoice and payment reconciliation as well as fixed-asset reconciliation.

3. Ensure critical processes are operational — Confirm that the automated request management and procurement processes are set up so that each asset request is registered against budget and procured through a central procurement system. This process provides a basis for asset ownership and cost center budget reconciliation.

4. Enable automatic payment reconciliation — Once assets are received, they should be automatically reconciled against the originating purchase order for payment reconciliation to reduce overpayment and labor associated with manual payment reconciliation.

5. Establish automatic inventory management — Ensure that all assets are automatically inventoried and reconciled in a master repository on a regular basis. For many companies, this process should occur on a weekly or monthly basis.

6. Enable total asset reconciliation — Periodically reconcile the entire asset repository against accounting records to prevent overstatement of asset cost, erroneous entries, duplicate transactions and omissions and establishes the necessary controls for compliance regulations.

7. Integrate asset and HR processes — Synchronize the asset management repository with the HR database so that employee location, asset ownership and cost center are accurately represented. Therefore, any change in employee status, especially as it relates to security clearance and physical location (e.g. tax implications), will be reconciled.

8. Link asset and accounting processes — Leverage the asset management to notify or update accounting records each time there is an asset status change, and integrate asset management software with finance applications to maintain accurate, up-to-date financial records. For example, once an IT asset is procured and deployed, the fixed-asset record should be automatically updated. If an asset moves to another state, the tax status would need to be appropriately changed. If the asset is retired early, there should be a fixed-asset adjustment as well.

9. Document critical IT assets — Ensure that business-critical IT assets have fully documented configuration information, including hardware status, software image, security status and change records.

10. Integrate IT asset and service management — Integrate IT asset and service management practices, including a change management system that fully documents all change activities to business-critical systems, including data center and distributed systems.

Loading