Fewer than one-quarter of all enterprises practice good IT asset management, according to one estimate. But the other 75 percent might want to think carefully before buying one of the many IT asset management solutions now available, for while the benefits can be impressive, effective ITAM takes more than just a fancy piece of software.
[From iSource Business, February/March 2003] The first time that Salem Five Savings Bank tried to assemble a complete inventory of its information technology assets, the bank's IT staff went through a manual exercise of counting desktop computers and laptops and recording the software running on each machine. Trouble was, the inventory was essentially out of date upon completion. "It was as stale as it could be right after we did it," admits the bank's chief information officer, Dawn Dillon. Facing a key decision on how the bank would license its computer software, the CIO gave up on the manual process and elected instead to enter the brave new world of IT asset management.
Few Mature Implementations
IT asset management (ITAM) has been around for years, but surprisingly mature ITAM programs are the exception these days, according to Patricia Adams, senior analyst for technology consultancy Gartner and a specialist in IT asset management. Gartner has estimated that fewer than one-quarter of all enterprises worldwide have an effective IT asset management program in place, and a study by the consultancy found "marginal practices" for managing hardware assets at fully 90 percent of a group of audited corporate sites. The price of these poor practices can be substantial, raising the total cost of ownership for hardware assets alone by 7 to 10 percent annually, according to Gartner.
Software tools for IT asset management fall into three categories (see sidebar "The Vendor Landscape" on page 18). So-called "autodiscovery" or inventory tools are applications that prowl through a company's IT infrastructure to identify desktops computers, laptops, printers and network equipment, as well as operating systems and other software, and to collect such basic information as the manufacturer of an asset, its installed components and capabilities, or the names, serial numbers and versions of installed software.
Asset repository applications store information on assets, including data that may be input manually or pulled from other enterprise systems, such as purchase date and price, leasing terms and deadlines, licensing and warranty information, or the asset's assigned end user and service provider. This "proof of ownership" information in the repository solution can be reconciled against the "evidence of usage" information gathered by the auto-discovery tool to ensure that assets are being utilized as they were intended.
Finally, software usage tools can provide reports on how certain applications are being used, who is using them and how often, information that a CIO could use, for instance, to ensure that a company is actually using all the applications for which it is paying maintenance costs.
Benefits and Challenges
Examples of the potential benefits of effective ITAM include better software license compliance ensuring that a company has paid for all the applications on its computers. On the other hand, uncovering applications that are not being used can allow a company to trim its maintenance fees. A repository tool can provide alerts when hardware leases are due to expire, helping a company avoid late-return penalties.
ITAM can help CIOs plan budgets more effectively by providing insights into potential costs coming six or 12 months down the road as leases expire or service agreements come up for renewal. Companies also could use its inventory information to weed out one-off configurations, moving employees to a defined set of standard hardware and software configurations, simplifying IT procurement and support. Overall, Gartner has estimated that effective ITAM could save a company between 20 and 40 percent "per seat" per year.
Getting to those benefits, however, requires more than simply installing a piece of software. In fact, analysts warn that successful IT asset management is mostly about process. "Getting the process right is critical," says David Friedlander, an industry analyst with consultancy Giga Information Group. "It's all about making sure information is being entered in a timely fashion, comes from the right sources, is available to the right people and can be extracted as needed."
ITAM at Salem Five
Dawn Dillon agrees that IT asset management, like other technology projects, depends on solid processes. "We've come to realize over the years that everything is about good processes," says Salem Five Savings Bank's CIO, who has been in the IT side of financial services since 1985.
The bank, founded in 1855 and now a $1 billion institution headquartered in Salem, Mass., had built its IT infrastructure without a standardized process in place for tracking assets after their initial purchase. "I would go out on a limb to say we really weren't managing our assets," Dillon admits today. Salem Five is a mid-size operation, with just 400 employees, but half its end users are scattered across about a dozen branch offices around New England. Without an ITAM process in place, the bank started to experience big league headaches. "Software would come in the door and we would say, Who did we buy that for?'," Dillon says.
What finally prompted the bank to move toward ITAM was Microsoft's introduction, a couple years ago, of a relicensing program for its Windows operating system. When the software company provided Dillon with an inventory of the software that it showed registered for the bank, the CIO realized that the Microsoft list was incomplete. In response, the bank's IT staff carried out a manual inventory, but with computers and software coming and going on a continual basis, Dillon says the inventory was obsolete the moment it was completed. That convinced the CIO that Salem Five should embark on a full-fledged ITAM initiative.
The CIO's team surveyed the market for asset management solutions, but the bank was already using Computer Associates' Unicenter solution for its IT platform and in the end opted to purchase the Unicenter Asset Management module, a discovery and repository tool. With the software implementation on a 60-day completion schedule, the bank also hired a temporary worker to put asset tags on all of Salem Five's IT hardware and to change the system or computer name on each computer to the asset tag number. That way, when an end user calls for support, an IT staffer can ask for the asset tag number and then pull the system configuration for the user's machine immediately out of the Unicenter application.
Dillon says that while she did not encounter any serious end user pushback to the introduction of ITAM processes, her team did encounter questions about what exactly IT was looking for on users' computers and about the goals of the project what you might call "Big Brother anxiety." However, with education from IT on the objectives and benefits of the project, end users came around to the new processes. "They quickly understood that they can't be installing software, so they just stopped, and now they call us," Dillon says.
The inventory process produced an immediate benefit: Dillon was able to make an informed decision not to opt into the new licensing program and to continue buying software on a piecemeal basis. But the bank's ITAM program has had more lasting benefits, too, since Salem Five's IT staff is better equipped to support its end user community. For example, when a service call comes in from an end user preparing to buy a particular application, IT can determine immediately whether the user's machine will support the new software without having to send a staffer into the field, perhaps to a distant branch office, to gather the information necessary to make that call.
Best Practices for ITAM
What advice would Dillon offer to other companies preparing to head down the path to ITAM? Know your end game before you get started, counsels the CIO. For example, she knew she wanted the bank's machines to be tagged and their asset numbers in the repository. She recommends that companies determine ahead of time how intensively they want to manage their assets. "Do you care that they have Bonzai Buddy on their laptop?" Dillon asks pointedly.
Allan Andersen, vice president for Unicenter IT resource management at software provider Computer Associates, seconds that latter point. "Just because you can manage it, doesn't mean you have to or should," he notes. "You have to look at the business benefit." Some assets, such as high-end servers running mission critical applications, may truly need to be tracked at every phase of their lifecycles. For others, such as keyboards or mice, just tracking the purchase for accounting purposes would probably suffice.
Gartner recommends that companies roll out an ITAM project in stages. "It is such a huge project, and there is a lot of process-design work that needs to be done," says Adams. That means spending as much as six to 12 months reviewing, documenting, testing and implementing their processes before putting new tools in place.
Adams adds that the "generic" best practices that apply to any IT implementation also have their place in ITAM projects: creating metrics to document return on investment (ROI), getting senior-level management support for the program and the required process changes, educating end users to ensure adoption, and marketing the program on an ongoing basis to demonstrate the program's ROI.
ITAM project costs will vary, analyst say, depending on how comprehensive $10 to $25 per asset or per seat for the necessary software alone, with perhaps twice that amount for planning and implementation costs. On the other hand, analysts point to a fairly straightforward correlation between the level of investment in ITAM, the intensity of asset management at a company and the ROI that the company is likely to see from better management of its IT assets.
You can now find Enterprise Asset Management on the iSource Global Enabled Supply and Demand Chain Map on iSourceonline.com.
SIDEBAR: Are You Ready for ITAM?
"I'll make a gross generalization," offers David Friedlander of Giga Information Group. "It's probably time to have some sort of auto-discovery or inventory capability if, as the person responsible for IT management, you can't walk out your office door, walk down the hall and see everything you're responsible for."
On the other, an organization might consider implementing a full-fledged IT asset management project when it reaches 1,000 end users or "seats," at which point the complexities of organizational turnover and the sheer numbers of assets in play would make ITAM cost-effective.
But analysts warn that every company will be different. A smaller organization may find ITAM desirable, for instance, if its assets are geographically dispersed. Moreover, an organization of any size must ensure that its IT process are sufficiently mature and that IT is sufficiently integrated with other business units within the organization to ensure the ultimate success of an ITAM project.
SIDEBAR: Top Five ITAM Mistakes
iSource Business asked two experts in IT asset management Patricia Adams, senior analyst for technology consultancy Gartner, and David Friedlander, an industry analyst with consultancy Giga Information Group to cite the top pitfalls they see in ITAM implementations. The top mistakes they see include the following:
1.) Forgetting the process: Just buying some software and thinking that constitutes IT asset management won't get you there, says Friedlander. "The problem with IT asset management is that so much process re-engineering needs to be done," says the analyst, advising companies to focus on the process changes first before introducing new technology.
2.) Too far, too fast: IT asset management touches so many processes and so many functions within an enterprise that a slow, staged approach typically works best. "The reason [ITAM projects] tend to fail is because companies try to take it on all at once," Friedlander cautions. "You need to take small bites, evaluate all the processes, how you will use it, who will use it and who will own it."
3.) Copycatting: With strategic business objectives, political and cultural issues, and IT budgets varying from one organization to another, Adams says that patterning your own ITAM project on one underway at a competitor or at a similarly sized enterprise doesn't necessarily make sense. "I'm always very fond of saying that it's not one size fits all,'" she says.
4.) Lost in the shuffle: IT asset management is a complex, long-term project, which leaves it vulnerable to being moved to the bottom of the organization's "to-do" list as other corporate projects come up. "Companies going through reorganizations tend to lose their focus [on IT asset management] and their senior management buy-in to the project," says Adams. "That tends to stall the [ITAM] program."
5.) Too big a hammer: As costly as a full-fledged ITAM project is, Friedlander asserts, if, at the end of the day, all a company is getting out of asset management is just knowing what is on its network and what software licenses it owns, it would have done better to use an asset tracking tool, a smaller and less costly step to take.
SIDEBAR: The Vendor Landscape
The current vendor landscape for IT asset management tools is fragmented and, to some extent, volatile. Among the leaders in the field, analysts point to Peregrine Systems, which filed for bankruptcy last year but continues to operate; Main Control, which was acquired last May by MRO Software, a provider of production, facilities and fleet asset management solutions; and Computer Associates, which acquired additional asset management functionality when it bought a tool called Argis from rival software company Intraware last year. Additionally, smaller players abound.