IT asset management

A best practice guide for IT asset management

Business white paper
Table of contents
Executive summary ....................................................................................3
Introduction .....................................................................................................3
The growing necessity to manage and control assets ....4
A synopsis on how an IT asset management solution
can help ......................................................................................................4
IT asset management defined ............................................................6
Inventory discoverya vital component of IT asset
management ............................................................................................6
Clarifying what does not constitute IT asset
management ............................................................................................7
IT asset management fundamentals ............................................8
The asset management lifecycle .......................................................8
Stage 1: Asset request and procurement .................................9
Stage 2: Asset change management process ....................12
Stage 3: Asset disposal and replacement ...........................16
Evolving an IT asset management system ..............................18
Levels of maturity ...................................................................................18
Getting startedthe key initiatives ............................................18
Benchmarking your performance...............................................19
Conclusion .................................................................................................20
3
Executive summary
Too many CIOs lack credibility with their peers who
are line-of-business managers, and too many frustrate
their CFOs, their COOs, and their CEOs because they
cannot answer four questions that were long considered
fundamental to running a successful business:
What assets do you have?
What is the return of these assets to the business,
and how are you improving that return?
How does the performance of our asset investments
compare with that of our competitors?
What risks do the assets create for the business, and
how is that being managed?
There are a lot of moving pieces in IT, and very rare
is the CEO who cares about those individual pieces.
What enterprise leaders care about is the value
those IT components provide through reducing costs,
enabling revenue streams, creating options for growth,
and proving compliance. So how do CIOs translate
the performance of IT assets into something the CEO
cares about? How do they then prove that they are
managing those assets, not only to provide a good
return to the business, but a return that is higher than
what is being generated by competing firms?
This paper shows how IT asset management (ITAM)
enables the CIO to answer these basic questions to
the satisfaction of the CFO, COO, and CEO. ITAM,
which comprises processes, tools, data, and people,
manages the entire lifecycle of an IT asset and so
can not only answer the question what assets a
company owns, but what assets it expects to soon
own and what assets it expects to soon dispose of.
Because ITAM collects, aggregates, and tracks the
costs of every IT asset and can logically map IT assets
to business and IT services, ITAM is able to convey
the cost information necessary for determining the
return to the business on any given IT or business
service. ITAM can then increase those returns through
effective vendor and contract management. Lastly,
risks associated with IT assets can be articulated
and managed because ITAM manages the legal
obligations associated with vendor warranties and
support commitments, entitlements, and asset disposal.
Introduction
The perception of IT has evolved from being a cost
center to a business enabler, prompting escalating
investments in this area. As a result, ITAM has
assumed high priority in optimizing financial
management and enabling business alignment. This
has prompted HP to augment a comprehensive suite
of solutions, including best practices, for managing IT
infrastructure throughout its lifecycle.
To manage an asset effectively, it is important to
understand the total costs associated with that asset,
and how it supports critical business services throughout
its lifespan. This is referred to in terms of total cost
of ownership (TCO). TCO is inherently valuable in
analyzing and understanding the costs associated with
the assets life as it relates to budgeting, allocation,
accounting, and service valuation.
4
The growing necessity to manage
and control assets
The key factors that compel you to consider a better
way of handling your IT assets include:
Cost
With the provision of reliable, flexible, and state-
of-the-art infrastructure being a key determinant for
employee efficiency and competitive advantage,
change is a given. But change comes at a cost,
TCO, of which the purchase cost or the up-front
cost accounts for only 4 to 20 percent. As the
remaining TCO covers the entire lifecycle costs of
the equipment concernedincluding installation
costs, change management costs, maintenance,
upgrades, virtualization, service or help desk costs,
and disposal costsarriving at an accurate TCO can
be challenging. In addition, it is impossible to optimize
your infrastructure investments if you dont know what
assets you have and how they are utilized to support
critical business services.
Dependency
With IT enabling your global business operations to
function on a 24x7, follow-the-sun service policy, IT
infrastructure is too important to be left unmanaged.
ITAM will play a crucial role in helping IT add value
to your enterprise growth strategy, going beyond
providing mere utility value. Understanding all of
the asset upstream and downstream relationships is
critical to dealing with the impact of change effectively
across heterogeneous infrastructures.
Hardware replacement
The pressure to stay competitive and the fast pace
of change in both software and hardware have
prompted organizations to update IT hardware on
a regular basis to process larger, more complicated
software. Hardware is now replaced every year
or two, as against once every five years, with the
maximum life of the equipment hardly crossing a
three-year period.
Tax efficiencies
Tax liabilities on IT assets exist in some countries.
Therefore, it naturally follows that efficient
management of all assets is important, because it will
produce significant savings over time.
A synopsis on how an IT asset
management solution can help
The path to sustainable market leadership demands
that you seek savings and efficiency gains without
compromising on regulatory compliance in managing
your IT assets. Given these dynamics, a quality asset
management system should include asset-tracking
capabilities to help you plan, manage, dispose,
and replace equipment effectively. But asset
management is much more than this. A strong asset
management solution must have capabilities in
contract management, license compliance, and IT
financial management.
Figure 1: Ask yourself these questions
These five fundamental questions demonstrate the scope and dimensions of effective infrastructure management. If the answers are not known or are
not available, then HP can help you.
How well is it
supporting
your business?
What do you have ?
Where is it?
How well is it
working ?
How much
is it costing ?
5
Earlier, the value of purchased assets used to be
written off at the end of their life. Today, because
hardware is replaced at a faster rate, the equipment
reaching end of life still has significant value. But to
be able to sell the asset, you first need to locate it
and establish its present value, which is usually set
according to processor speed and memory. Besides,
the ability to control the flow of software throughout
an organization can be a difficult task. Consistent
best practices need to be in place to make sure
that compliance can be met and maintained on an
ongoing basis.
In case of leased equipment, the failure to return the
equipment at the end of the agreed lease period
attracts substantial penalty charges. Here, the
challenge is to quickly locate equipment that has been
cascaded within your organization.
No matter which procurement route you choose
purchasing or leasing assetseffective ITAM helps
enhance cost efficiency.
Most businesses log the first user of the equipment but
fail to track the changes that occur during the life of
the equipment. These changes include installation and
removal of software, addition of memory or a larger
hard disk, or re-assignment of the physical asset to
another user. As a consequence, the asset is lost
or may require the acquisition of additional software
licenses. This makes ongoing asset tracking a critical
feature of a quality asset management system.
Added to this, the linking of contract information, such
as leasing/replacement dates, insurance contracts,
and maintenance agreements, is valuable ITAM
because it provides true historical costs associated
with all items.
To enable clarity on the decision to purchase or lease,
ITAM also enables the asset manager to perform
lease versus buy analysis, based on usability metrics.
Consider that while lease rates may look attractive in
the first year, the TCO can exceed actual purchase
costs. Besides, those same rates may not look as
attractive in three or four years, because you will be
paying for what is likely to be obsolete technology.
Integration is another key aspect of an ITAM solution.
A quality ITAM solution will link with other electronic
data sources, encompass the complete asset lifecycle,
and enable e-business opportunities. The use of
a procurement system is also useful in integrating
information and speeding up the procurement cycle.
In a nutshell, building a discipline and culture around
ITAM can result in an organizations ability to
accomplish the following:
Introduce virtualization and maintain compliance
Manage the TCO of a business service
Maintain a competitive edge
Enhance operational productivity
Implement consistent and repeatable processes
Reduce costs, specifically costs related to change
Manage asset utilization effectively and release
capital back into the organization
Improve bottom-line profitability
Increase service-level agreements (SLAs) and, as a
result, customer satisfaction
Manage IT in financial terms and accountability by
charging back for utilization of services
6
IT asset management defined
Inventory discoverya vital
component of IT asset management
Inventory discovery is broadly classified as physical
and automated. For more accurate findings, using
both these methods is recommended:
Physical and virtual inventory discovery
Equipment can be discovered through physical audits
or by using existing information to help reconcile the
asset management database.
Consider this example: Assets are usually allocated
to a member of staff. To check whether staff records
are accurate, reconcile them with HR records or, even
better, against payroll to confirm all current staff.
Where staff has left the organization, there needs to
be an amendment to the data on the asset repository
and, more importantly, a process in place to trace any
equipment allocated to a former employee.
Automated inventory discovery
The best approach for tracking IT assets is through
an automated inventory discovery product that
uses a combination of agent-less and agent-based
capabilities. Combining different discovery techniques
enables a greater number of assets to be discovered
and tracked over their lifecyclesquickly and
reliably over time. Ping, reading of Dynamic Host
Configuration Protocol and router Address Resolution
Protocol caches, and other standard methods can be
used to achieve this goal.
The other decisive factors of an effective automated
inventory discovery product are:
Should provide high-quality data for a more
accurate presentation of results
Should be able to monitor the network, without
straining the network with ongoing scanning
operations, to discover assets assigned to mobile
users or cascaded within the organization
Should track software utilization because this
information can be used to optimize the cost of
software licenses
Should be able to track both physical and
virtual assets
Should have hardware recognition capabilities,
with data provided in the same format across all
platforms to be able to normalize data wherever
possible
Should have detailed software recognition
capabilities to compare discovered data with
contracts stored in the asset management system
HP offers Discovery and Dependency Mapping
Inventory (DDMI) software to support automated
inventory discovery. The DDMI software combines
agent-less inventory of the IP environment with
agent-based hardware and software inventory and
software utilization to enhance data accuracy, as
dictated by best practice guidelines. It employs
hardware and software recognition along with
researched, accurate data collection mechanisms to
make sure that the data it collects is of high quality.
The DDMI software also provides out-of-the-box
integration with HP Asset Manager software.
Though automation is key to reducing the cost of
management and tracking, it cannot be solely relied
on as it has its limitations. Auto discovery can neither
find assets that are not connected to the network, nor
can it identify true ownership or entitlement of the
assets not discovered.
7
Clarifying what does not constitute IT
asset management
The first step to explaining ITAM is to spell out what it
is not. Many companies assume that they have asset
management systems in place, simply because they
have any or all of the following:
A discovery tool
Most organizations that have the ability to
discover physical assets believe they have an asset
management solution in place. What they fail to
understand is that asset management is not just
discovery, but also the tracking of the physical,
financial, and contractual information about the
asset as it changes throughout its entire lifecycle. A
discovery tool cannot do any of this.
Physical inventory database
This is highly accurate, but time sensitive. As soon
as the inventory data is recorded, it is potentially
outdated due to moves, adds, and changes that
are constantly taking place in the infrastructure. In
addition, typical physical inventories focus only on
hardware and software configuration information.
In most cases, organizations do not include the research
necessary to tie financial and contract information to the
asset with this method. The need for physical inventories
is usually driven by an event such as a true up for
lease or insurance purposes, or a critical event such as
an acquisition, refresh, or mass upgrade.
Assets spreadsheets
Asset spreadsheets are pervasive throughout many
enterprises at the business-unit level. They are usually
used to track assets for getting some transparency into
budgeting, but also for security or intellectual property
purposes. Because the spreadsheets are created and
maintained by each individual business unit, there is
a lack of discipline and standardization in formatting
and naming conventions for the fields being tracked.
This makes it virtually impossible to gain an enterprise
view in any consistent form.
Fixed asset systems
Most financial professionals prefer the fixed asset
system as the system of record, because it relates to
book and tax implications. It is of little help, though,
when it comes to the day-to-day operations of IT or to
gain a view into the assets TCO. It does not factor in
costs associated with the asset during its service life,
involving install, move, add, and change processes
(often referred to by the industry term IMAC). The
system only records acquisition and disposal costs,
which almost never account for more than 25 percent
of the assets TCO.
Clearly, the fixed asset system cannot be used as
the system of record for ITAM. A best practice is to
integrate the IT repository with fixed asset systems to
enable accuracy throughout the equipment lifecycle
and support audits, such as Sarbanes-Oxley (SOX)
compliance audits. Ideally, the asset management
system should actually create and update fixed assets,
based on important events, such as acquisition and
disposal. In addition, the asset management database
should be used as a subledger of information, since the
entire configuration is tracked against the high-level,
quantity-based solution of the fixed assets register.
Figure 2: Management challenges
From the IT point of view, managing IMAC processes is seen as an uncontrollable part of the asset management lifecycle.
New asset entering
Catch point
incoming configuration
and receiving
Catch point
in-service
lifecycle (IMAC)
Catch point
out of service
Reconciliation and auditing
8
ITAM is not just about storing data though. It also
extends to functionalities such as:
Deploying the stored data successfully to operations
and synchronizing tasks
Automating procedures, which is vital in the
coordination of large-scale projects
Empowering operators in their daily tasks
Reducing the risk of double entries and human error
by collecting data throughout operational processes
The ultimate goal is that each employee has the
relevant information in the most appropriate format,
at the right time. Once the data is captured, the
information can be used for management reporting,
financial reporting, auditing, and planning purposes.
Data can be linked between systems, usually using
a single source of data, rather than unnecessary
duplication of the same information in multiple places.
The asset management lifecycle
The asset management lifecycle covers the period
from initial request for an item through procurement,
delivery, stocking, deployment, monitoring, support,
installation (as well as all moves, adds, or changes in
location), upgrades, reuse, termination, disposal, and
replacement.
The wide-ranging factors under asset management
have been classified using a simple, three-stage
format. This is to help you understand and manage
with ease the best practice methodology in asset
management. The critical aspects of the cycle, from
a data accuracy perspective, include request and
procurement at the front end of the cycle and disposal
at the back end. The asset changes that take place fall
in between.
IT asset management fundamentals
Now that the false assumptions about ITAM have been
cleared, the next step is to define what it comprises:
A holistic asset management discipline
Asset management is the integration of the physical,
financial, and contractual attributes of software and
hardware to enable the delivery of cost-efficient, timely
business services. As a holistic process, it includes the
management of the assets identifiers, components,
support and warranty dates, costs, contract
associations, and all events associated with the asset.
Most importantly, asset management is a discipline
that enables the financial management of IT assets,
providing cost-effective stewardship of IT assets
and the resources used in providing IT services. To
implement a sound asset management system, tools
must be aligned to processes that are event oriented
and traceable. Also, cultural and political shifts must
take place within the organization. To put it simply,
without an asset management discipline, asset
management accuracy cannot exist, and the ability to
form a configuration management database (CMDB)
cannot be established. Organizations must ask
themselves, If I do not know what assets I have, how
can I possibly optimize my IT spend?
An asset measurement system
Asset management is a powerful measurement system
that provides functions ranging from standardization
and budgeting to return on investment (ROI) analysis.
A metric focus is vital for any asset management
initiative, because, without a baseline for forming your
asset repository, it is nearly impossible to relate the
underlining assets to the critical business services that
are being delivered.
A dynamic assets database
The asset management repository holds all relevant
asset information. This includes:
User details
Location
Asset type
Model and serial numbers
Purchase and leasing costs
Purchase and leasing information
Termination or replacement date
Maintenance, repair, change, and upgrade
information
History
Portfolio/financial
management
Request
Procure
Receive
Stock
Deploy
Monitor
Support
IMAC
Dispose/
reallocate
Figure 3: The asset management lifecycle
The complete asset management lifecycle spans from request and
procurement to disposal or reallocation.
9
A best practice is that large organizations should
appoint an asset manager with direct access to
the management team to be able to implement
effectively the guidelines for realizing a sound asset
management system.
Stage 1: Asset request and
procurement
This stage includes every aspect of acquiring an
asset, from initial request and selection to arrival and
training the user to begin operating the IT-related
equipment. The two broad processes in this stage
involve user management and the approval process.
The key elements of user management are as follows:
User requests
The user requests an item through an approved
person, group, or e-procurement system. The request
could be submitted through a service catalog or a
Web-based request solution. The request is then
subjected to best practice approval workflows to
enable control and accountability for spending and
standards. At any stage of the approval process, the
user should be able to find out the actual status of
the request.
The ITAM framework for standardization recommends
that you limit the choice, for example, to just three
types of equipment. This would mean that the
maintenance staff would only need to keep parts and
gain expertise on three machines every year. Each
type of machine should have a standard specification
that is defined in the product catalog from which
users select their items to enable a consistent office
environment, lower costs, decrease complexity of the
systems, and lower demands on the help desk.
Package or bundled
When a user makes a request, all associated standard
equipment should also be included. For example, a
desktop PC would include a screen, mouse, keyboard,
disk drive, CD-ROM, and mouse mat, as well as
standardized software packages that are necessary
for the user.
Software request
The software requirement should be specified at the
time of the request. Often this can be purchased at a
discounted rate as part of the deal. Also, depending
on preference, software is sometimes loaded by
the supplier prior to delivery or may be part of the
requested bundle or standard software image,
based on the users role. These tracking mechanisms
and standard bundles also help control TCO and
supportability.
Receiver of the request
A best practice is that the receiver of a request for
new equipment should not be an individual, but a
group or team of people, to provide cover when a
person is out of the office for any reason.
The approval process involves the following
considerations:
Budget
It is important to closely monitor the budget. Failure
to do so is likely to have serious consequences for
approvers and ultimately the organization, due to
increased TCO and supportability.
Figure 4: Keeping it simple
For simplicity, the asset management lifecycle can be viewed in terms of three stages.
IT asset management process
High-level process flow
Stage 1
IT asset procurement
Initial selection, approval,
acquisition, and delivery. Set
up and training. Fully ready
for use.
Stage 2
IT asset change
management
All changes that occur during
the lifetime of IT assets.
Stage 3
Asset disposal
and replacement
Termination of use.
Environmental disposal. Data
wiping. Identification of the
need for replacement.
Replacement
10
Avoiding delay
The approval process is often the cause of delays in
acquiring new equipment. If the approver is a single
person within an organization, delays can occur
because that person has not been able to consider
the case. To avoid delay, an automatic referral of the
request for approval should be sent to a deputy or
more senior approver. This can be set up as part of
the procurement system. If it is a manual system, a
copy of the request for approval can be sent to the
approvers. Also, the procurement team should monitor
all requests through regular reports on turnaround
time. Areas or individuals causing delays should be
reviewed, and solutions to the problems should be
identified and implemented.
Stock
Effective asset management processes allow the
approver to check whether a requested item is
actually available, avoiding unnecessary purchases.
If not, there must be a checkpoint within the change
management process to make sure the equipment on
order is compatible with the policies of the enterprise.
One should also check with the change management
control board to verify that the incoming order will not
be affected by a near-term strategic change within the
organization.
New hires
To relieve the pressure on the procurement system, a
number of necessary overheads should be associated
and approved whenever a new hire is approved.
For example, approval for a new hire should include
a desk, chair, office location, and PC. The Human
Resources (HR) department should advise procurement
in respect to the new PC. This could mean that the
new PC would be assigned to an existing employee
and the used PC cascaded to the new employee.
Approval denied
When approval is denied, this decision must be
quickly communicated to both the requester and the
procurement team.
User choice
(limited to
standards)
Software
requirements
Submit
request
Typical asset management stage 1 process
User
request
Procurement
team
Approval
Yes
Budget
(provision/approval
process)
No
Deny user
Advise IT
technician
(installer)
Place order with
supplier once approved
Supplier delivery
Advise asset
manager
Equipment
delivered to site
(security to check
delivery against
delivery note)
Laptop equipment
delivered to IT
department for
image/software build
Desktop delivered
to office; configure
onsite
IT to amend
license and
asset register
Training
(where necessary)
User receives
equipment
Old equipment
removed by IT;
amend asset
register; see
disposal process
Security/IT to
confirm satisfactory
delivery type/specification
Finance department
for payment
Invoice from
supplier
Pay invoice
Submit for
approval
Advise network
team (network
password)
Figure 5: The typical asset management stage 1 process
A typical asset management stage 1 process is shown here.
1. The image build and software may be installed prior to delivery by supplier.
2. The responsibility for adding/checking asset register lies with the allocator/
installernormally the IT technician.
3. Equipment must be added to the asset register (CMDB) and signed for by the user
prior to release.
4. The e-procurement model simplifies the process. Requests are normally made
through an online supplier catalog.
11
Procurement process
The definition of the procurement process for ITAM
purposes is the process by which an organization
plans and then manages the procurement process.
This includes receiving a legitimate request and
approval for goods and services (including standards,
definitions, and supplier identification), and
discounting targets and policies under negotiated
discounts and contracts. Ultimately, the goal of the
procurement process is to enable the best price for
the best product and service available to meet the
organizations needs, while providing full visibility
to surplus.
Order placement
The order is normally placed with the approved
supplier. There are likely to be a number of approved
suppliers, usually one for each type of product. The
service aspect will include the preferred arrangements
for delivery and sometimes installation of the equipment.
A best practice to avoid delays in delivery is to
provide advance notice of expectations on delivery
schedules. Delays can further be avoided by putting in
place an e-procurement system that streamlines the
processes and by engaging in e-business transactions
over the Internet.
Communication
It is important to verify that equipment is tracked from
the time the order is placed until it is disposed of by
the organization.
Here are the relevant roles of each participant in
theprocess:
Finance: To expect the invoice and manage the
payment process
Asset manager: To expect delivery and verify that
the equipment is logged either upon delivery or
before releasing it to the user
IT technician: To schedule installation and tag the
asset with a unique asset-tag identifier as part of
the goods receiving process. This, along with the
assets serial number, should remain with the asset
throughout its lifecycle and be the primary linkage to
the fixed asset system.
Training: To schedule training, if required
Security: To be aware of the impending delivery,
verify that it meets the description and quantity
detailed on the delivery note, and transport the
equipment to the appropriate place
A quality procurement system and asset management
system automates these processes, provides the asset
tags, and monitors the use and functionality of each
asset throughout its lifecycle.
Allocation to user
An asset management system provides the warehouse
manager, who receives new assets, with the ability to
reconcile received goods with purchase orders and
original requests. This is referred to as procurements
three-way match.
It is a good practice for the receiver to assign a unique
asset numberallocated by the asset management
software solutionto the item on receipt. Sometimes
asset numbers are attached by the supplier by special
arrangement prior to delivery.
The IT technician is responsible for installing IT
equipment for the user and making sure that the
equipment is fully configured and ready for use. The
asset repository must be correct prior to allocating
any equipment. The asset entry should also include all
software installed. As the information about the asset
will never be more accurate than it is at this stage, a
best practice is that the asset manager determines the
accuracy of the asset as it enters the CMDB to enable
a clean start.
Equipment received by user
After delivery, the user is shown how to gain access to
the network and programs. Additional training can be
arranged through the training coordinator.
A best practice is that the user sign an acceptance
form for the equipment once it is delivered. This form
should be recorded or kept in the users personal HR
record, so that the equipment can be duly retrieved
when the individual leaves the organization. Also,
processes should be in place to prevent intellectual
property from leaving the enterprise with an
individual, and to wipe company or departmental
information before cascading or disposing the asset.
Return of equipment
Delivered equipment that is faulty or that does not
match the purchase order should be returned to the
supplier and should not be added to the asset register
or paid for.
12
Stage 2: Asset change
management process
This stage assimilates every change that occurs during
the lifetime of an asset, referred to as IMAC. Because
every change represents a cost to the organization,
the asset management helps determine if the change
is cost effective or business effective. The different
concerns in this stage include:
When changes occur
Changes will occur when they are allowed to by the
organization in the majority of cases, but certainly
not always. Though it is extremely unlikely that rules
and restrictions will be powerful enough to verify that
every user follows them, allowing unrestricted change
to occur can divert key staff and finances away from
business development.
Change situations
IMAC processes take place under a formal change
management process, as defined by the Information
Technology Infrastructure Library (ITIL), for larger
projects such as a refresh, or as a solution to
an incident.
The goals of the IMAC process are:
To enable control and accountability for updating a
server or end-user environment
To preplan a change event or just-in-time point
service
To reduce the amount of shadow support within
the enterprise, which can allow rogue activity
To build a database that will help define trends to
repairs as a feeder to the technical review process
for creating catalogs of approved products
Figure 6: The typical asset change management process (stage 2)
Allocate
equipment
to user
Typical asset change management process (stage 2)
Training
(where necessary)
Service
User receives
equipment
In use
Change
occurs
Operations
One of the fallowing
changes may occur
User leaves
company
Changes job
Maintenance
(beyond economical
repair)
Cascade operation
Changes location
PC upgrade
Asset manager/
asset team
(monitor process)
Approved
change?
Report change
(await decision)
No
Yes
Amend asset
register
User details:
location cost
center
IT administration
Return used
equipment/
prepare to
allocate new
Return
form
Personnel/HR
department
Write off
(as necessary)
Equipment
write-off process
Lost, stolen,
or damaged
Notes:
1. A variety of changes could occur, of which
the most likely are listed above.
2. The responsibility for adding, amending,
or checking the asset register (CMDB) lies
with the IT administratornormally the IT
technician.
3. The person making the change is responsible
for amending the asset register prior to the
release of the equipment.
4. The return form must be completed when
an item is surrendered. This is sent to HR.
5. The asset manager monitors the process but
is also responsible for the accuracy of the
asset register.
13
Cascading
Cascading refers to the movement of PCs within an
organization. The latest-specification PC is allocated
at the top of the organization, and receivers pass their
PCs to the next in line. This continues until, at the lower
end of the staff structure, one of the cascaded PCs is
at the end of its planned life and is terminated.
The positive aspect of cascading equipment is that
you can enable the person with the greatest need for
speed and memory to get the best equipment in the
organization, so that the organization makes the best
use of a new machine. This is cost effective as well as
business effective.
Consider the alternatives:
Give a new high-end PC to the latest recruit: This
would be a waste of a high-end resource, if the
latest recruit only requires a low-end PC.
Provide junior staff with low-end PCs: The
procurement of low-end PCs is a poor investment,
since the pace of change will render these machines
unusable within their lifespan, requiring costly
upgrades or replacements.
It must also be recognized that the cost attached to
each cascade is significant, since it involves a number
of actions usually performed by IT staff.
The best practice is therefore to split between the two
optionsto cascade or notand limits cascading
to situations where business benefits suggest that
the financial and resource costs are justified. Here,
depreciation of equipment must also be considered.
If equipment is terminated within its planned lifespan,
the cost is likely to be high.
Process accessibility
To enable staff members to be aware of the process
and follow an agreed procedure, it is necessary to
publish the processes for the entire asset management
lifecycle. Employee self-service solutions allow all
employees to check the processes from their desktops.
To highlight their responsibilities, staff members must
be asked to sign an acceptance form where their
responsibilities are clearly stated when they receive a
new item.
Record all changes in the asset register
All changes must be recorded in the asset register
before releasing the equipment. Because staff
members tend to feel that the role they are performing
is more important than the data-recording element,
the best way of facilitating changes to the asset
register is to allocate responsibility for the change to
the allocator. Throughout each process, role-based
accountability is critical to the success of ITAM.
Figure 7: Cascading of assets
Cascading can occur where an asset is passed to a different user during the course of the assets designated lifetime. A cost is incurred each time an
asset changes to a different user.
Cost
Cost
Cost
Cost
Cascading of assets
Asset
Cascade to
different user
Cascade to
different user
Cascade to
different user
Termination
of use
It may be acceptable to
cascade an asset, but it
must be recognized that
costs are incurred.
Asset lifetime
14
Policy
There should be a clear policy on what changes
are acceptable and what action will be taken if the
organizations procedures are not followed. Because
consequences are difficult to define holistically due to
differences in cultural and political landscapes, it is
important that the core team, with backing from the
key stakeholder, clearly communicates ramifications.
The ITAM marketing plan should focus on the value to
role-based staff, key stakeholders, peer sponsors, and
end users.
Service desk
The service desk, often known as the help desk, has
an important role to play in the management of IT
assets. Its primary role is to act as the point of contact
for problem management, incident management,
and service-level management. It can also act as an
ongoing audit system. Whenever a call is received,
the staff should check the users name, PC asset
number, and location with the information shown on
the screen. A quality, automated service desk system,
such as HP Service Manager, provides a full range
of integrated options, making help desk functions
efficient and easily managed. This knowledge is
critical to meet expected SLAs and operational-level
agreements, and increase customer satisfaction.
Accuracy of data
Accurate data in asset management means possessing
knowledge on what equipment you have, where it is,
how well it is working, how much it is costing you, and
whether it is doing for the business what you intended
it to do. The accuracy of this data, or lack thereof, will
play an important role in the key stakeholders, peer
sponsors, and end users perception of the success of
the ITAM program.
A best practice is to have regular audits of the
database and work locations. While physical or spot
audits identify unused or discarded equipment, the use
of an automated inventory discovery tool, such as
HP DDMI, helps locate equipment that has been moved
or swapped and has not been recorded in the asset
repository. The core team must adopt a three-way
match process that matches the accuracy of a scan,
spot audits, and the repository.
Quality assurance
There should always be quality assurance checks
on any work area, whether it is a service area or
management-monitoring scheme. A regular review
of systems and procedures should be undertaken.
These reviews should recommend improvements
wherever necessary.
Figure 8: Feeding the cascade of IT assets
User Requests PC Approval and
ordering process
(see flowchart)
PC received IT technician call
received through
service desk
IT technician
configures new
PC on users desk
New PC
configured
Cascade begins
Old PC passed to
new user (above
process begins again)
Good practices suggest that cascading is appropriate in order to
provide power users the most advanced equipment; it should be
avoided unless good reason can be given. Cascading attracts hidden
costs throughout the process and diverts IT resources away from
projects. Savings can be gained by limiting cascading to business
beneficial cases. The greatest savings are normally gained by a user
keeping the same PC until end of the lease.
It is essential that the asset register (CMDB) is amended as soon as
a change occurs. This is sometimes neglected. The IT asset manager
is responsible for managing the process , but an automated
discovery tool is required for the process to be successful.
Decision made by
manager regarding who
should receive old PC
15
Legal requirements
Legal requirements for an organization exist
particularly in the areas of software licenses and
contractual issues. The use of all major business
systems relies on the payment for these licenses and
legal contracts with suppliers.
Contract management
For the purpose of asset management, it is also
important to be aware of contract information
and defined termination or replacement dates of
every IT-related item. The discipline and process
around contract management is critical in enabling
full lifecycle management. Contract management
aims to enable understanding of contract legalities,
control and leverage the terms and conditions on
the organizations behalf, and manage the costs,
condition, warranty, maintenance, and utilization
of assets.
Planned maintenance of buildings, plants, and
equipment is considered essential to successfully
building operations, particularly in respect to
avoiding service breakdowns and reducing reactive
maintenance or emergency repairs. Maintenance
contracts, along with insurance and lease contracts,
come under the purview of contract management.
Software asset management
Software asset management (SAM) is the process by
which an organization plans and manages software
licenses, software assets, and entitlements to enable
software vendor management and software compliancy.
SAM aims to facilitate control and accountability for
spending at the department level, proper software
entitlement, software license compliancy, and
contracts, based on actual need. All aspects of
inventory management are also involved.
Operational cost control
Operational costs can be easily monitored and
reported on, provided the appropriate software tools
are in place. It is prudent to maintain a good ongoing
view of the operational costs so that trends can be
identified as they occur, rather than at the end of a
period, when it is often too late to act.
Financial and allocation management
Financial and allocation management are different
disciplines and processes but are closely related. ITAM
plays an important role in positioning the enterprise to
create a vehicle for chargebacks or allocations.
Financial management is the process used to
holistically manage the financial aspects of an
organizations real and personal property assets from
a cost, depreciation, and budgeting perspective.
It enables expense control, accountability, and
auditability for financial asset tracking as it relates to
compliance and the general ledger/fixed asset view.
Allocation management is the process used to plan
and manage cost allocations across departments for
asset procurement, maintenance, and related services.
It enables control and accountability for spending at
the organization and department levels, based on
actual need. It also helps reduce waste and increase
efficiencies in spending and usage assets and services.
16
Stage 3: Asset disposal and
replacement
Termination or retirement management involves
planning and managing the execution of retiring
assets from the enterprise. It enables control and
accountability for the retirement of organization-owned
assets, guided by both financial and physical goals.
Termination and disposal
Unused assets are difficult to track because they are
not connected to the network. So, to enable effective
asset tracking and avoid surplus, any increase in
the asset stock should be countered by an exit or
retirement linked to the acquisition. In simple terms,
new equipment in should lead to the old
equipment out.
The disposal process must adhere to environmental
disposal norms of the concerned country. A decision
also needs to be made about whether a replacement
item needs to be ordered. As mentioned earlier, the
replacement cycle has moved from a five-year norm
to an upper limit of two years for more progressive
companies, and a general upper limit of three years.
The termination of equipment can happen at any point
in the use of an item, especially where damage, loss, or
theft is the cause. Another important termination function
is the action to be taken on end-of-lease contracts.
Penalty charges for late return of equipment can amount
to considerable sums and should be avoided.
The core ITAM team defines the processes and
methods of disposal, where the common disposal
types include:
Lease return, if the asset is leased
Employee sale, which is not considered a best
practice, as the employee-buyer may continue to
lean on internal support for the life of the asset,
once acquired
Donations, not necessarily for any tax benefit, but as
a philanthropic act
Cannibalism, where the components are extracted
for the parts inventory after considering costs
Scrap, where disposal is in adherence to company
security processes to mitigate any environmental
protection risks, including those that could lead to fines
A best practice is that a third party is contracted in the
case of employee sale, donations, or scrap disposal
to make sure professional data cleanup or disk wiping
occurs and governance measures are maintained. The
best practice process for terminating assets can be
automated using HP software tools to enable a faster,
more effective operation.
Allocating responsibility
There are two levels of responsibility: overall
responsibility and responsibility for actions to be
taken. Each key action must be assigned to a member
of staff to clearly define responsibility. Responsibility
for an action does not necessarily mean that the
person given the responsibility actually carries out
the action.
Suitability for role
Often roles are determined according to job title.
Suitability for the roles, in terms of the most trained or
qualified, can sometimes be disregarded in favor
of availability.
Training
Each staff member should be trained to understand
how to carry out the assigned responsibility, as well
as where his or her responsibilities fit into the
overall process.
Process and procedural documentation
It is essential that staff has easy access to
documentation that shows what, how, and
when actions should be taken and by whom.
Documentation, including process maps, should be
easy to understand.
Replacement
A best practice is that replacement should be planned
and should not happen simply as a consequence of
an item suddenly ceasing to function.
Return of equipment
Existing staff, during re-issue, should return equipment
to stock or send it for termination. This equipment
should be removed at the time of issuing the new
equipment and a return form completed, with a copy
sent to HR to amend their records. This action can be
automated through the use of HP systems solutions, and
it is possible to link the asset management system to
the HR system. It is usually the persons manager who
is asked to be responsible for the return of equipment,
which might be re-allocated to a new employee.
17
Where no IT asset management system exists
The absence of an asset management system can
have the following ramifications:
Costs
TCO is difficult to calculate, so the true cost of owning
an asset is often not known, because TCO is required
in order to ascertain which assets provide the best
value and which ones should be avoided in future.
Organizations without an asset management system
fare poorly in comparing assets for this purpose. This
results in costs easily spiraling out of control.
This apart, even the other consequences of
not havingan asset management have cost
disadvantages attached.
Wasted resources
The organization can face difficulties whenever it
wants to implement any new process. Resources are
dedicated to identify the location and ownership of
missing assets, and to update chaotic databases.
Lack of order
Organizations are reluctant to write off missing
equipment because they believe it may turn up at
some point. There is an embarrassment factor because
they do not wish to admit that their records are not
accurate, or that their costs in respect to assets are
not in order. This situation arises due to pressure from
within the organization to acquire new equipment
quickly, whenever required, without being concerned
about removing old or end-of-use equipment.
Inaccuracy
Accurate data should be held and maintained. This
applies to any items that are deemed to be assets of
the company, although IT assets tend to be the cause
of the highest anxiety, because the equipment is often
portable and costly.
Business inefficiency
Typically, organizations often do not know:
What assets they own
Where the assets are
Who is using them
How well each asset is working
If each asset is contributing to the business goals
as expected
Termination dates
Contract terms and conditions
What software licenses are on PCs
What software is in use
If software license compliance is adhered to
Warranty details
Hardware and software upgrades that are
unrecorded
TCO
18
Evolving an IT asset
management system
Levels of maturity
HP believes that asset management is an evolutionary
process. An organization cannot achieve the highest
level of maturity until a number of processes are
created, tested, and implemented. Adopting a
planned, phased approach to ITAM best practice
improvement can make the transition more predictable
and help optimize the outcome.
To understand where you are on the road to ITAM
best practice maturity, it is necessary to undertake an
assessmentideally a self-assessment, overseen by a
specialist consultant such as HP. Once the assessment
establishes which stage you are in, acceptance of the
situation leads to a faster path in determining your
desired state and the next steps to get there.
Each of the four stages of evolution is characterized
by distinct factors, as follows:
Stage 1: Chaos
Significant asset management issues
Some areas of business process in a chaotic state
The level of management and much below the
organizations desired state
Maverick buying
Inability to measure risk
Inability to discover or track assets (physical
or virtual)
Stage 2: Reactive
Implements automation through enterprise
discovery tools
Takes the first step toward matching discovered
asset data with basic portfolio data within the
asset repository
Implements user request management catalogs and
tools to help IT gain control over standards
Identifies the users options for standardization
Implements expense attribution
Enforces standards
Enables effective contract management
Stage 3: Proactive
Integrates contract and financial information with the
asset repository for full transparency into that aspect
of the assets life
Implements more complex reporting and acquires
the ability to consider managing chargebacks or
allocations to the business units
Implements automated request management
Articulates IT value
Lack of reconciliation of asset request to receipt exists
Stage 4: Optimization
Attains full transparency of the entire lifecycle,
including all contract and financial implications,
as well as the assets relationship with
service management
Optimizes business intelligence to transform the IT
infrastructure into what HP describes as optimal IT
Identifies opportunities to standardize
Aligns IT with business objectives
Ascertains service value
Identifies breaks in processes
Periodic assessment can help you analyze where you
are against where you want to be. This will determine
the next steps and a practical roadmap for moving
forward, using process development and
software tools.
Getting startedthe key initiatives
To lay the groundwork for a sound ITAM initiative,
following some foundational philosophies help you
make a good start. These principles apply not only
to new initiatives, but also as a checklist for those
restarts that are common around ITAM projects:
Obtain executive sponsorship
Obtain peer support
Appoint an IT asset manager
Create, approve, and start to implement a strategic
implementation plan
Determine ITAM processes
Select a software management tool and
autodiscovery tool
Implement all of the above
Enable ongoing quality assurance
19
Benchmarking your performance
The benchmark is a record of factual cost and
position at a given point in time, and enables a set
of comparisons for past and future reference and
assessment. The challenge is often in figuring out how
to know the status of your asset management initiative
in a business environment, at any given point. The
solution lies in:
Monitoring
Along with an automated inventory discovery tool,
a physical audit carried out on a periodic basis
helps identify and record equipment not linked to the
network, especially equipment no longer in use. In
addition, HP recommends implementing a three-way
match scenario that utilizes spot walk-around audits
and a process that reconciles the spot audit to the
repository and the automated scan.
Measuring
Key performance indicators (KPIs), commonly obtained
and monitored during the course of management
reporting, can be critical success factors. KPIs are
factors identified by organizations as being significant
measurements of their business performance.
These are regularly monitored and reported at a
management-team or board level, not only as a means
of measuring performance, but also a means to detect
early warnings of market changes.
Based on the measurements, SLAs for infrastructure
management services and processes can be defined.
These SLAs can be used to specify asset management
services to internal and external customers.
Assessing
This provides the opportunity to compare your
company against industry best practices and assess
your current status across a range of functions against
average maturity levels in the industry.
A facilitated self-assessment workshop can help you
review your ITAM processes against the best practices
identified by HP, based on more than a thousand
implementations of asset management projects at
enterprise IT sites.
Using a collaborative approach based on group
discussions with managers and users, HP establishes
an environment that fosters teamwork and open
communications. The assessment uses the HP Asset
Management Process Framework. The framework
was developed and is based on industry best
practices, including ITIL standards for software asset
management.
On completion, participants gain an excellent
understanding of ITAM goals, best practices, and
benefits, as well as the ability to use the framework as
a model to create action plans.
Analyzing decision and actions
Processes must be in place to help you determine how
well or badly you are performing as an organization
with respect to managing assetsas a direct result of
the decisions that the organization has made and the
actions it has initiated.
Further, business intelligence can help in determining
future decisions and actions. In simple words, it is the
ability to use current data and run what if scenarios.
Here, relational data helps determine the best use of
resources as well as the future of those resources.
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Creating a business case
This helps justify your case when you have made
decisions favoring significant investments. What
is required here is the input of accurate financial
information and the ability to accurately analyze the
data and compare this against best practices.
HP has developed several financial analysis models
to assist organizations in developing the proper
business case for either initiating or expanding an
asset management project.
A useful tool that facilitates this process is the ROI
calculator, which makes use of financial analysis
to evaluate a given project. Financial analysis is
performed by calculating the costs and benefits of
the project, and by using the concept of time value
of money.
Conclusion
While many CIOs lack credibility with their
organizational peers and sometimes even with those
to whom they report, these relationships can be
improved if CIOs credibly answer four asset-related
questions that are critical to running a successful
business. It goes a long way to build creditability
if IT is able to communicate to others what assets
are owned by IT; what the return is on those assets
and how that return is being improved; how ITs
investments compare with those of competitors; and
lastly, how IT is managing the risks associated with
its assets. The only way to get there is to have the
right technology, right people, and right processes
working together to achieve that level of transparency,
benchmarking, and governance. HP has long been
and continues to be a leading provider in both the
technology and best practices necessary to provide
the CIO with the tools and data needed to create and
communicate amazing results.
Copyright 2009, 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only
warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein
should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.
4AA2-6525ENW, Created May 2009; Updated February 2011, Rev. 1
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