The leaders of most organizations have a complex array of decision criteria to balance building for business growth and strategic cost cutting. At this point, the tactics for reducing the costs of business such as delaying projects and downsizing have been done. Where is their next source of savings originating within the enterprise? If your organization has an inventory-only approach to the management of IT assets, then IT assets are an untapped reservoir of ongoing savings awaiting executive support. Without executive support, it is likely that IT asset costs are not available, either because they aren’t managed or because there isn’t confidence that there is an alternative to the chaos that exists in the IT realm. The answer is an IT Asset Management (ITAM) program that manages the assets from a business perspective and directly links IT spend to the organization’s goals.
ITAM is a set of business practices that incorporates the pro-active management of IT assets across the business unit silos within the organization, joining the financial, inventory, and contractual responsibilities that are often compartmentalized in an organization without ITAM. The mission of IT asset managers is to maximize benefits while minimizing risks from IT assets in their organizations. According to an International Association of IT Asset Management (IAITAM) 2011 survey, for those organizations that have ITAM programs, over 50 percent have tasked their IT asset managers with uncovering more savings. Over 70 percent of the respondents were involved in software compliance management, another major source of savings through audit avoidance and strategic buying practices. These organizations have placed long-term employees (over 70 percent have been with the organization five or more years) in these roles to gain savings results that occur with seasoned professionals such as:
- Increased homogeneity in the asset pool, reducing security concerns, establishing standard configurations, and reducing support costs
- Substitution of redeployed assets to fulfill a request, eliminating over-purchasing
- Vendor and contract management that streamlines agreements to match the needs of the organization and gain more favorable contract language
- Software compliance management, reducing the financial consequences of an audit as well as number of audits
- Decreased costs of remediation for accountability, data security, and privacy legislation through processes, policies, and transparency through accurate data
IT Asset Management creates a management view of the IT portfolio, the second most expensive budgetary line item in many cases within the organization behind employee costs. Organizations with ITAM programs assign responsibilities to IT asset managers in the following areas:
The above table corresponds to the key process areas defined by the IAITAM that allow organizations to achieve significant savings and reduce risk throughout the lifecycle of IT assets while in the custody of the enterprise.
IT Asset Management succeeds because of a strong focus on policies, processes, outcomes, roles, responsibilities, and goals. Implementing best practices happens over time, taking advantage of the strengths of the organization and shoring up weaknesses that were invisible without a global view of assets. The classic departmental structure is a roadblock to maximizing the value of IT; a centralized ITAM program approach eliminates that roadblock. For example, the ITAM contribution to technology acquisition includes:
- Request and approval processes, which includes application of standards, redeployment and initiating a purchase if appropriate, and an expense policy that supports executive control of the IT environment and spend
- Vendor management, which includes level of management, communication and other policies, internal feedback, scorecard process to improve data for tactical and strategic decision making regarding vendor relations, and product choices
- Formal acquisition selection processes, contract negotiations, and contracts execution that reflects organizational, department, procurement, and IT rules
- Documentation management, which includes verifying proof of purchase documentation, retention, linkages between documentation, and specific assets to eliminate expensive compliance projects
- Receipt, initiating payment of invoices and creating an incident to configure and deliver to the correct individual/location/department, finding errors, and eliminating expensive mistakes
Repeatable, sustainable reduction of inappropriate spending is squeezed out through the processes, roles, and policies that govern the acquisition of IT assets. This diligence ensures that the acquisition is obtained at the right price and with the best legal language. A financially focused IT person like an IT asset manager has the advantage of a shared vocabulary and working relationship with the finance, legal, and end user departments. Where service management has failed to eliminate the IT-to-business gap of trust and common goals, IT Asset Management completes the transition, closes those gaps, and returns true value back into the enterprise.
In addition to closing gaps in processes and across the hierarchy, ITAM provides a new twist to the measurements already provided to management. Multi-departmental responsibilities yield a fresh view of measurements that identify areas for savings. Measurements such as TCO (total cost of ownership) are created with improved data and deliver results that are closer to the actual. Baselines and measurements of change are no longer restricted to the performance numbers from IT and the cost numbers from the budget owners. Assessment of internal processes and vendor delivery requires data and the ability to interpret beyond the silos of individual process steps. ITAM professionals measure customer satisfaction, the vendor’s compliance to the contract, usage, and strategic impact to support the organization.
Specific suggestions for executive actions that empower ITAM financial savings are:
- Firm up the policies regarding purchases. Distributed control that includes IT so that IT purchases can be expensed under a certain dollar figure undermine all savings opportunities as well as governance efforts.
- Negotiate more, especially software agreements. Opportunities are routinely left on the table. Obtaining a discount is a step and not the end of what should be received. The vendor management that is part of ITAM measures and manages the vendor relationships to gather the most information for leverage and also builds the value proposition for both parties.
- Increase visibility into the asset portfolio, eliminating over-purchasing through lack of information and under-purchasing that leads to software compliance penalties. Visibility reduces support and security costs as well.
Executives should demand an ITAM road map that delivers measurable savings in the short and long term and tracks the progress over time. ITAM goals are ultimately driven by the goals of IT, other departments, and the organization itself. Since the goals are varied and the processes involve individuals from different departments, working together for common goals in support of the enterprise, it takes a program structure implemented as a core competency to deliver value through ITAM. IT Asset Management business practices have a great deal to offer to IT, business units, and the management of the organization itself.