A Best Practice Guide for IT Asset Management

5/26/2018 A Best Practice Guide for IT Asset Management

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IT asset management

A best practice guide for IT asset management

Business white paper


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Table of contents

Executive summary....................................................................................3

Introduction.....................................................................................................3

The growing necessity to manage and control assets....4A synopsis on how an IT asset management solution

can help......................................................................................................4

IT asset management defined............................................................6

Inventory discoverya vital component of IT assetmanagement............................................................................................6

Clarifying what does not constitute IT assetmanagement............................................................................................7

IT asset management fundamentals............................................8The asset management lifecycle.......................................................8

Stage 1: Asset request and procurement.................................9Stage 2: Asset change management process....................12

Stage 3: Asset disposal and replacement...........................16

Evolving an IT asset management system..............................18Levels of maturity...................................................................................18

Getting startedthe key initiatives............................................18

Benchmarking your performance...............................................19

Conclusion.................................................................................................20


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Executive summaryToo many CIOs lack credibility with their peers whoare line-of-business managers, and too many frustrate

their CFOs, their COOs, and their CEOs because theycannot answer four questions that were long consideredfundamental 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 investmentscompare with that of our competitors?

What risks do the assets create for the business, andhow 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 valuethose IT components provide through reducing costs,enabling revenue streams, creating options for growth,and proving compliance. So how do CIOs translatethe performance of IT assets into something the CEOcares about? How do they then prove that they aremanaging those assets, not only to provide a goodreturn to the business, but a return that is higher thanwhat is being generated by competing firms?

This paper shows how IT asset management (ITAM)

enables the CIO to answer these basic questions tothe satisfaction of the CFO, COO, and CEO. ITAM,which comprises processes, tools, data, and people,manages the entire lifecycle of an IT asset and socan not only answer the question what assets acompany owns, but what assets it expects to soonown and what assets it expects to soon dispose of.

Because ITAM collects, aggregates, and trackscosts of every IT asset and can logically map Ito business and IT services, ITAM is able to cothe cost information necessary for determining

return to the business on any given IT or busineservice. ITAM can then increase those returns teffective vendor and contract management. Larisks associated with IT assets can be articulateand managed because ITAM manages the legobligations associated with vendor warranties support commitments, entitlements, and asset d

IntroductionThe perception of IT has evolved from being a center to a business enabler, prompting escala

investments in this area. As a result, ITAM hasassumed high priority in optimizing financialmanagement and enabling business alignmenthas prompted HP to augment a comprehensiveof solutions, including best practices, for manainfrastructure throughout its lifecycle.

To manage an asset effectively, it is important tounderstand the total costs associated with that aand how it supports critical business services thits lifespan. This is referred to in terms of total cof ownership (TCO). TCO is inherently valuableanalyzing and understanding the costs associa

the assets life as it relates to budgeting, allocataccounting, and service valuation.


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The growing necessity to manageand control assetsThe key factors that compel you to consider a betterway of handling your IT assets include:

Cost

With the provision of reliable, flexible, and state-of-the-art infrastructure being a key determinant foremployee efficiency and competitive advantage,

change is a given. But change comes at a cost,TCO, of which the purchase cost or the up-frontcost accounts for only 4 to 20 percent. As theremaining TCO covers the entire lifecycle costs ofthe equipment concernedincluding installationcosts, change management costs, maintenance,upgrades, virtualization, service or help desk costs,and disposal costsarriving at an accurate TCO canbe challenging. In addition, it is impossible to optimizeyour infrastructure investments if you dont know whatassets you have and how they are utilized to supportcritical business services.

Dependency

With IT enabling your global business operations tofunction on a 24x7, follow-the-sun service policy, ITinfrastructure is too important to be left unmanaged.ITAM will play a crucial role in helping IT add valueto your enterprise growth strategy, going beyondproviding mere utility value. Understanding all ofthe asset upstream and downstream relationships iscritical to dealing with the impact of change effectivelyacross heterogeneous infrastructures.

Hardware replacement

The pressure to stay competitive and the fast pof change in both software and hardware havprompted organizations to update IT hardwarea regular basis to process larger, more complisoftware. Hardware is now replaced every yeaor two, as against once every five years, with tmaximum life of the equipment hardly crossingthree-year period.

Tax efficienciesTax liabilities on IT assets exist in some countrieTherefore, it naturally follows that efficientmanagement of all assets is important, becausproduce significant savings over time.

A synopsis on how an IT assetmanagement solution can helpThe path to sustainable market leadership demthat you seek savings and efficiency gains withcompromising on regulatory compliance in mayour IT assets. Given these dynamics, a qualitymanagement system should include asset-trackcapabilities to help you plan, manage, disposeand replace equipment effectively. But assetmanagement is much more than this. A strong management solution must have capabilities incontract management, license compliance, andfinancial management.

Figure 1:Ask yourself these questionsThese five fundamental questions demonstrate the scope and dimensions of effective infrastructure management. If the answers are not knonot available, then HP can help you.

How well is itsupportingyour business?

What do you have?

Where is it?

How well is itworking?

How muchis it costing?


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Earlier, the value of purchased assets used to bewritten off at the end of their life. Today, becausehardware is replaced at a faster rate, the equipment

reaching end of life still has significant value. But tobe able to sell the asset, you first need to locate itand establish its present value, which is usually setaccording to processor speed and memory. Besides,the ability to control the flow of software throughoutan organization can be a difficult task. Consistentbest practices need to be in place to make surethat compliance can be met and maintained on anongoing basis.

In case of leased equipment, the failure to return theequipment at the end of the agreed lease periodattracts substantial penalty charges. Here, the

challenge is to quickly locate equipment that has beencascaded within your organization.

No matter which procurement route you choosepurchasing or leasing assetseffective ITAM helpsenhance cost efficiency.

Most businesses log the first user of the equipment butfail to track the changes that occur during the life ofthe equipment. These changes include installation andremoval of software, addition of memory or a largerhard disk, or re-assignment of the physical asset toanother user. As a consequence, the asset is lost

or may require the acquisition of additional softwarelicenses. This makes ongoing asset tracking a criticalfeature of a quality asset management system.

Added to this, the linking of contract information, suchas leasing/replacement dates, insurance contracts,and maintenance agreements, is valuable ITAMbecause it provides true historical costs associatedwith all items.

To enable clarity on the decision to purchase oITAM also enables the asset manager to perfolease versus buy analysis, based on usability m

Consider that while lease rates may look attracthe first year, the TCO can exceed actual purchcosts. Besides, those same rates may not look attractive in three or four years, because you wpaying for what is likely to be obsolete techno

Integration is another key aspect of an ITAM soA quality ITAM solution will link with other elecdata sources, encompass the complete asset lifand enable e-business opportunities. The use oa procurement system is also useful in integratiinformation and speeding up the procurement

In a nutshell, building a discipline and culture aITAM can result in an organizations ability toaccomplish the following:

Introduce virtualization and maintain complia

Manage the TCO of a business service

Maintain a competitive edge

Enhance operational productivity

Implement consistent and repeatable process

Reduce costs, specifically costs related to cha

Manage asset utilization effectively and releacapital back into the organization

Improve bottom-line profitability Increase service-level agreements (SLAs) and

result, customer satisfaction

Manage IT in financial terms and accountabcharging back for utilization of services


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IT asset management definedInventory discoverya vitalcomponent of IT asset managementInventory discovery is broadly classified as physicaland automated. For more accurate findings, usingboth these methods is recommended:

Physical and virtual inventory discovery

Equipment can be discovered through physical auditsor by using existing information to help reconcile theasset management database.

Consider this example: Assets are usually allocatedto a member of staff. To check whether staff recordsare accurate, reconcile them with HR records or, even

better, against payroll to confirm all current staff.Where staff has left the organization, there needs tobe an amendment to the data on the asset repositoryand, more importantly, a process in place to trace anyequipment allocated to a former employee.

Automated inventory discovery

The best approach for tracking IT assets is throughan automated inventory discovery product thatuses a combination of agent-less and agent-basedcapabilities. Combining different discovery techniquesenables a greater number of assets to be discoveredand tracked over their lifecyclesquickly and

reliably over time. Ping, reading of Dynamic HostConfiguration Protocol and router Address ResolutionProtocol caches, and other standard methods can beused to achieve this goal.

The other decisive factors of an effective automatedinventory discovery product are:

Should provide high-quality data for a moreaccurate presentation of results

Should be able to monitor the network, withostraining the network with ongoing scanningoperations, to discover assets assigned to mousers or cascaded within the organization

Should track software utilization because thisinformation can be used to optimize the costsoftware licenses

Should be able to track both physical andvirtual assets

Should have hardware recognition capabilitiwith data provided in the same format acrosplatforms to be able to normalize data wherpossible

Should have detailed software recognitioncapabilities to compare discovered data with

contracts stored in the asset management sysHP offers Discovery and Dependency MappingInventory (DDMI) software to support automateinventory discovery. The DDMI software combagent-less inventory of the IP environment withagent-based hardware and software inventorysoftware utilization to enhance data accuracy, dictated by best practice guidelines. It employshardware and software recognition along withresearched, accurate data collection mechanismake sure that the data it collects is of high quThe DDMI software also provides out-of-the-box

integration with HP Asset Manager software.Though automation is key to reducing the cost management and tracking, it cannot be solely on as it has its limitations. Auto discovery can find assets that are not connected to the netwocan it identify true ownership or entitlementassets not discovered.


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Clarifying what does not constitute ITasset managementThe first step to explaining ITAM is to spell out what itis not. Many companies assume that they have asset

management systems in place, simply because theyhave any or all of the following:

A discovery tool

Most organizations that have the ability todiscover physical assets believe they have an assetmanagement solution in place. What they fail tounderstand is that asset management is not justdiscovery, but also the tracking of the physical,financial, and contractual information about theasset as it changes throughout its entire lifecycle. Adiscovery tool cannot do any of this.

Physical inventory databaseThis is highly accurate, but time sensitive. As soonas the inventory data is recorded, it is potentiallyoutdated due to moves, adds, and changes thatare constantly taking place in the infrastructure. Inaddition, typical physical inventories focus only onhardware and software configuration information.

In most cases, organizations do not include the researchnecessary to tie financial and contract information to theasset with this method. The need for physical inventoriesis usually driven by an event such as a true up forlease or insurance purposes, or a critical event such as

an acquisition, refresh, or mass upgrade.Assets spreadsheets

Asset spreadsheets are pervasive throughout manyenterprises at the business-unit level. They are usuallyused to track assets for getting some transparency intobudgeting, but also for security or intellectual property

purposes. Because the spreadsheets are createmaintained by each individual business unit, tha lack of discipline and standardization in formand naming conventions for the fields being traThis makes it virtually impossible to gain an en

view in any consistent form.Fixed asset systems

Most financial professionals prefer the fixed assystem as the system of record, because it relabook and tax implications. It is of little help, thwhen it comes to the day-to-day operations of gain a view into the assets TCO. It does not facosts associated with the asset during its servicinvolving install, move, add, and change proce(often referred to by the industry term IMAC). Tsystem only records acquisition and disposal cwhich almost never account for more than 25

of the assets TCO.

Clearly, the fixed asset system cannot be used athe system of record for ITAM. A best practice iintegrate the IT repository with fixed asset systemenable accuracy throughout the equipment lifecand support audits, such as Sarbanes-Oxley (SOcompliance audits. Ideally, the asset managemesystem should actually create and update fixed based on important events, such as acquisition adisposal. In addition, the asset management dashould be used as a subledger of information, sentire configuration is tracked against the high-lequantity-based solution of the fixed assets regist

Figure 2:Management challengesFrom the IT point of view, managing IMAC processes is seen as an uncontrollable part of the asset management lifecycle.

New asset entering

Catch pointincoming configurationand receiving

Catch pointin-servicelifecycle (IMAC)

Catch pointout of service

Reconciliation and auditing


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ITAM is not just about storing data though. It aextends to functionalities such as:

Deploying the stored data successfully to opeand synchronizing tasks

Automating procedures, which is vital in thecoordination of large-scale projects

Empowering operators in their daily tasks

Reducing the risk of double entries and humaby collecting data throughout operational pr

The ultimate goal is that each employee has threlevant information in the most appropriate foat the right time. Once the data is captured, thinformation can be used for management repofinancial reporting, auditing, and planning purData can be linked between systems, usually ua single source of data, rather than unnecessaduplication of the same information in multiple

The asset management lifecThe asset management lifecycle covers the per

from initial request for an item through procuredelivery, stocking, deployment, monitoring, supinstallation (as well as all moves, adds, or chanlocation), upgrades, reuse, termination, disposreplacement.

The wide-ranging factors under asset managemhave been classified using a simple, three-stagformat. This is to help you understand and manwith ease the best practice methodology in assmanagement. The critical aspects of the cycle, a data accuracy perspective, include request aprocurement at the front end of the cycle and d

at the back end. The asset changes that take pin between.

IT asset management fundamentalsNow that the false assumptions about ITAM have beencleared, the next step is to define what it comprises:

A holistic asset management discipl ine

Asset management is the integration of the physical,financial, and contractual attributes of software andhardware to enable the delivery of cost-efficient, timelybusiness services. As a holistic process, it includes themanagement of the assets identifiers, components,

support and warranty dates, costs, contractassociations, and all events associated with the asset.

Most importantly, asset management is a disciplinethat enables the financial management of IT assets,providing cost-effective stewardship of IT assetsand the resources used in providing IT services. Toimplement a sound asset management system, toolsmust be aligned to processes that are event orientedand traceable. Also, cultural and political shifts musttake place within the organization. To put it simply,without an asset management discipline, assetmanagement accuracy cannot exist, and the ability to

form a configuration management database (CMDB)cannot be established. Organizations must askthemselves, If I do not know what assets I have, howcan I possibly optimize my IT spend?

An asset measurement system

Asset management is a powerful measurement systemthat provides functions ranging from standardizationand budgeting to return on investment (ROI) analysis.

A metric focus is vital for any asset managementinitiative, because, without a baseline for forming yourasset repository, it is nearly impossible to relate theunderlining assets to the critical business services thatare being delivered.

A dynamic assets database

The asset management repository holds all relevantasset 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 upgradeinformation

History

Portfolio/financialmanagement

Request

Procure

Receive

Stock

Deploy

Monitor

Su ort

IMAC

Dispreall

Figure 3:The asset management lifecycleThe complete asset management lifecycle spans from request aprocurement to disposal or reallocation.


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A best practice is that large organizations shouldappoint an asset manager with direct access tothe management team to be able to implementeffectively the guidelines for realizing a sound assetmanagement system.

Stage 1: Asset request and

procurementThis stage includes every aspect of acquiring anasset, from initial request and selection to arrival andtraining the user to begin operating the IT-relatedequipment. The two broad processes in this stageinvolve user management and the approval process.The key elements of user management are as follows:

User requests

The user requests an item through an approvedperson, group, or e-procurement system. The requestcould be submitted through a service catalog or a

Web-based request solution. The request is thensubjected to best practice approval workflows toenable control and accountability for spending andstandards. At any stage of the approval process, theuser should be able to find out the actual status ofthe request.

The ITAM framework for standardization recommendsthat you limit the choice, for example, to just threetypes of equipment. This would mean that themaintenance staff would only need to keep parts andgain expertise on three machines every year. Eachtype of machine should have a standard specification

that is defined in the product catalog from whichusers select their items to enable a consistent officeenvironment, lower costs, decrease complexity of thesystems, and lower demands on the help desk.

Package or bundled

When a user makes a request, all associated sequipment should also be included. For exampdesktop PC would include a screen, mouse, kedisk drive, CD-ROM, and mouse mat, as well astandardized software packages that are necefor the user.

Software requestThe software requirement should be specified atime of the request. Often this can be purchasediscounted rate as part of the deal. Also, depeon preference, software is sometimes loaded bthe supplier prior to delivery or may be part orequested bundle or standard software imagbased on the users role. These tracking mechaand standard bundles also help control TCO asupportability.

Receiver of the request

A best practice is that the receiver of a requesnew equipment should not be an individual, bugroup or team of people, to provide cover wheperson is out of the office for any reason.

The approval process involves the followingconsiderations:

Budget

It is important to closely monitor the budget. Fato do so is likely to have serious consequencesapprovers and ultimately the organization, dueincreased TCO and supportability.

Figure 4:Keeping it simpleFor simplicity, the asset management lifecycle can be viewed in terms of three stages.

IT asset management processHigh-level process flow

Stage 1IT asset procurement

Initial selection, approval,acquisition, and delivery. Setup and training. Fully readyfor use.

Stage 2IT asset changemanagement

All changes that occur duringthe lifetime of IT assets.

Stage 3Asset disposaland replacement

Termination of use.Environmental disposal. Datawiping. Identification of the

need for replacement.

Replacement


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Avoiding delay

The approval process is often the cause of delays inacquiring new equipment. If the approver is a singleperson within an organization, delays can occurbecause that person has not been able to considerthe case. To avoid delay, an automatic referral of therequest for approval should be sent to a deputy ormore senior approver. This can be set up as part ofthe procurement system. If it is a manual system, acopy of the request for approval can be sent to theapprovers. Also, the procurement team should monitorall requests through regular reports on turnaroundtime. Areas or individuals causing delays should bereviewed, and solutions to the problems should beidentified and implemented.

Stock

Effective asset management processes allow theapprover to check whether a requested item isactually available, avoiding unnecessary purchases.If not, there must be a checkpoint within the changemanagement process to make sure the equipment onorder is compatible with the policies of the enterprise.

One should also check with the change managcontrol board to verify that the incoming orderbe affected by a near-term strategic change worganization.

New hiresTo relieve the pressure on the procurement systnumber of necessary overheads should be assand approved whenever a new hire is approveFor example, approval for a new hire should ina desk, chair, office location, and PC. The HumResources (HR) department should advise procin respect to the new PC. This could mean thatnew PC would be assigned to an existing empand the used PC cascaded to the new employe

Approval denied

When approval is denied, this decision must b

quickly communicated to both the requester anprocurement team.

User choice(limited tostandards)

Softwarerequirements

Submit

request

Typical asset management stage 1 process

User

request

Procurementteam

Approval

Yes

Budget(provision/approvalprocess) No

Deny user

Advise ITtechnician(installer)

Place order withsupplier once approved

Supplier delivery

Advise assetmanager

Equipmentdelivered to site(security to checkdelivery againstdelivery note)

Laptop equipmentdelivered to ITdepartment forimage/software build

Desktop deliveredto office; configureonsite

IT to amendlicense andasset register

Training(where necessary)

User receivesequipment

Old equipmentremoved by IT;amend assetregister; seedisposal process

Security/IT toconfirm satisfactorydelivery type/specification

Finance departmentfor payment

Invoice fromsupplier

Pay invoice

Submit forapproval

Advise networkteam (network

password)

Figure 5:The typical asset management stage 1 processA 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 userprior to release.

4. The e-procurement model simplifies the process. Requests are normally madethrough an online supplier catalog.


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Procurement process

The definition of the procurement process for ITAMpurposes is the process by which an organizationplans and then manages the procurement process.This includes receiving a legitimate request andapproval for goods and services (including standards,definitions, and supplier identification), anddiscounting targets and policies under negotiateddiscounts and contracts. Ultimately, the goal of theprocurement process is to enable the best price for

the best product and service available to meet theorganizations needs, while providing full visibilityto surplus.

Order placement

The order is normally placed with the approvedsupplier. There are likely to be a number of approvedsuppliers, usually one for each type of product. Theservice aspect will include the preferred arrangementsfor delivery and sometimes installation of the equipment.

A best practice to avoid delays in delivery is toprovide advance notice of expectations on deliveryschedules. Delays can further be avoided by putting in

place an e-procurement system that streamlines theprocesses and by engaging in e-business transactionsover the Internet.

Communication

It is important to verify that equipment is tracked fromthe time the order is placed until it is disposed of bythe organization.

Here are the relevant roles of each participant inthe process:

Finance:To expect the invoice and manage thepayment process

Asset manager:To expect delivery and verify thatthe equipment is logged either upon delivery orbefore releasing it to the user

IT technician:To schedule installation and tag theasset with a unique asset-tag identifier as part ofthe goods receiving process. This, along with theassets serial number, should remain with the assetthroughout its lifecycle and be the primary linkage tothe fixed asset system.

Training:To schedule training, if required

Security: To be aware of the impending delivery,

verify that it meets the description and quantitydetailed on the delivery note, and transport theequipment to the appropriate place

A quality procurement system and asset manasystem automates these processes, provides thtags, and monitors the use and functionality ofasset throughout its lifecycle.

Allocation to user

An asset management system provides the wamanager, who receives new assets, with the areconcile received goods with purchase ordersoriginal requests. This is referred to as procurethree-way match.

It is a good practice for the receiver to assign aasset numberallocated by the asset managesoftware solutionto the item on receipt. Someasset numbers are attached by the supplier byarrangement prior to delivery.

The IT technician is responsible for installing ITequipment for the user and making sure that thequipment is fully configured and ready for useasset repository must be correct prior to allocaany equipment. The asset entry should also incsoftware installed. As the information about the

will never be more accurate than it is at this stabest practice is that the asset manager determaccuracy of the asset as it enters the CMDB to a clean start.

Equipment received by user

After delivery, the user is shown how to gain athe network and programs. Additional trainingarranged through the training coordinator.

A best practice is that the user sign an acceptaform for the equipment once it is delivered. Thshould be recorded or kept in the users perso

record, so that the equipment can be duly retriwhen the individual leaves the organization. Aprocesses should be in place to prevent intelleproperty from leaving the enterprise with anindividual, and to wipe company or departmeinformation before cascading or disposing the

Return of equipment

Delivered equipment that is faulty or that does match the purchase order should be returned tsupplier and should not be added to the asset or paid for.


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Stage 2: Asset changemanagement processThis stage assimilates every change that occurs during

the lifetime of an asset, referred to as IMAC. Becauseevery change represents a cost to the organization,the asset management helps determine if the changeis cost effective or business ef fective. The differentconcerns in this stage include:

When changes occur

Changes will occur when they are allowed to by theorganization in the majority of cases, but certainlynot always. Though it is extremely unlikely that rulesand restrictions will be powerful enough to verify thatevery user follows them, allowing unrestricted changeto occur can divert key staff and finances away from

business development.

Change situations

IMAC processes take place under a formal chamanagement process, as defined by the InformTechnology Infrastructure Library (ITIL), for larg

projects such as a refresh, or as a solution toan incident.

The goals of the IMAC process are:

To enable control and accountability for updserver or end-user environment

To preplan a change event or just-in-time pservice

To reduce the amount of shadow support wthe enterprise, which can allow rogue activity

To build a database that will help define trenrepairs as a feeder to the technical review p

for creating catalogs of approved products

Figure 6: The typical asset change management process (stage 2)

Allocateequipmentto user

Typical asset change management process (stage 2)

Training(where necessary)

Service

User receivesequipment

In useChangeoccurs

Operations

One of the fallowingchanges may occur

User leavescompany

Changes job

Maintenance(beyond economicalrepair)

Cascade operation

Changes location

PC upgrade

Asset manager/asset team(monitor process)

Approvedchange?

Report change(await decision)

No

Yes

Amend assetregister

User details:location costcenter

IT administration

Return usedequipment/prepare toallocate new

Returnform

Personnel/HRdepartment

Write off(as necessary)

Equipmentwrite-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) lieswith the IT administratornormally the ITtechnician.

3. The person making the change is responsiblefor amending the asset register prior to therelease of the equipment.

4. The return form must be completed whenan item is surrendered. This is sent to HR.

5. The asset manager monitors the process butis also responsible for the accuracy of theasset register.


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Cascading

Cascading refers to the movement of PCs within an

organization. The latest-specification PC is allocatedat the top of the organization, and receivers pass theirPCs to the next in line. This continues until, at the lowerend of the staff structure, one of the cascaded PCs isat the end of its planned life and is terminated.

The positive aspect of cascading equipment is thatyou can enable the person with the greatest need forspeed and memory to get the best equipment in theorganization, so that the organization makes the bestuse of a new machine. This is cost effective as well asbusiness 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 thelatest recruit only requires a low-end PC.

Provide junior staff with low-end PCs:Theprocurement of low-end PCs is a poor investment,since the pace of change will render these machinesunusable within their lifespan, requiring costlyupgrades or replacements.

It must also be recognized that the cost attached toeach cascade is significant, since it involves a number

of actions usually performed by IT staff.

The best practice is therefore to split between toptionsto cascade or notand limits cascadto situations where business benefits suggest ththe financial and resource costs are justified. Hdepreciation of equipment must also be considIf equipment is terminated within its planned lifthe cost is likely to be high.

Process accessibility

To enable staff members to be aware of the prand follow an agreed procedure, it is necessapublish the processes for the entire asset manalifecycle. Employee self-service solutions allow employees to check the processes from their de

To highlight their responsibilities, staff membersbe asked to sign an acceptance form where thresponsibilities are clearly stated when they renew item.

Record all changes in the asset register

All changes must be recorded in the asset regibefore releasing the equipment. Because staffmembers tend to feel that the role they are peris more important than the data-recording elemthe best way of facilitating changes to the asseregister is to allocate responsibility for the chanthe allocator. Throughout each process, role-ba

accountability is critical to the success of ITAM

Figure 7: Cascading of assetsCascading can occur where an asset is passed to a different user during the course of the assets designated lifetime. A cost is incurred eacasset changes to a different user.

Cost

Cost

Cost

Cost

Cascading of assets

Asset

Cascade todifferent user



Terminationof use

It may be acceptable tocascade an asset, but itmust be recognized thatcosts are incurred.

Asset lifetime


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Policy

There should be a clear policy on what changesare acceptable and what action will be taken if the

organizations procedures are not followed. Becauseconsequences are difficult to define holistically due todifferences in cultural and political landscapes, it isimportant that the core team, with backing from thekey stakeholder, clearly communicates ramifications.The ITAM marketing plan should focus on the value torole-based staff, key stakeholders, peer sponsors, andend users.

Service desk

The service desk, often known as the help desk, hasan important role to play in the management of IT

assets. Its primary role is to act as the point of contactfor problem management, incident management,and service-level management. It can also act as anongoing audit system. Whenever a call is received,the staff should check the users name, PC assetnumber, and location with the information shown onthe screen. A quality, automated service desk system,such as HP Service Manager, provides a full rangeof integrated options, making help desk functionsefficient and easily managed. This knowledge iscritical to meet expected SLAs and operational-levelagreements, and increase customer satisfaction.

Accuracy of data

Accurate data in asset management means poknowledge on what equipment you have, whe

how well it is working, how much it is costing ywhether it is doing for the business what you init to do. The accuracy of this data, or lack therplay an important role in the key stakeholderssponsors, and end users perception of the sucthe ITAM program.

A best practice is to have regular audits of thedatabase and work locations. While physical oaudits identify unused or discarded equipment,of an automated inventory discovery tool, such HP DDMI, helps locate equipment that has been

or swapped and has not been recorded in the arepository. The core team must adopt a three-wmatch process that matches the accuracy of a sspot audits, and the repository.

Quality assurance

There should always be quality assurance checkon any work area, whether it is a service area omanagement-monitoring scheme. A regular revieof systems and procedures should be undertakeThese reviews should recommend improvementswherever necessary.

Figure 8:Feeding the cascade of IT assets

User Requests PC Approval andordering process(see flowchart)

PC received IT technician call

received throughservice desk

IT technician

configures newPC on users desk

New PCconfiguredCascade begins

Old PC passed tonew user (aboveprocess begins again)

Good practicessuggest that cascading is appropriate in order toprovide power users the most advanced equipment; it should beavoided unless good reason can be given. Cascading attracts hiddencosts throughout the process and diverts IT resources away fromprojects. Savings can be gained by limiting cascading to businessbeneficial cases. The greatest savings are normally gained by a userkeeping the same PC until end of the lease.

It is essential that the asset register (CMDB) is amended as soon asa change occurs. This is sometimes neglected. The IT asset manageris responsible for managing the process , but an automateddiscovery tool is required for the process to be successful.

Decision made bymanager regarding whoshould receive old PC


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Legal requirements

Legal requirements for an organization existparticularly in the areas of software licenses andcontractual issues. The use of all major businesssystems relies on the payment for these licenses andlegal contracts with suppliers.

Contract management

For the purpose of asset management, it is alsoimportant to be aware of contract informationand defined termination or replacement dates of

every IT-related item. The discipline and processaround contract management is critical in enablingfull lifecycle management. Contract managementaims to enable understanding of contract legalities,control and leverage the terms and conditions onthe organizations behalf, and manage the costs,condition, warranty, maintenance, and utilizationof assets.

Planned maintenance of buildings, plants, andequipment is considered essential to successfullybuilding operations, particularly in respect toavoiding service breakdowns and reducing reactive

maintenance or emergency repairs. Maintenancecontracts, along with insurance and lease contracts,come under the purview of contract management.

Software asset management

Software asset management (SAM) is the process bywhich an organization plans and manages softwarelicenses, software assets, and entitlements to enablesoftware vendor management and software compliancy.

SAM aims to facilitate control and accountability forspending at the department level, proper softwareentitlement, software license compliancy, and

contracts, based on actual need. All aspects ofinventory management are also involved.

Operational cost control

Operational costs can be easily monitored andreported on, provided the appropriate softwarare in place. It is prudent to maintain a good oview of the operational costs so that trends canidentified as they occur, rather than at the end period, when it is often too late to act.

Financial and allocation management

Financial and allocation management are diffedisciplines and processes but are closely relate

plays an important role in positioning the entercreate a vehicle for chargebacks or allocations

Financial management is the process used toholistically manage the financial aspects of anorganizations real and personal property assea cost, depreciation, and budgeting perspectivIt enables expense control, accountability, andauditability for financial asset tracking as it relacompliance and the general ledger/fixed asse

Allocation management is the process used to and manage cost allocations across departmen

asset procurement, maintenance, and related sIt enables control and accountability for spendthe organization and department levels, basedactual need. It also helps reduce waste and iefficiencies in spending and usage assets and


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Stage 3: Asset disposal andreplacementTermination or retirement management involvesplanning and managing the execution of retiringassets from the enterprise. It enables control andaccountability for the retirement of organization-ownedassets, 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 effectiveasset tracking and avoid surplus, any increase inthe asset stock should be countered by an exit orretirement linked to the acquisition. In simple terms,new equipment in should lead to the oldequipment out.

The disposal process must adhere to environmentaldisposal norms of the concerned country. A decisionalso needs to be made about whether a replacementitem needs to be ordered. As mentioned earlier, thereplacement cycle has moved from a five-year normto an upper limit of two years for more progressivecompanies, and a general upper limit of three years.

The termination of equipment can happen at any pointin the use of an item, especially where damage, loss, ortheft is the cause. Another important termination functionis the action to be taken on end-of-lease contracts.Penalty charges for late return of equipment can amountto considerable sums and should be avoided.

The core ITAM team defines the processes andmethods of disposal, where the common disposaltypes include:

Lease return, if the asset is leased

Employee sale, which is not considered a bestpractice, as the employee-buyer may continue tolean on internal support for the life of the asset,once acquired

Donations, not necessarily for any tax benefit, but asa philanthropic act

Cannibalism, where the components are extractedfor the parts inventory after considering costs

Scrap, where disposal is in adherence to companysecurity processes to mitigate any environmentalprotection risks, including those that could lead to fines

A best practice is that a third party is contracted in thecase of employee sale, donations, or scrap disposalto make sure professional data cleanup or disk wiping

occurs and governance measures are maintainbest practice process for terminating assets caautomated using HP software tools to enable amore effective operation.

Allocating responsibility

There are two levels of responsibility: overallresponsibility and responsibility for actions to btaken. Each key action must be assigned to a mof staff to clearly define responsibility. Responsfor an action does not necessarily mean that th

person given the responsibility actually carriesthe action.

Suitability for role

Often roles are determined according to job titSuitability for the roles, in terms of the most traqualified, can sometimes be disregarded in favof availability.

Training

Each staff member should be trained to undershow to carry out the assigned responsibility, aas where his or her responsibilities fit into the

overall process.Process and procedural documentation

It is essential that staff has easy access todocumentation that shows what, how, andwhen actions should be taken and by whom.Documentation, including process maps, shouleasy to understand.

Replacement

A best practice is that replacement should be pand should not happen simply as a consequenan item suddenly ceasing to function.

Return of equipmentExisting staff, during re-issue, should return equto stock or send it for termination. This equipmeshould be removed at the time of issuing the neequipment and a return form completed, with asent to HR to amend their records. This action cautomated through the use of HP systems solutioit is possible to link the asset management systethe HR system. It is usually the persons manageis asked to be responsible for the return of equiwhich might be re-allocated to a new employee


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Where no IT asset management system exists

The absence of an asset management system canhave the following ramifications:

Costs

TCO is difficult to calculate, so the true cost of owningan asset is often not known, because TCO is requiredin order to ascertain which assets provide the bestvalue and which ones should be avoided in future.Organizations without an asset management systemfare poorly in comparing assets for this purpose. This

results in costs easily spiraling out of control.

This apart, even the other consequences ofnot having an asset management have costdisadvantages attached.

Wasted resources

The organization can face difficulties whenever itwants to implement any new process. Resources arededicated to identify the location and ownership ofmissing assets, and to update chaotic databases.

Lack of order

Organizations are reluctant to write off missing

equipment because they believe it may turn up atsome point. There is an embarrassment factor becausethey do not wish to admit that their records are notaccurate, or that their costs in respect to assets arenot in order. This situation arises due to pressure fromwithin the organization to acquire new equipmentquickly, whenever required, without being concernedabout removing old or end-of-use equipment.

Inaccuracy

Accurate data should be held and maintainedapplies to any items that are deemed to be assthe company, although IT assets tend to be theof the highest anxiety, because the equipment 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 gas 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 areunrecorded

TCO


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Evolving an IT assetmanagement systemLevels of maturityHP believes that asset management is an evolutionaryprocess. An organization cannot achieve the highestlevel of maturity until a number of processes arecreated, tested, and implemented. Adopting aplanned, phased approach to ITAM best practice

improvement can make the transition more predictableand help optimize the outcome.

To understand where you are on the road to ITAMbest practice maturity, it is necessary to undertake anassessmentideally a self-assessment, overseen by aspecialist consultant such as HP. Once the assessmentestablishes which stage you are in, acceptance of thesituation leads to a faster path in determining yourdesired state and the next steps to get there.

Each of the four stages of evolution is characterizedby 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 theorganizations desired state

Maverick buying

Inability to measure risk

Inability to discover or track assets (physicalor virtual)

Stage 2: Reactive

Implements automation through enterprisediscovery tools

Takes the first step toward matching discoveredasset data with basic portfolio data within theasset repository

Implements user request management catalogs andtools 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 theasset repository for full transparency into that aspectof the asset s life

Implements more complex reporting and acqthe ability to consider managing chargebackallocations to the business units

Implements automated request management

Articulates IT value

Lack of reconciliation of asset request to rece

Stage 4: Optimization

Attains full transparency of the entire lifecycleincluding all contract and financial implicatio

as well as the assets relationship withservice management

Optimizes business intelligence to transform infrastructure into what HP describes as opt

Identifies opportunities to standardize

Aligns IT with business objectives

Ascertains service value

Identifies breaks in processes

Periodic assessment can help you analyze wheare against where you want to be. This will dethe next steps and a practical roadmap for moforward, using process development andsoftware tools.

Getting startedthe key initiativeTo lay the groundwork for a sound ITAM initiafollowing some foundational philosophies helpmake a good start. These principles apply not to new initiatives, but also as a checklist for thorestarts that are common around ITAM proje

Obtain executive sponsorship

Obtain peer support

Appoint an IT asset manager

Create, approve, and start to implement a stimplementation plan

Determine ITAM processes

Select a software management tool andautodiscovery tool

Implement all of the above

Enable ongoing quality assurance


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Benchmarking your performanceThe benchmark is a record of factual cost andposition at a given point in time, and enables a setof comparisons for past and future reference andassessment. The challenge is often in figuring out howto know the status of your asset management initiativein a business environment, at any given point. Thesolution lies in:

Monitoring

Along with an automated inventory discovery tool,a physical audit carried out on a periodic basishelps identify and record equipment not linked to thenetwork, especially equipment no longer in use. Inaddition, HP recommends implementing a three-waymatch scenario that utilizes spot walk-around auditsand a process that reconciles the spot audit to therepository and the automated scan.

Measuring

Key performance indicators (KPIs), commonly obtainedand monitored during the course of managementreporting, can be critical success factors. KPIs are

factors identified by organizations as being significantmeasurements of their business performance.These are regularly monitored and reported at amanagement-team or board level, not only as a meansof measuring performance, but also a means to detectearly warnings of market changes.

Based on the measurements, SLAs for infrastructuremanagement services and processes can be defined.These SLAs can be used to specify asset managementservices to internal and external customers.

Assessing

This provides the opportunity to compare yourcompany against industry best practices and assessyour current status across a range of functions againstaverage maturity levels in the industry.

A facilitated self-assessment workshop can helreview your ITAM processes against the best pidentified by HP, based on more than a thousaimplementations of asset management projectsenterprise IT sites.

Using a collaborative approach based on grodiscussions with managers and users, HP estaban environment that fosters teamwork and opecommunications. The assessment uses the HP AManagement Process Framework. The framew

was developed and is based on industry bestpractices, including ITIL standards for softwaremanagement.

On completion, participants gain an excellentunderstanding of ITAM goals, best practices, abenefits, as well as the ability to use the framewa model to create action plans.

Analyzing decision and actions

Processes must be in place to help you determwell or badly you are performing as an organwith respect to managing assetsas a direct r

the decisions that the organization has made aactions it has initiated.

Further, business intelligence can help in determfuture decisions and actions. In simple words, iability to use current data and run what if scHere, relational data helps determine the best resources as well as the future of those resourc


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Creating a business case

This helps justify your case when you have madedecisions favoring significant investments. Whatis required here is the input of accurate financialinformation and the ability to accurately analyze thedata and compare this against best practices.HP has developed several financial analysis modelsto assist organizations in developing the properbusiness case for either initiating or expanding anasset management project.

A useful tool that facilitates this process is the ROIcalculator, which makes use of financial analysisto evaluate a given project. Financial analysis isperformed by calculating the costs and benefits ofthe project, and by using the concept of time valueof money.

ConclusionWhile many CIOs lack credibility with theirorganizational peers and sometimes even with thoseto whom they report, these relationships can beimproved if CIOs credibly answer four asset-related

questions that are critical to running a successfulbusiness. It goes a long way to build creditabilityif IT is able to communicate to others what assetsare owned by IT; what the return is on those assetsand how that return is being improved; how ITsinvestments compare with those of competitors; andlastly, how IT is managing the risks associated withits assets. The only way to get there is to have theright technology, right people, and right processesworking together to achieve that level of transparency,benchmarking, and governance. HP has long beenand continues to be a leading provider in both the

technology and best practices necessary to providethe CIO with the tools and data needed to create andcommunicate amazing results.

Copyright 2009, 2011 Hewlett- Packard Development Company, L.P. The information contained herein is subject to change without notice. The onlywarranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing hereinshould 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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A Best Practice Guide for IT Asset Management

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