IT Asset Management
the foundation of all IT Success
Cora L. CarmodyJohn R. WarburtonOffice of the CIO
Litton PRC
2
In general…• Decentralized IT spending in the
absence of standards leads to– inefficient spending without volume
purchase agreements– lack of insight into what we possess– severe interoperability problems– low ability to implement modern
technological solutions
3
Areas of common concern- Process inefficiencies
“we spend too much and wait too long”lack of standard processes
- Lack of asset insightstill paying taxes on assets long gone
- Lack of uniform support and supportability help desk, back-upsdueling DLLs...uninformed installs
- Lack of technological agilitymigration planningmigration implementation (manual software
distribution)
4
AssetEntry
Use
Insight
TechRefresh
AssetRetirement
Ass
et U
sefu
l Life
Acquisition
Configuration
Set Up
Training
Accounts/Payable
AssetRegistry
ProblemResolution
ApplicationSupport
Moves, Adds,Changes
BaselineInventory
InventoryMonitoring
AssetReconciliation
Financial Analysis/Reporting
Asset Refresh
SW LicenseManagement
Tech ChangeManagement
Upgrade
AssetRedeployment
AssetDisposal
EnterpriseIntegratedAsset Mgt
System
AssetRepository
Deployment
AssetPlanning
IT CapitalPlanning
ForwardPricing
SoftwareBuild/
Distribution
ContractMonitoring
ProgramTech
Refresh
Std DsktopPolicies
ContractMods
LeasingManagement
StandardDesktopProgram
Management
Capital 26%
Technical Support
17%Admin14%
End User Operations
43%
Total Cost of Ownership
Standard Desktop
IT Asset Management(Seat Management)
Common Operating EnvironmentArchitecture, Standards, Policies,
Processes
COE Strategy to Lower TCO
CO
E Strategy to im
prove Asset
Manageability
Foundational Strategy
Foundational Strategy
Building
Block
SoftwareDesktopsServersNetwork
5
IT Asset Management
The Policies, Processes, Systems and Controls for the Orderly
Planning, Acquisition, Entry, Use, Insight, Refresh, and Retirement (Reallocation and/or Disposal) of
all IT Assets
6
Common Operating
EnvironmentDefinitionStandard Desktop Team
ITAM Team
Process & IT Improvement Teams
COE Teams Approach; the Beginning(and the simple view)
Standards,Policies &
Macro Processes
DetailedProcesses
Architecture
7
AssetEntry
Use
Insight
TechRefresh
AssetR etirem ent
Ass
et U
sefu
l Life
Acquis ition
C onfiguration
Set U p
Tra in ing
Accoun ts/Payab le
AssetR egistry
P rob lemR eso lu tion
ApplicationSupport
M oves, A dds,C hanges
BaselineInventory
InventoryM on ito ring
AssetR econcilia tion
F inanc ia l A na lys is /R eporting
A sset Re fresh
SW L icenseM anagem ent
Tech C hangeM anagem ent
U pgrade
AssetR edep loym ent
AssetD isposal
E nterpriseIn tegra tedA sset M gt
System
A ssetR epository
D eploym ent
AssetP lann ing
IT C ap ita lP lann ing
ForwardPric ing
S oftw areB u ild /
D is tr ibu tion
C ontractM on ito ring
ProgramTech
R efresh
C ontractM ods
Leas ingM anagem ent
IT A sse tM anagem ent
Support C enter
S td D sktopPo lic ies
Enterprise IT Asset Management Macro Patent pending
8
AssetEntry
Use
Insight
TechRefresh
AssetR etirem ent
Ass
et U
sefu
l Life
Acqu isition
C onfigura tion
S et U p
Tra in ing
A ccounts/P ayab le
AssetR eg istry
P rob lemR eso lu tion
App lica tionSupport
M oves, A dds,C hanges
Base lineInventory
InventoryM onito ring
AssetR econcilia tion
F inan c ia l A na ly s is /R eporting
Asset Refresh
SW L icenseM anagem ent
Tech C hangeM anagem ent
U pgrade
A ssetR edep loym ent
A ssetD isposa l
EnterpriseIn tegra tedAsset M gt
System
A ssetR eposito ry
D eploym ent
AssetP lanning
IT C ap ita lP lann ing
ForwardPric ing
S oftw areB u ild /
D is tribu tion
ContractM on ito ring
P rogramTech
Refresh
ContractM ods
Leas in gM ana gem e nt
IT A ssetM anagem ent
Support C enter
S td D sktopPolic ies
Some Qualitative Benefits•Reduced Process Time•Reduced Product Costs•Avoiding Costs
Incurred Through Shadow Support •Quicker Resolution
Time
•Reduction of Redundancy•Ability to Standardize•Obtain Volume Pricing
•Reduction of Liability Incurred Through Illegal Licenses•Cost Avoidance Through License Reuse
•Decrease of Taxes Paid on Absent Equipment
•Cost Savings Through Better Utilization of Existing Assets
•Enhanced Employee Satisfaction and Productivity
‘nuff said
Patent pending
9
Enterprise IT Asset Management Architecture
DesktopSystems
Network & Systems
Management
AssetManagement
BusinessSystems
SoftwareBuild
(OS, OA,Custom Apps)
SW Metering
DiscoveryClient
ElectronicSoftware
Distribution
ITAsset
Registry
DecisionSupport
SupportCenter
Procurement
Accounts Receivable/Accounts Payable
Fixed AssetManagement
SoftwareLicense
Management
ITAsset
Registry
Asset Repository
HumanResources
InventoryManager
NetworkMonitoring
Web Enablement
Web Enablement
Seat Management Dashboard
Patent pending
10
Worst case Costs2,500 PC Wkstns.
over 12 months
% Costs ReducedWith Asset Mgmt.
Strategy
EstimatedImplementation
Costs
Net 12 MonthSavings**
1 Help DeskDiscovery Time
$420,000 57% $46,900 $192,500
Worst Case Desc.: End-user works 100 min. per year (@$30/hour) on support calls Technical support analyst works 100 min. (@75/hour) to discover configurationAssume six calls per user at average length of 17 minutes per call.
Implementation Cost : Auto-discovery software license @ $10 per workstation, plus labor for one year (4 hours per server install; 2 man days/month maintenance)
Savings: Assume reduction in work by user at 75 percent and technology by 50 percent
2 Maximize HW/SWDeployment
$375,000 55% $93,000 $113,250
Worst Case Desc.: Assume manual software distribution at 2 tech. hours (@ $75/hour) per wkstn. per yearImplementation Cost: Electronic software distribution software licenses plus labor; one major distribution job
($30/node; 4 hours per server install; four person-weeks configuration and test)Savings: Assume automated software distribution eliminates at least 55 percent of manual costs
3 New HardwareAcquisition
$2,860,000 10% $286,000
Worst Case Desc.: 715 new machines (at $4,000 each) purchased by multiple buying centers from multiple vendors over 12 months; (Assume 42 months or 3.5 yr. average life ofmachines, therefore 2500/3.5=715 new PCs per year)
Implementation Cost: NoneSavings:
and installing machines purchased under same contractAssume at least 10 percent improvement in cost associated with acquiring
4 Software VolumePurchase
$500,000 25% $125,000
Worst Case Desc.: Assume multip le groups within enterprise buying software without discount or at a minimal discount (i.e ., 10 percent to 15 percent)
Implementation Cost: NoneSavings: Assume groups buying software under same contract w/ higher discount (e.g., add 15%)
5 SoftwareOverbuying
$500,000 27% $46,900 $88,100
Worst Case Desc.: Assume strategy where enterprise buys one $200 software package for all machines regard less of usage level
Implementation Cost: Software metering licenses plus labor for one year ($10/node; 4 hours per server install; two person-days/month labor)
Savings: Assume at least part of enterprise can license per usage (i.e., 1000 users at 30 percent concurrent-use level)
6 MaintenanceContracts
$150,000 17% $25,500
Worst Case Desc.: Assume flat rate on all desktops in enterpriseImplementation Cost: NoneSavings: Differentiated service levels based on workstation criticality
instead of uniform service for entire enterprise7 Property or Usage
Taxes$312,500 20% $62,500
Worst Case Desc.: Tax calculation of 5% on 2500 machines with average value of $2,500Implementation Cost: NoneSavings: Assume average industry savings after only paying taxes on workstations
that have residual value.
TOTALS $5,117,500 $186,800 $894,050
** Net savings calculated by total savings less implementation costs
Source: Gartner Group“Enterprise IT Asset
Management: Executing the Vision”,
January, 1997
Some Potential
Quantitative
Benefits
11
Total Cost of Ownership• Annual TCO for a Desktop averages
between $10,000 and $12,000 annually
• 74% of Annual Costs are spent in operating a desktop– potentially upwards of $8K a year
• Most is generally not accounted for separately
12
Exposing Key Metrics• The defined processes of IT Asset
Management expose savings potential– Software Licenses
• Dollars saved by transferring licenses rather than buying new ones
– Shadow support• Having an 800# to call for application support
instead of using the engineer next door– Asset Reallocation
• Dollars saved by avoiding capital acquisition through redeployment
13
Examples of Early Problems and Resolutions
• Biggest issues– Communication and currency of
configuration information– Rapid delivery of orders
• Problem Resolutions– All processes now documented – We provide manufacturers with changing
configuration baselines– We post configuration info on web in real-time– We provide manufacturers with monthly forecasting
data
14
Some General Lessons Learned
• Now have enterprise-wise prediction of IT capital spending– We are using that knowledge to standardize and
obtain volume purchase agreements• Team approach has greatly assisted a major
cultural change • Taken a long longer to get to this point than we
thought• Plummeting desktop costs and rapidly
improving technology provides challenges
15
Asset Management’sEvolving Goals
and Phases of
Value Contributionto the Enterprise
from“Economic Performance GainsWith IT Asset Management”
the Gartner Group, 23 February, 1999
16
Summary -- Benefits of ITAM• Accurate Prediction and Control of IT Funds• Foundation of asset insight
– Necessary to continuously migrate our information technology
– Increased decision-support ability• Reduced expenditures. For example,
– process efficiencies– elimination of redundancy, – decrease of license costs, – increase of volume discounts, – decrease of unnecessary property tax