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IT Asset Management 101

Posted by on November 19, 2018

IT Asset Management

Business growth and IT growth often go hand-in-hand. More sales and more revenue means more employees, and more employees means more computers, more servers, and bigger networks. Bigger organizations also tend to bring more operations in-house, choosing to save costs by managing their own HR, finance, and accounting departments by licensing third-party software and hiring even more employees (and leveraging even more IT).

If your business is growing, it won't be long until you need to develop an IT asset management protocol that allows you to manage your hardware and software assets throughout their lifecycle, helping to reduce business interruptions, plan budgeting effectively, mitigate risks, and gain high-level insight into how IT is driving success for your organization.

If you're ready to build the business case for IT asset management at your organization, we're offering a big short-cut with this in-depth primer into its benefits. We'll explain what IT asset management is, what kinds of assets it can be used with, how it differs for hardware and software, and how it can help organizations maximize return on their investments in both IT equipment and software licenses.

You'll also find out why aggressive external software audits could represent the biggest financial risk to your business that you haven't thought of, and what you can do today to avoid the penalties and fines associated with non-compliance.

We're even going to break down IT asset disposition and how you could be getting even more value from IT equipment that reaches the end of its lifecycle at your organization. By the end, you'll have everything you need to set yourself up for success with IT asset management.

What Is IT Asset Management?

IT asset management is a system of business practices that seeks to maximize the value of IT equipment within an organization by combining financial, contractual, and inventory data to track the status of IT assets across their lifecycle. IT assets can typically be characterized as either hardware—the physical computing equipment that the organization owns—and software, or program assets that the organization either owns or licenses.

Here's how IT asset management applies to each category:

Hardware - Organizations with robust IT infrastructure can own a lot of computer hardware: desktop computers, laptops, keyboards and other peripheral components, printers, copiers, and more. To ensure that the hardware is well-maintained, organizations must keep track of what assets they own, where those assets are deployed within the organization, how they are used, how frequently they are used, their repair status, lifecycle information, and when they need to be replaced or disposed of.

Software - Software assets are typically licensed by the organization based on the number of users that will install the software. IT asset management processes for software allow organizations to monitor their compliance status with the end user licensing agreements that allow them to use licensed software applications. Your organization can monitor the status of your software licensing agreements, plan appropriately for future licensing payments, and monitor how many licenses are in use to ensure you're getting the most value for each software license that you pay for.

The role of IT asset management is to help organizations extract the maximum value from their IT investments. In that sense, IT asset management is really a set of business practices that enable businesses to make better decisions about how they manage their IT resources. The practice of IT asset management is the collection of financial, contract, and inventory data about the hardware and software that an organization controls, but the real value is created when executive managers use that information to make decisions about how best to maximize existing IT assets, when and whether to invest in new IT assets, and how to dispose of aged IT assets in a way that maximizes returns.

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What Are the Features and Benefits of IT Asset Management Software?

At its core, IT asset management is a discipline based on the collection and analysis of data. In the past, organizations might have kept paper records that detailed their inventory of hardware and software assets, costs for each asset, and other data, but the proliferation of IT within organizations has made it virtually impossible to track IT assets in detail using a paper system.

Organizations that lead the way in IT use IT asset management software to keep up-to-date records of their IT assets that can be used to facilitate important decisions about how IT equipment is managed. Below, we've listed some of the core features of this software and what benefits your organization can expect from each one:

Comprehensive Hardware and Software Asset Tracking

A comprehensive data tracking system must lie at the heart of every effective IT asset management system. The ability to track assets and their attributes across several dimensions is a critical value driver for organizations that want to leverage IT asset management to improve their decision-making when it comes to IT.

The inventory tracking functionality of IT asset management software goes beyond a simple list of what assets you have at your disposal—it includes specific details and specifications for hardware and software that enable real transparency into your IT capabilities. Organizations use IT asset management software to track their computing assets, along with details like the product number, SKU, and date of purchase, and technical specifications like CPU type, processor speed, memory, available disk space, IP address, and numerous other parameters.

License Compliance Management Functionality

Software license compliance is a major issue for organizations that license third-party software. If you license software for multiple users at your organization from a third-party supplier, you may be subject to external audits to ensure that you are compliant with the terms of your service-level agreements. The world's biggest software providers pull in billions of dollars annually by investigating subscribers who are suspected of abusing their services. Whether you're aware of the situation or not, your organization could be hit hard by:

The bottom line is that organizations need to remain in compliance with license agreements to avoid an expensive software audit that results in big fines. IT asset management software allows organizations to automatically detect what software has been installed on each computer that is connected to the company's network. Automated software detection can be cross-referenced with service-level agreements to ensure compliance and avoid hefty penalties associated with an unsuccessful software audit.

Software Usage Data and Analysis

When an organization purchases 10 software licenses but installs the software 15 times, it could be subject to penalties for violating its service-level agreement with the software provider—but what if the organization purchases 15 licenses and only installs the software 10 times?

Organizations are using IT asset management software to assess software installation and analyze software usage data, helping to eliminate excess costs associated with unused software licenses. Software applications can be used to track the number of machines on which a certain application has been installed, as well as the actual usage statistics for the application. After all, a license paid for is still wasted if the application is never touched by the user—and that's an opportunity for the organization to cut costs.

Purchasing Functionality/Integration

Many organizations are tracking IT purchases through a procurement system and managing IT inventory through a separate system, but often the link between the two systems is missing. This means that the folks responsible for managing IT assets may not have full visibility of the service-level agreements and contracts that govern software licenses and may not be able to properly plan for future purchases or see when software contracts need to be renewed.

IT asset management software needs to provide the big picture view of how the organization is addressing its needs for hardware and software by integrating procurement and IT management into one dashboard. In this way, organizations can accurately assess their current software and project their future needs in the same interface, allowing for effective strategic planning and budget allocation.

On the hardware side, transparency into purchasing allows IT asset managers to budget correctly for turnover of IT inventory, plan for new purchases in accordance with inventory that is approaching the end of its lifecycle and analyze financial data alongside IT inventory usage data to determine the best route for IT asset disposition.

RELATED: Why Organizations Need to Invest in IT Asset Management

What Is IT Asset Disposition?

IT asset disposition (ITAD) is a business built around the safe and ecologically responsible disposal of obsolete, out-dated or unwanted IT products. Often overlooked even by organizations with robust IT departments, ITAD can be one of the strongest value drivers associated with IT asset management, as it allows organizations to recoup significant costs when disposing of IT equipment that is no longer needed. Organizations can leverage their IT asset management system to maintain records of use for various IT equipment, determining when equipment needs to be replaced.

When a piece of hardware reaches the end of its normal lifecycle, IT inventory managers need to make informed decisions about what will happen to the equipment. Is it worth the cost to refurbish the equipment? How much could the life of the equipment be extended by an investment in refurbishing, and is it worth the cost? Should the asset be resold? If so, how should it be priced and what resources will the organization allocate towards coordinating a sale? Should the asset be recycled? What are the applicable rules and regulations (and rebates!) associated with that, and what are the risks of improperly recycling the asset? The organization may even choose to dispose of the asset altogether through an ITAD firm.

An ITAD firm is typically contracted by the organization to take responsibility for proper disposal of the IT equipment. Processes for maximizing recouped value from old equipment can be complex, and specialized firms can obtain ITAD certification qualifications by demonstrating their commitment to environmentally responsible and sustainable practices, adequate worker safety, and appropriate precautions for data security.

It is crucial to contract and ITAD firm that you trust to help manage your IT asset disposition. A dependable partner in ITAD adds value to your organization by:

Getting Started with IT Asset Management

Cherwell's IT asset management software is an industry-leading solution for organizations that wish to enable better strategic decision making by increasing visibility and transparency of their IT infrastructure. With Cherwell, organizations can better manage the ongoing costs of maintaining their IT infrastructure, including equipment lifecycle and software service-level agreements. They can also effectively mitigate license risks by maintaining visibility into software license agreements and software usage, avoiding the penalties, fines, and reimbursements that are often associated with software audits for organizations that do not adequately monitor their usage of software licenses.

Best of all, it can take as little as a few hours to implement the software, and both hardware and software detection is conducted automatically, removing the need for painstaking manual data entry and enabling organizations to immediately begin leveraging data and analytics for strategic decision-making. An intuitive reporting system with extensive filtering and drill-down capabilities offer virtually unlimited ways for organizations to view and analyze data.

Get started today by requesting a product demo and see what Cherwell can do for your organization.

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