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What Is IT Asset Management? (And How Can It Mitigate Business Risk?)

Posted by on May 08, 2019

What Is IT Asset Management

IT asset management (ITAM) is a set of business practices for managing the life cycle of IT assets within the organization, from their initial purchase through to disposition. Also known as IT inventory management, ITAM requires IT organizations to integrate the financial, contractual, and inventory functions of their IT assets into a singular database that supports better life cycle management and efficient deployment of IT assets within the organization.

An organization's IT assets consist of the hardware and software that it needs to deliver services. ITAM includes the management of both hardware and software assets. Hardware asset management is focused on managing the life cycle of physical IT assets within the organization. Through ITAM, IT organizations can measure the average repair costs and total cost of ownership associated with various IT assets. They can use this data to inform future purchasing decisions. Software asset management keeps an inventory of software assets and licenses that the organization owns, and plays a role in ensuring ongoing compliance with service-level agreements (SLAs).

ITAM increases the visibility and oversight of IT assets within an organization. IT organizations can use this data to identify opportunities for cost savings by purchasing hardware assets or software licenses in bulk when possible.

What Are the Benefits of IT Asset Management?

Effective IT asset management requires the construction and maintenance of an ITAM database with contains a variety of information about IT assets. IT organizations can use this database as a central source of information for all data that is connected to IT assets. This data can be leveraged on an ongoing basis to support data-driven strategic initiatives that achieve the following key benefits.

More Efficient Project Management

When IT managers are getting ready to launch a new project, it is vital to ensure that the organization has the IT assets available to support the project. A populated, up-to-date ITAM database creates visibility of all IT assets within the organization, enabling project managers to readily identify assets that can be deployed for the project and conduct a gap analysis to determine what assets the organization may need to acquire. Project managers can more easily determine how to reduce project costs by leveraging the organization's existing IT assets rather than purchasing new ones.

Improved Software Compliance, Limiting Business, and Financial Risk

The presence of usage data and SLAs within the IT asset management database makes it easy for IT managers to conduct internal software compliance audits and ensure that the IT organization is in compliance with its existing SLAs. ITAM databases may store contract information as attribute data, making it easy for IT managers to reference SLAs and discover compliance issues before they result in costly audits, true-ups, or litigation.

RELATED: Why Organizations Need to Invest in IT Asset Management

Coordination of Assets Between Business Units

IT assets should never be siloed within a single business unit, as a lack of coordination and distribution of IT assets between business units invariably leads to waste. Some business units order too many items that they don't need, and those excess assets end up in some inventory closet where they are unused, inaccessible and invisible to other parts of the business. Separate business units may be licensing the same software or purchasing similar hardware, but missing out on opportunities for bulk purchase discounts.

With a centralized system for ITAM, IT assets for the entire business are managed centrally through the ITAM database and deployed where needed. Assets can be coordinated between business departments, rather than being compartmentalized in them and therefore inaccessible.

Reduced IT Costs and Improved Efficiency

IT asset management makes it easy for IT organizations to see what assets they are using and what assets they are not using. Software licenses that are unused may not need to be renewed the following year, while unused hardware can be saved, recycled, sold on, or otherwise repurposed for some benefit rather than staying on a shelf indefinitely. IT asset management tools allow organizations to see where they can generate the best return on investment for their IT asset expenditures, and where they can repurpose existing assets or equipment rather than purchasing something new.

Improved Data Security with Tracked End-of-life Disposal

Businesses must maintain their data security by disposing of IT assets at the end of their life cycle through appropriate channels that prevent any data on those assets from being stolen. Organizations that fail to adequately manage their IT assets may not always recover them from an assigned user at the end of their life cycle. Organizations must ensure that data is protected while it is available on network endpoints and that hardware assets are returned at their end of life for a proper asset disposition that includes the destruction of sensitive data.

What Information Is Included in an ITAM Database?

The most important tool for ITAM is the ITAM database, a single source of truth for all of the most important information about IT assets within the organization. ITAM databases use automated features to integrate IT asset information from a variety of sources, making it easy for IT organizations to start discovering, tracking, and managing IT assets within the organization. ITAM databases typically contain three types of information for each IT asset:

1. Physical Information

The ITAM database contains physical information about each IT asset in the organization's inventory, including where the device is located, whether it has been deployed, when it was purchased, how long it has been in service, and to whom the device is assigned. This basic information is essential for effective incident management, request fulfillment, and other routine tasks for which the service desk is responsible. IT assets that are deployed on the IT organization's network can be tracked and discovered using automated features of ITAM software, while those in stock rooms that are not deployed can be tracked manually or using RFID tags.

2. Financial Information

Financial data that is correlated to IT assets within the organization can typically be sourced from the IT organization's accounting or purchasing system. Financial data for IT assets includes metrics such as the purchase order number, the name of the vendor or supplier, the date that the purchase was made, make-and-model or SKU number, the total purchase price, and depreciation for the purchase. Financial information can be updated to reflect the ongoing costs of maintenance, repairs, or down-time connected to the IT asset. The careful tracking of financial data for IT assets can reveal which assets are most economically advantageous in terms of total cost of ownership, least costly repairs, or other measures.

3. Contractual Data

The third element that makes up the ITAM database is the contract data for IT assets that are licensed or under lease from the vendor. Contractual data can be sourced from the vendors themselves or from the IT organization's own contract management or software license management software. Contractual data includes a copy of the final service agreement for the IT asset, the version numbers of software, software license types, vendor SKU, service-level agreements, maintenance agreements for software and hardware assets, warranties, and any other contract parameters that are important for the administration of the IT asset within the organization.

RELATED: 4 Ways ITAM Integration Will Elevate Your IT Service Delivery

How Does ITAM Help Mitigate Business Risk?

Effective IT asset management plays an important role in mitigating business risk and protecting organizations from many of the potential negative consequences of poor IT asset management. Without ITAM, organizations that lack adequate visibility and oversight of their hardware and software assets can run into problems when those assets are misused or mismanaged. ITAM helps provide the IT asset oversight needed to:

Ensure Software License Compliance

Each year, hundreds of IT organizations find themselves on the hook for expensive true-up fees and possible litigation costs when they are found to violate software license agreements with their vendors. When IT organizations license software, it is crucial that they understand the details of the license agreement and comply with the agreement throughout the entire life cycle of the contract. This means ensuring that the IT organization does not install the software more times than is permitted by the contract, that it does not share software licenses in ways that are prohibited by the contract, and that the contract is not otherwise violated by the IT organization's use of the software.

ITAM plays a major role in supporting software license compliance by providing visibility into the software contract and its parameters throughout the software life cycle. IT operators and managers can compare usage data on the network for a given application to the relevant SLA to determine whether the organization is in compliance. The organization can then take the necessary steps to comply with the software license agreement.

Prevent Data Breaches through Proper Disposal of Equipment

Data breaches can result in major consequences for the IT organization, including damage to the firm's reputation, financial penalties, legal ramifications, and more. Planned and careful disposal of all hardware and software assets is an important step towards protecting organization data and ensuring that sensitive customer data is not stolen from retired machines by nefarious actors.

In organizations with inadequate asset disposition processes, old computers or servers may be haphazardly thrown in the garbage or even taken home by an employee, unacceptable practices that do nothing to guarantee the security and privacy of information and expose the company to data breaches and other potentially costly security risks.

IT asset management allows IT organizations to track their assets throughout their entire life cycle, all the way to disposition or end-of-life management. The IT organization can implement policies and procedures for returning old equipment to the IT organization and disposing of IT assets through the proper channels. This process guarantees that any sensitive information is wiped clean from the old machines and protecting the organization from data breaches. The ability to track every asset also creates additional accountability throughout the organization. IT managers can see which devices are signed to specific employees and ensure that retired assets are returned for disposition through the appropriate channels.

Increase Efficiency of IT Asset Expenditure

Any business can reduce its overall risk by allocating its resources more efficiently. From the perspective of IT asset management, that means ensuring that newly purchased IT assets are genuinely required by the organization and that existing IT assets are deployed in a way that optimally benefits the organization.

Consider an organization that purchases 20 licenses for an accounting software for employees in its finance department. Using ITAM, the IT organization can track all installations of that software on the network and it discovers that the organization only has 14 of these software licenses in use while the excess licenses sit in  inventory unused by anyone. When it comes time to renew the service agreement, the IT manager knows to purchase fewer than 20 licenses as many of the licenses went unused in the previous year. This insight leads to the IT manager to purchase 16 licenses instead of 20 for the new year, reducing expenses on the software by 20 percent.

In another case, an organization hires salespeople in volume and needs to set each new employee up with their own laptop, peripheral devices, and computer headset for conducting sales calls. Using ITAM, the IT organization can source physical hardware and software assets for the new employees from throughout the organization. Accurate tracking of IT assets with ITAM means the organization only purchases new equipment for employees when it cannot satisfy its business requirements with existing inventory, and fewer wasted purchases ultimately leads to greater cost savings.

IT Asset Management Software Tools Streamline the ITAM Process

Today's sophisticated IT organizations implement IT asset management software tools that leverage cutting-edge features to automate and streamline the ITAM process, including the construction of the ITAM database. Cherwell's IT Asset Management software offers enterprises total visibility and control over their enterprise IT assets along with effective management of IT assets throughout their entire life cycle.

Organizations that are moving towards compliance with the ITIL framework can benefit from Cherwell's ITAM software as an input source for a configuration management database (CMDB). The CMDB contains information on all configuration items within an organization, including but not limited to the software and hardware IT assets that the firm controls. IT organizations can source data about hardware and software configuration items (CIs) directly from Cherwell's ITAM and into their CMDB.

Cherwell makes it easy for IT organizations to track and manage their IT assets, improving their operational efficiency while reducing business risk. Are you ready for an IT asset management tool that integrates seamlessly with Cherwell ITSM to help your service desk staff deliver the best support for users?

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