To write this article, I started with a search for the term “Asset Management” in Wikipedia and I ended up in a redirected page that describes “Investment Management”, and why not? When referred to as an “Asset” it is common to consider the cost, the depreciation, and the book value (residual value) of an asset. However if referred to as an “Investment” it is inspires me to think the true value of an asset. If you have read a previous article by Gamutsoft’s EVP – Kato-san
you would understand immediately it is important to always consider the TVO (Total Value of Ownership), and maximize the value of IT in its business operations.
An investment is the choice, after thorough analysis, to place or lend money in a vehicle (e.g. property, stock securities, bonds) that has sufficiently low risk and provides the possibility of generating returns over a period of time.
Now with that in mind, isn’t it true we must better manage our assets (investments)? Please allow me to share with you my journey and sights and sounds in the field of IT Asset Management.
Asset Management as a by-product of Desktop Management
In my role as a Systems Engineer, in 1996 I demonstrated a desktop management solution based on the Microsoft Systems Management Server (SMS) version 1.2. It was specifically focused on managing client computers in a Windows NT Domain, with a client-side agent (software) to allow the system administrator to collect hardware and software details of Windows PCs, deploy software packages, and to perform remote control. It was also a sneak preview of what is to come in IT Asset Management because of the ability to perform asset inventory from a central location, although at the time it was limited to a single physical network. Customers responded positively to the solution and particularly the Software Deployment and Remote Control feature, considering at the time the most common desktop operating system was Microsoft Windows 95.
Note: The widely used Remote Desktop Connection application was introduced in 2001 as part of Windows XP, four generations later from Windows 95.
As of 1996, although tools existed with the ability to collect hardware and software details, the information collected is used mainly for software deployment projects. Few off-the-shelf tools were available solely for the purpose of hardware and software asset management. Nevertheless it was a beginning to perform automated hardware and software asset discovery and paves a path to the generations of asset management tools to come.
Significance: Early adaptation of automation tools to perform hardware and software asset inventory.
Asset Management as a solution to an impending problem
From 1998, the world began counting down to the potential disaster when the clock roll-over mid-night (00:00) from December 31st, 1999 to January 1st, 2000, known as “the millennium bug”, “Year 2000 problem”, or “Y2K”. Simply put, any system that had a built in clock could potentially fail at 00:00 01-01-2000. I won’t go into the details here but a quick search for “Y2K” in Google or Wikipedia will provide much information.
So what was the threat of Y2K? After all this is now the year 2009 and looking back there wasn’t any noticeable disaster, nothing like “airplanes falling from the sky” as some have warned. And some may even call it the “Y2K Hoax”, as the world spent an estimated 300 million US dollars towards assessing the problem and upgrading systems that had Y2K related risks.
As a System Consultant my responsibilities were to ensure the un-interrupted operations of my customers IT infrastructure, and this is where Y2K became a priority with an absolute deadline (December 31st, 1999 23:59:59). The spread was huge to include any system (in fact anything) that has a built-in clock, any application or spreadsheet or formula that depended on the “date”, and any disaster recovery process that may be hindered by failed systems due to Y2K. If you can imagine in a data center or server room environment, this means everything including the air conditioning system, the water supply for chilling, power systems (the public power grid, UPS, backup generator), fire suppression systems, and the door access systems, and of course. And any of these systems failing may have a ripple effect on the customer’s business operation. (Real Case: We had identified a finger-scan door access system that as a result of Y2K, will deny anyone from accessing the building. The system thinks the current year is “00” (or 1900), and the authorized personnel accounts are created some 90 years later “97” (or 1997). The system was replaced in time for the Y2K roll-over)
To address the risk of Y2K, we saw many software tools that can perform hardware and software asset discovery, and comparing the results against a known Y2K hot-list for potential problems. It was a tedious process as the very details of hardware and software is analyzed, something as simple as an earlier hardware BIOS version or an older software library (.dll) could introduce a Y2K risk. As such, the Y2K tools perform lengthy scans on each computer and sends huge amount of collected asset data over the company’s networks. This put a lot of stress on the network and caused performance issues with computers when they are logged into the network, the biggest reason why most companies discontinue the use of Y2K tools soon after the beginning of year 2000, even though it provided asset management features.
In 2000, Y2K helped us realized the value of an Asset Management Database and the need to better manage assets. IT Assets should not just measured by their “book value”, but the significance and true value to the business operation as a whole.
Significance: Importance of IT asset inventory database for hardware and software, for data analysis.
Significance: Understanding of the value of IT Assets in the business operation, not just the “book value”.
Asset Management to a changing financial landscape
In recent years, the need to become more and more cost efficient is unmistakable. Whether it is by means of CAPEX (Capital Expenditure) Vs. OPEX (Operation Expenditure) and Cash Flow, Consolidation, Virtualization, Maintenance and Break-fix, and the Lifecycle of IT Assets, the goal is to increase the efficiencies and as a result lowering the cost.
For example, more and more businesses are moving to a leasing plan for their computers, and as a result shifting from CAPEX to OPEX model and benefit from better cash flow. Likewise consolidation and virtualization help reduce the number of physical assets and therefore lowered the cost to procure, maintain, and operate. However it is alarming the need to better manage the IT assets is often overlooked. I will explain why.
It is common for a lease plan to include a return clause, where the lessee (the receiver of the service) is required to return the IT asset to the leaser (the provider and the asset owner). And often such return clause consists of a financial penalty if the asset is not returned on time. Therefore it is very important to track the whereabouts and lease return date of such leased IT assets, by IT Asset Management.
Consolidation and Virtualization also brings significant savings, not just the cost of the hardware asset, but increased utilization, speed to deploy, and operating costs (such as space, power, and cooling). However the known side effect of virtualization is the creation and lack of management of virtual machines, as there is no purchase requisition for the hardware it was common to create extra virtual machines for the convenience of testing and trials. This become further complicated with the desktop virtualization, where pools of virtual PCs are shared by or dedicated to users, and the software license usage is no longer tied with physical hardware and the procurement process. It is important to track both the hardware (virtual machines) and software license usage in the virtualization environment.
Significance: IT Asset Management has an important role to support the business operations, and it is vital to manage IT assets whether it is owned, leased, or virtual.
Scope of IT Asset Management
With that in mind, my recommended scope for IT Asset Management should include:
1. Inventory of the IT Assets, including hardware, software, owned, leased, or virtual;
2. Centralized and/or Integrated IT Asset Database where the information can be analyzed and support various IT projects and initiatives;
3. Updating of the IT Asset Inventory via automation (more frequent) and physical stock taking (less frequent);
4. Improve the accuracy of the IT Asset Inventory;
5. Support the lifecycle of IT Assets, Procurement, Reassignment, Warranty/Maintenance Agreement, Lease Cycle, and Disposal.