Management Update: IT Asset Management Stages Form the Stairway to Success

Transcription

1 IGG P. Adams Article 10 September 2003 Management Update: IT Asset Management Stages Form the Stairway to Success Gartner provides step-by-step advice for moving an IT asset management implementation from the entry level to higher levels. At higher levels, IT asset management provides significant financial and strategic value to the enterprise. Gartner provides step-by-step advice for moving an IT asset management implementation from the entry level to the higher levels. At higher levels, IT asset management provides significant financial and strategic value to the enterprise. Making IT Asset Management Programs Successful Sound strategies, clear requirements and patience make IT asset management programs successful. Sustaining positive financial results from IT asset management programs requires process design and appropriate execution by dedicated personnel whether in-house or from external service providers. There is no such thing as a big, one-time payback from IT asset management. It is a series of incremental steps or stages that lead to savings over time. The integration of asset management with other back-end systems will yield savings but the true value is in the holistic view of the environment. Gartner s business process maturity model for IT asset management shows that many IT asset management implementations stagnate in the chaotic and reactionary (lower) levels of this model, and fail to reach mature stages. However, with a clear definition of objectives and the right combination of people, processes and tools, enterprises can advance their IT asset management programs to the next level. The Gartner IT Asset Management Maturity Model Strategic Planning Assumption: Enterprises that systematically manage the life cycle of their IT assets will reduce cost per asset by as much as 30 percent during the first year, and between 5 percent and 10 percent annually during the next five years (0.8 probability). Although IT asset management programs have existed for years, few implementations can be considered mature. By understanding the position of its IS organization in the IT asset management process maturity model, an enterprise can better chart its path to higher levels of maturity, and identify areas to invest in people, processes and technology. As IS organizations evolve from level to level, each step will yield incremental savings and value, resulting in lowered costs and decreased risk. Gartner Entire contents 2003 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 IT asset management programs can be broken down into five levels, ranging from chaotic environments without any processes, dedicated people or tools, to mature environments with a set of tools that are fully integrated with back-end systems, tested processes and dedicated staff. The five levels are: Level 1: Chaotic uncontrolled Level 2: Reactive limited accountability Level 3: Proactive life cycle focus Level 4: Service-Oriented service-level management Level 5: Value Creation cost recovery The majority of enterprises are in Level 1 or Level 2 (see Figure 1). However, IT-dependent business processes require at least Level 3 IS management process maturity. Figure 1 Gartner s Estimate of Asset Management Penetration by Process Maturity Level 50% IT Asset Management Process Market Penetration Chaotic Level 1 Reactive Level 2 Proactive Level 3 Service-Oriented Level 4 Value Creation Level 5 Source: Gartner Process Maturity Level Action Item: IS organizations should identify the combinations of people, processes and technologies that will make it easier and faster to progress to the next level of IT asset management program maturity. Addressing Organizational, Process and Personnel Discontinuities Tactical Guideline: Tools automate support processes they do not eliminate them. The process maturity model represents layers in the evolution of asset management that revolve around changes in personnel management, as well as improvements in processes and technologies. At each level in the model, organizational, process and personnel discontinuities must be addressed. Every function for example, install, move, add and change (IMAC) processes, or procurement contributes to these discontinuities, and every functional area must modify its behavior to reduce and eliminate them.

3 To support business processes, an IT asset management program must improve management of its people, processes and technologies (as reflected in the process maturity model). Therefore, enterprises must focus on more than just buying and deploying new technologies. They must acknowledge and manage the three discontinuities organizational barriers, numbers (process design) and politics (personnel). Action Item: Enterprises that assume Level 3 is the highest level they can achieve should revisit their goals and objectives and plot a course so they can reach Level 5. Level 1: Chaos Tactical Guideline: Enterprises must focus asset management efforts on collectively implementing process, personnel and technology improvements to achieve optimal total cost of ownership, service levels and asset use. When most IS organizations decide to implement an IT asset management program, they typically have a specific problem that needs addressing. Analyzing this problem led them to identify the need for a way to track IT assets. These IS organizations are at Level 1 in the maturity model. Approximately 30 percent of enterprises are in the chaotic environment of Level 1, which is characterized by the following: Immature processes and inadequate tools to track or manage assets An IS organization that rarely knows what assets it owns, where these assets are physically located and who is using them Unused hardware assets that sit in storage rooms, with no control mechanisms or accountability Multiple technicians with the ability to access the asset inventory and make unrecorded changes to it Lack of a centralized purchasing or negotiation team; instead, the enterprise lets business units or local offices purchase assets on an ad-hoc basis Untracked IT contracts that typically sit in filing cabinets No systems to track the intellectual capital and negotiation strategies associated with acquisition Lack of sound operations management practices Ineffective planning for all life cycle aspects of IT asset management Unpredictable service, support and costs Enterprises at Level 1 also tend to have simple goals for their IT asset management programs, such as: Desiring only a basic IT asset inventory, most likely in response to a specific problem, so that the effort is project-driven Viewing IT asset management as a one-time activity, not a continuous business process

4 Level 2: Reactive When IT processes mature to a reactive state, the enterprise has reached Level 2 of the maturity model. This stage, in which the IT asset management program focuses on counting assets, is characterized by the following: IS organizations create spreadsheets or a database to help track assets. Annual physical inventories identify and catalog all PC equipment. Autodiscovery tools supplement inventory data, but linkages are weak. Inconsistently followed IMAC processes reduce the accuracy of inventory data. Reports are basic, lack detail and usually aggregate assets, making it difficult to identify and resolve problems. Inventories typically run on a project-by-project basis (for example, impending migration or software license audit) instead of being regularly scheduled. Software and hardware are usually treated as separate assets rather than being viewed as a single complex IT asset. Ownership of asset tracking processes resides within the IS organization, usually at the Tier 2 level of the help desk. Linking and sharing of data with the purchasing department occurs sporadically. Many IS organizations that have undergone merger-and-acquisition activity fit within this level because they tend to have multiple overlapping tools without centralized oversight or governance. Gartner estimates that approximately 45 percent of IS organizations are at Level 2. Enterprises at Level 2 tend to have the following goals for their IT asset management programs: Complete an annual physical inventory of hardware assets Use autodiscovery technology to help reconcile data Determine process gaps through periodic spot audits Generate reports as required Level 3: Proactive Tactical Guideline: Enterprises should establish and maintain discipline, and measure and report frequently. As enterprises move into Level 3 of the maturity model, they move into proactive management. This stage in which processes are implemented to manage the assets throughout the life cycle, from requisition to deployment to retirement is characterized by the following: Inventory data is linked with financial and contractual data to create a centralized view, in an IT asset management repository, of how the asset is performing within the enterprise.

5 Repository and autodiscovery tools are integrated with the IT service desk to provide ondemand inventories and faster Tier 2 problem resolution A cross-functional team assesses the requirements of the different departments affected by the IT asset management program Processes are well-defined, adhered to, reviewed and re-engineered when necessary A director-level position an asset manager with reporting responsibility to the IS and finance organizations leads the IT asset management implementation team Senior management sponsors activities for the IT asset management implementation Life cycle management processes are developed, beginning with point of requisition through retirement Gartner estimates that 20 percent of enterprises are at Level 3. Enterprises at Level 3 tend to have the following goals for their IT asset management programs: Form cross-functional teams for major projects Develop and maintain an operations manual Follow repeatable processes for all new IT asset management projects Create asset taxonomy for tracking Gather data to feed preparation for Level 4 IT Asset Management Tools Tactical Guideline: IT asset management tools alone do not guarantee a program s ease or success. Enterprises also need guidelines and policies for the management of their assets. Significant confusion exists regarding the term asset management, especially from an IT context. Vendors have added to the confusion by using asset management to describe autodiscovery and inventory functions, rather than the complete functionality of an IT asset management repository. An IT asset management repository contains the three primary attributes of IT asset management physical, financial and contractual. Capturing and integrating physical, financial and contractual data supports the functions needed to manage IT assets effectively and optimize their performance. Enterprises can then manage the life cycle of these assets to cut costs, reduce liability exposure, improve software compliance and better match use with contract terms. Software tools help enterprises automate the implementation of an IT asset management program while also providing valuable data about all managed IT assets. Although these tools don t eliminate the need for manual intervention, they can help reduce the need for it. Enterprises can gain some value by implementing each tool individually. However, enterprises will realize the most value from integrating tools and processes over time. IT asset management tools in and of themselves won t solve all enterprise issues related to asset management. Tools will automate but can t replace the processes that support an IT asset management program.

6 Developing an IT Asset Management Operations Manual Tactical Guideline: Because IT asset management is an iterative process, enterprises need to document processes, and then review and revamp them periodically to ensure that the program meets changing business requirements. Enterprises that have reached Level 3 in the maturity model will have well-defined processes (with accountability) that detail the practical application of the people, processes and tools that support the IT asset management program. A well-written operations manual summarizes the scope of an IT asset management program and includes the policies, guidelines, standards and processes needed to implement and maintain an asset management strategy effectively. It also records the guidelines, procedures and expectations set by the IS organization, and can be an effective tool for training and transitioning new leaders. When developing an operations manual, enterprises need to: Establish objectives and time frames Set roles, responsibilities and accountability Develop an IT asset management team organization chart Define the terminology Document all corporate policies that impact IT asset usage Include company forms Document processes for all stages of the IT asset life cycle Document the standards and exceptions process Provide a list of approved vendors for various types of IT assets To ensure that processes are understood and regularly adhered to, enterprises should identify key participants and business processes. Capturing and documenting the processes in an operations manual guarantees that new and old employees in the IS organization know about the processes and will adhere to them. Having a point of reference for processes helps ensure that they are closely followed. Without that adherence, data accuracy becomes questionable, which in turn negatively affects the decisions made based on that questionable data. Action Item: Enterprises should establish responsibility and accountability for each identified process, and campaign toward a goal of streamlining processes when feasible. Level 4: Service-Oriented Tactical Guideline: IS organizations that implement service reporting as a collection of metrics will not realize the full benefits of the approach until they link those metrics with customer satisfaction.

7 Gartner estimates that 5 percent of enterprises with a distributed, heterogeneous IT environment are at Level 4 in the maturity model. This stage is characterized by the following: Established metrics measure the IT asset management program s value. Service levels are created to meet broader business or IT goals (for example, lower total cost of ownership). Reports are run frequently. Each month, the asset management team identifies and communicates opportunities for savings to the business units. Requisition processes are automated and integrated with purchasing and enterprise resource planning (ERP) systems, enabling faster procurement as well as efficient order tracking and invoice reconciliation. Inventory levels are tracked to maintain low-cost inventory levels as well as prevent the overbuying of hardware and software. In addition to software, tracked assets usually include PCs, servers, networking equipment and telecommunications; that information is housed in a common repository. Assets are retired and disposed of according to a technology replacement plan. IT asset management team staffing has stayed constant or grown to fulfill service demands. Enterprises at Level 4 tend to have the following goals for their IT asset management programs: Using service-level metrics as a basis for planning Continual verification that service is delivered according to plan Periodic review of service delivery with business units and senior management Routine and managed communication about service delivery Performance Metrics Tactical Guideline: Defining IT asset management service levels will help asset managers clearly articulate the value IT asset management can return to business units. As IT budgets face increased scrutiny, an IS organization must improve the operational efficiency of its IT assets. Many IS organizations therefore turn to IT asset management programs to provide this data. But without a clear set of performance measures and correlation of this measurement data back to business objectives, the program s value can t be measured accurately. These metrics illustrate how the program is performing, identify new opportunities for increased savings and provide valuable insight into a vendor s performance. Ideally, an IS organization should determine its metrics before launching an IT asset management program. That way the IS organization can compare performance against the expected return on

8 investment and planned time frames (such as when a break-even point is reached). However, it is never too late to implement performance metrics. The only critical mistake would be to never create performance metrics. Furthermore, performance measures of the IT asset management program must closely align with business goals and be analyzed in the context of these business goals. Because IT asset management is not a one-size-fits-all program, enterprises must develop metrics that are specific to their business goals. Action Item: To create a meaningful set of IT asset management performance indicators that can measure asset optimization and efficiency, adopt an approach that tracks an asset throughout its life cycle, from receipt to disposal. Level 5: Value Creation Strategic Planning Assumption: Through 2010, 80 percent of enterprises that demonstrate business value from their IT asset management programs will sustain successful initiatives (0.7 probability). Even though IT asset management has existed for many years, few enterprises have reached Level 5 in the maturity model. Without assistance from vendors to drive continued program maturity, customers will stagnate at Level 4 in the model. Level 5 is characterized by the following: The enterprise has implemented all three tools of a mature IT asset management program (repository, autodiscovery and software usage monitoring). Seamless integration has been achieved with strategic systems (for example, human resources, accounts payable and receivable, general ledger, ERP, purchasing, network and systems management, configuration management, IT service desk, and problem and change management tools). Business units are charged back for computing resources. Total cost-of-ownership metrics are linked with IT asset management metrics. Data from management and business applications are used to audit business process efficiency (for example, employee productivity and cost) and effectiveness (for example, customer satisfaction) across all assets in the enterprise. IT cost recovery encompasses a broader range of user requirements and sophistication levels, with usage-based pricing models (for example, standard service and premium service). An asset management group manages the infrastructure of all enterprise workplace assets and provides easily quantifiable monetary value to the enterprise. Vendors and contracts are standardized and well-managed. Contract and license compliance is no longer an issue. Systems are managed for optimal use.

9 Continual improvements feed back into the process. IT asset management data is used to prevent problems. Metrics are revised to reflect process improvements. IT asset management is a core business process that enables business operation. Interpreting Business Data Tactical Guideline: Decision support frameworks, when coupled with the use of business analytics tools, will improve the effectiveness of business operations. Vendors of IT asset management tools try to outdo each other with the number of prepackaged reports they offer, as well as their ability to customize or create reports if the preinstalled ones do not meet the IS organization s needs. However, an unlimited supply of available reporting options will not help an asset management team understand and interpret what all the gathered data means. The data must be analyzed in the context of how it supports the business and IT objectives. Today, data support basic reporting functionality, such as counting assets and assessing migration requirements. For IS organizations to move to Level 5, the data must support cost recovery. Asset allocation, use and trending data targeted to specific constituencies will ensure that business planners and support teams have access to the different data sets that support their job functions. Using a combination of decision support and business analytics frameworks and tools, enterprises can tightly link IT spending with business impact. Recognizing that customers cannot move to this level of analytics without assistance, some vendors are moving early to address this budding market requirement. Recommendations Define goals, objectives and time frames for IT asset management assessment and implementation. Develop metrics to measure the effectiveness of the expanding sphere of the initiative and document the results. Identify tactical bottlenecks, resolve problems and continue to address the bottlenecks that are delaying the move toward process maturity. Realize that continuous IT process improvement will lead to cost savings and asset effectiveness. Written by Edward Younker, Research Products Analytical source: Patricia Adams, Gartner Research This article is an excerpt of a chapter from a new report, Winning Asset Management Strategies. The report is an offering of the Gartner Executive Report Series, a new business venture of Gartner Press that provides buyers with comprehensive guides to today s hottest IT topics. For information

10 about buying the report or others in the Executive Report Series, go to For related Inside Gartner articles, see: Management Update: Ten Major IT Asset Issues Managers Should Address, (IGG ) Management Update: IT Asset Management Is Mandatory, Not Optional, (IGG ) Management Update: Asset Managers Should Assess How Their IT Spending Stacks Up, (IGG ) CIO Update: To Control TCO, It Must Be Measured and Managed, (IGG ) Management Update: Five Sure Ways to Reduce IT Asset Costs, (IGG )