Next-Generation Asset Management and IT Financial Analytics: Optimizing IT Value in a World of Change An ENTERPRISE MANAGEMENT ASSOCIATES (EMA ) Research Report Written by Dennis Drogseth May 2014 Sponsored by: IT & DATA MANAGEMENT RESEARCH, INDUSTRY ANALYSIS & CONSULTING
Table of Contents Executive Introduction... 1 Methodology:... 1 Demographics... 1 Organizational Dynamics... 2 Functional Priorities and Technology Adoption... 3 Managing and Optimizing Asset, Financial and Service Management Data... 4 Service Modeling, CMDB and ADDM... 5 Next-Generation Asset Management Extensions... 6 Cloud... 7 Summary Conclusions... 7 About Scalable... 8
Executive Introduction How are IT organizations making the transition from a cost-centric, back-office operation to a valuedriven business partner? The following Enterprise Management Associates (EMA ) research report across more than 150 respondents holds at least a few clues. Methodology: This research involved 168 respondents in North America who were involved in IT asset management and IT service management. Data was collected in April of 2014. Demographics Some of the key points on demographics were: EMA surveyed only businesses and organizations with 250 or more employees. But beyond this there was a fairly even spread, with 17% of the businesses surveyed having more then 20,000 employees, while on the other hand 21% had fewer than 1,000. The five leading verticals were: manufacturing, finance/banking/insurance, healthcare/medical pharmaceutical, government, and retail/wholesale/distribution. High executive content: 17% were director-level or above, and 17% were C-level within IT. 11% were non-it executives and professionals involved with ITAM services. The average IT budget was more than $10 million, and 38% of IT budgets showed an increase in 2014 of more than 10%. Page 1
Organizational Dynamics One of the most critical questions pursued in this research was to what degree and in what dimensions are IT asset management and IT service management (including operational values) coming together? This was viewed as significant because once the transition from cost to value is made, IT assets need to be understood, managed and optimized in context with the delivery of IT services. In an ideal world, this would include virtually all OpEx and CapEx IT assets, from desktops, to data centers, to application portfolios, to cloud and telecommunications resources. As these assets are brought together, or in a growing number of cases modeled to show how they contribute to definable services, IT s ability to account for its contributions to the business or organization it serves becomes real and meaningful for the first time. Figure 1 shows that 43% of the respondents indicated that asset and service management were already being combined, at least in part, while 23% of respondents had committed plans to do so in the future. The 43% figure for combined asset and service management is about 10 percentage points higher than those indicated in past research, indicating a gradual trend in this direction. How would you characterize your company s existing environment? Asset management and service management are managed together 43% Asset management and service management are managed separately 34% Asset management and service management are managed separately today but will be managed together in the future 23% 0% 10% 20% 30% 40% 50% Figure 1: 66% of respondents indicated that IT assets and IT services were either currently managed together, or else that there were plans to do so in the future. This indicates a rise over past research. (Sample size = 168) Page 2
Functional Priorities and Technology Adoption When asked about their top two service-related asset management priorities, managing and optimizing assets for changing requirements was a clear winner (Figure 2). This becomes all the more dramatic when you consider that the next two areas target lifecycle, and the fourth highlights the transition to cloud. What are your company s top two (2) service-related asset management priorities? Managing and optimizing IT assets for changing requirements 26% Managing and optimizing IT HW and or SW assets across their full lifecycles (introduction through retirement) Lifecycle planning of IT application services from a cost/value perspective Supporting the move to virtualization and cloud Improved service levels (SLAs) and delivering applications to the business faster 15% Improving accuracy of inventory records 14% Management of mobile devices 14% More automated software asset management/license management 13% Managing vendor/service providers as integrated resources 13% Providing IT and LOB executive management with effective financial reports 11% Consolidating silo-based asset management for a holistic, service-based view 11% Optimizing telecom-related expenses 11% More effective analytics for overall financial optimization across both opex and capex concerns 10% Linking asset management with service catalog and service request systems 8% 0% 5% 10% 15% 20% 25% 30% % Valid Cases (Mentions / Valid Cases) Figure 2: Managing IT assets to address changing requirements clearly leads in functional requirements for service-aware asset management especially given the focus on lifecycle management and the transition to cloud in runner-up categories. (Sample size = 168, valid cases = 168) Page 3
Managing and Optimizing Asset, Financial and Service Management Data While there is a clear and progressive trend to combine IT asset and service management, challenges in managing data still remain fairly unprogressed. Figure 3 shows that spreadsheets dominate; however, an asset management database, a positive indicator, comes in as runner-up. Average perceived accuracy was about 90% (which is probably optimistic based on other EMA research and consulting). An average of ten hours a week is spent resolving data accuracy issues. Where is the information from your company s financial planning, service planning, and asset management system stored? Spreadsheets 34% Asset Management Database (versus asset management product from a vendor) 31% Multiple local DBs 29% Vendor-provided asset management product 23% Inventory or discovery tools 22% Paper Outsourced service (SaaS) resource Federated CMS (including asset DB and CMDB) 17% CMDB 15% Outsourced consulting service 12% Visio 12% Other (Please describe) 1% 0% 5% 10% 15% 20% 25% 30% 35% 40% % Valid Cases (Mentions / Valid Cases) Figure 3: Even if the trend to combine asset and service management in theory and practice shows signs of progress, data management remains something of a struggle, with spreadsheets still the most dominant source of asset data. (Sample size = 168, valid cases = 168) Page 4
Software asset management, or software license management, remains a critical and still very challenging requirement. Figure 4 shows that 57% believe they optimize software license management very well for most or all vendors. However, other data shows that only 64% currently track usage for desktop software. Does your company have a software asset (license) management system in place? Yes 73% No 19% Don t know 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% Figure 4: Software license management remains a major challenge and an essential building block for effective IT asset management, indicating that they had some level of software license management in place. The three most critical environments were Microsoft Office 365, VMware and HP. (Sample size = 168) Service Modeling, CMDB and ADDM One of the most effective ways to optimize service and asset interdependencies is through service modeling, and 62% of respondents claimed that they were at least beginning to use service modeling to link assets with owners, customers, and physical interdependencies. Moreover, 57% had a CMDB either deployed or planned (14% didn t know). Figure 5 shows that there is a definite relationship between having or planning to have a CMDB and linking asset and service management together. Does your company have a CMDB or CMS currently deployed or planned? By How would you characterize your company s existing environment? Asset management and service management are managed: Separately Separately today but will be managed together in the future 5% 17% Together 23% 49% 54% 33% 72% 29% Yes No Don t know Yes No Don t know Yes No Don t know Figure 5: Those with a CMDB deployed or planned have a clear edge in at least planning to integrate service and asset management for more value-based optimization of IT. Blue represents CMDB deployments current or planned. Of these, 89% will support asset management in some way via the CMDB. (Sample size = 147) Page 5
Some other highlights for those with CMDB/CMS deployed or planned include: 2X more likely to have automated asset and inventory in place and update at least multiple times a day Significantly more likely to link multiple data sources meaningfully Nearly 2X more likely to track usage for desktops and reassign unused licenses 3X more likely to have a service catalog in place Twice as likely to get an increase in IT budget as those without Next-Generation Asset Management Extensions Here, research data showed that 66% of respondents felt that application portfolio planning and optimization was important or very important. Significantly 31% had integrated portfolio planning into their asset management strategy already, and a dramatic 37% planned to do so within 12 months, suggesting that this combined view of cost and value is finally coming of age. How are they doing this? A small majority, 52%, are looking for combined input from dialog and analytics, while the remainder (primarily through dialog, versus primarily through analytics) were virtually even at 25% and 24% respectively. Other areas of expansion worth noting include: 48% are already integrating Green IT requirements for power, heating and/or facilities into their broader asset management direction. 58% have incorporated the management of some enterprise assets into their broader asset and service management directions. Of these building/facilities costs, utilities and power costs across the enterprise, shadow IT costs, and LOB costs for application usage lead. Manufacturing costs and transportation costs came in fifth and sixth. Page 6
Cloud Not surprisingly, 71% of respondents were already encountering some form of cloud initiative in their environments, and of these, 64% view cloud as impacting their asset management directions either critically or significantly. Only 1% saw cloud as having no impact. How has the advent of Cloud computing and/or Cloud services (qualitatively) impacted your company s asset management requirements and strategy? Cloud is changing how we measure costs and asset investments 39% Requires higher levels of automation 38% Changes organizational ownership in some areas of asset management 37% Adds new wrinkles and makes asset management more complex 37% Adds political complications, not sure who does what/owns what 37% Requires more real-time awareness 35% Takes away some asset management requirements: makes it simpler 31% Ups the bar on how we account for infrastructure and service usage 22% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% % Valid Cases (Mentions / Valid Cases) Figure 6: This data shows a wide range of impacts on asset management from cloud with changing how costs are measured and higher levels of automation taking the top two slots. But organizational impact and political complications also scored high. A meaningful percentage felt cloud made asset management more complex than made it simpler. Not on this chart, but significant, is that 56% felt that cloud made asset management more service-centric, and 67% felt that cloud made asset management more cross-domain. (Sample size = 120, valid cases = 120) Summary Conclusions Research data in 2014 shows a clear move toward a more service-oriented and service-aware approach for IT asset management and IT financial optimization. This transition is critical if IT is to evolve from being a cost center to a true value provider with a clearer understanding of costs/benefits and impact for its delivered services. Other EMA research on analytics, CMDB adoption, cloud and IT service management provide a complementary set of insights suggesting both strong cultural and organizational changes, as well as an increased move to service-aware process focus. While no one IT organization that EMA has so far engaged with shows full levels of integrated service and asset management across all domains, the direction is positive. Trends like cloud, agile and the consumerization of IT are serving as catalysts for this move, rewarding more dynamic and integrated approaches, and punishing siloed, purely cost-driven models by reduced investments and diminished valuations of IT. Page 7
About Scalable Founded in 2008 as a SaaS company, Scalable s mission is to deliver operational expense reduction, efficiency and transparency to IT organizations through usage powered products that cut software costs and drive financial control of IT. Its Asset Vision offering provides integrated inventory, discovery and normalization underpinned by forensic software usage metering while supporting the needs of today and tomorrow s computing platforms. With an emphasis on integration to enable best of breed implementations it can readily adapt to improving current IT infrastructure performance. Learn more about Scalable s solutions and services for enterprise organizations at www.scalable.com or www.scalable.com/resources/blog/ You can also follow Scalable on Twitter, Facebook or LinkedIn. About Enterprise Management Associates, Inc. Founded in 1996, Enterprise Management Associates (EMA) is a leading industry analyst firm that provides deep insight across the full spectrum of IT and data management technologies. EMA analysts leverage a unique combination of practical experience, insight into industry best practices, and in-depth knowledge of current and planned vendor solutions to help its clients achieve their goals. Learn more about EMA research, analysis, and consulting services for enterprise line of business users, IT professionals and IT vendors at www.enterprisemanagement.com or blogs.enterprisemanagement.com. You can also follow EMA on Twitter, Facebook or LinkedIn. This report in whole or in part may not be duplicated, reproduced, stored in a retrieval system or retransmitted without prior written permission of Enterprise Management Associates, Inc. All opinions and estimates herein constitute our judgement as of this date and are subject to change without notice. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies. EMA and Enterprise Management Associates are trademarks of Enterprise Management Associates, Inc. in the United States and other countries. 2014 Enterprise Management Associates, Inc. All Rights Reserved. EMA, ENTERPRISE MANAGEMENT ASSOCIATES, and the mobius symbol are registered trademarks or common-law trademarks of Enterprise Management Associates, Inc. Corporate Headquarters: 1995 North 57th Court, Suite 120 Boulder, CO 80301 Phone: +1 303.543.9500 Fax: +1 303.543.7687 www.enterprisemanagement.com 2905-Scalable_Summary.060514 Page 8