In Praise of Asset Management

Y2K robbed management of its technological innocence, but it didn’t provide a script on what to do the morning after. As the executive suite wonders how to go about upgrading the company’s management to better reflect the realities of the organization’s dependence on information and IT that Y2K revealed, you could do worse than suggesting that they start with asset management.

I know asset management is not front line stuff. I know that no senior manager would ever admit to being able to figure out the formulae for capital depreciation of this or that asset category. For a generation of managers raised in a workplace where capital depreciation on most assets was glacial, few managers had the time or energy to actually understand the details. “What’s the bottom line?” was a phrase invented by managers just so they could avoid that sort of stuff.

But the good news is that principles of asset management are category neutral, and if your company has a respectable asset management system up and running, then it will already tie in with the existing governance framework, funding structures and budget systems, as well as the business and strategic planning processes.

Your challenge as a technology manager is getting senior management to understand that, in a business world where all the players have computer networks, where the Internet and e-commerce are already more than a gleam in the eye of the fleet of foot, asset management goes beyond bar-coding the company’s wastepaper baskets. It takes care of the technological and informational substrates that make it all happen. This is way out beyond counting company desks or figuring out how to get rid of a strip mall that died the week after it was born.

Forget about all the warm and cuddly language about IT enabling the vision of the enterprise. Forget all the drivel about unleashing the company’s intellectual capital. Forget all the hot talk about knowledge management. They’ve heard it all before and they use the same kind of hyperbole in every workshop they’ve ever attended. Tell them asset management means the difference between death and prosperity.

On the hardware side of the business, they already know that IT assets need constant (and costly) attendance and administration. What they may not know is just how important the refreshment rate really is for these assets. As business demands increase, they need to be frequently refreshed with more memory, more bandwidth and, once in awhile, new machines. If you ignore these assets, the lights start to dim and pretty soon you go on life support. Your communications and automated business processes will slow down and sputter. If you don’t spend the money on infrastructure support, you will be left behind by firms that do and then you will die.

On the application side, tell them that systems are like children. They have appetites and sanitary needs and they must have their cuts and scrapes attended to. They need to be cleaned up and upgraded as the environment changes and/or demand increases.

Your biggest challenge, however, is to get senior management and every line manager in the organization to understand the company’s information holdings are assets and have to be managed as such. That means making sure, for example, that their planning processes require line managers to roll up their information requirements along with their hardware requirements. That means developing an information model for the company and its products or services that serves not only internal customers but the public and your business partners.

It’s a hard slog to break down the traditional views of asset management and to weave into an existing asset management framework the nuances and imperatives of prudent IT life cycle management. But at least you’re starting with a known quantity and appealing to generally accepted (if not always clearly understood) business concepts. This sure beats singing off some vendor’s song sheet with your hand out for more money.

Chuck Belford is president of Management Smarts Inc., a Nepean, Ont.-based management consulting and training company. He can be reached at