According to Don Barry, associate partner in global business services in the supply chain operations and asset management solutions with Armonk, New York-based IBM Corp., the ideal time to start considering an asset management program is before the business and its IT infrastructure is even up and running. But the common scenario is corporations will look to asset management after they’ve encountered a problem running the infrastructure.
The drivers are mostly economic, and indicative of current operational issues, said Barry. And, it can also be environmental, “if I’ve got something playing a certain role, how do I continue to expand that role?”
But businesses’ mentality around asset management is evolving. Companies used to consider solely reliability, availability and overall equipment effectiveness in that equation. But now, said Barry, there is recognition of factors like continuing pressures on cost and green technology, for instance.
“It really requires a mature organization to understand what’s going to be needed to assess and execute a lifecycle management strategy,” he said.
Why is a lifecycle management program important?
Elisabeth Vanderveldt, vice-president of business development, with Montréal-based IT services and consulting firm Conamex International Solutions Corp., said, “IT can make really intelligent decisions around what they should get rid of, and they might even find they have more money in the budget and they can start taking a look at newer technology and see if they can bring it in-house. Without that big picture, they just end up spending more and more money than had they been proactive.”
“It’s a full cycle, it’s also a risk management tool and a disaster recovery process as well,” said Vanderveldt.
Darin Stahl, lead research analyst with London, Ont.-based Info-Tech Research Group, said, “It’s also beneficial for those moments that are just completely out of your control like mergers, acquisitions, uncontrolled corporate growth either organic or inorganic. IT leaders without this toolset are now charged with pulling all this information together on short notice. That could be diminished considerably in terms of turnaround time and effort for IT guys if they have a holistic asset management program in place.”
What’s the best way to introduce a lifecycle management program?
Stahl said, “In the end, a real holistic way [by the IT department] takes into account the procurement side — ordering and who’s actually doing the ordering, vendor management, standardizing on the vendors. And then it needs to go down into finance who asks if the company is taking into account any leasing management, depreciation, residual values, tax issues.” “Once these things are in the door, that’s when the real costs start to pile up for assets because it’s about running them, configuration and control, maintenance and tracking, licenses, integration with security, standardized images, what’s on the machine, what’s running. That kind of stuff will allow you from an IT perspective to become process efficient and lower your costs.”
“Lastly, you want to be able to look at all of this data in a holistic fashion to do budget reporting, performance analysis, and strategic planning not just from an asset and financial capitalization perspective, but really from business value.” Vanderveldt said, “You have to find a buy-in from the CIO or CFO because it is a process that’s going to end up, upfront, having some time costs associated with it. Ninety-nine per cent of companies we come across don’t have a proper asset management process in place. It starts with the education and realization that the server, for instance, is running your business and the minute it goes down, you’re going to put yourself in an unbelievable risk.”
What are the most common mistakes companies make?
Vanderveldt said: “One mistake is lack of ownership, in other words, someone dedicated to starting it up. And lack of program maintenance because if you don’t maintain it, things start to slip in. That includes policies and procedures where, for instance, people aren’t keeping new employees in-tune with computer guidelines, or checking in and out hardware. All that gets taken care of under an asset management program.”
Stahl said, “Often, they only will include their laptops and PCs. They won’t include their LAN gear, but they should. The biggest mistake is to only consider what’s obvious and that are immediate pain points.”
“Each one of those domains — PCs, printers, equipment on LAN — have very different refresh cycles. On LAN equipment, we’ve seen gear running for nine years, that’s probably too long. Typically IT isn’t looking at that stuff in a lot of shops within asset management yet those are a big driver of their SLAs and service delivery; they’re focused so much on their PCs and printers because that’s where they get their helpdesk calls.”
“Secondly, when they get a program in place and work with procurement or purchasing, IT will over-specify what they want from a technical requirements list and that ties procurement’s hands from getting the best product. There has to be an idea of ‘just good enough’ for the business value. At the end of the day, procurement is trying to buy off the standard catalogue.”
“And, lastly, don’t get hung up on hard refresh dates. We’ve seen refresh dates change on different domains over the years. It was every three years for desktops for the longest time and some of that was just tied to the fact that it was being leased, and now we’re seeing that the average has increased to five to six years. That tells you a lot about extending the investment and getting the most out of that spend. So whether it’s market forces or Web 2.0, all those things have to be considered.”
When establishing a process, tackle hardware or software first?
Stahl said, “I would suggest you want to talk about software first because that’s really going to drive your hardware requirements especially on the desktop. Those are the tools that they use to do their jobs and drive business value, not the hardware. Then tackle your hardware, desktops and laptops and begin to move toward your LAN infrastructure and printers.”
But Vanderveldt suggests a different approach. “It’s a simultaneous process of hardware and software. And in addition to that, it’s the policies and procedures to utilizing the systems. Especially if your employees or colleagues are abusing or misusing them, like bringing things into the office they shouldn’t be and accidentally corrupting your system. The whole plethora of day-to-day operations also gets covered in an asset program.”
Should companies use lifecycle software? What about an Excel spreadsheet?
Experts agreed that although Excel spreadsheets are a ubiquitous and relatively inexpensive tracking tool, it can be messy and hard to manage.
Vanderveldt said, “Absolutely not should companies use an Excel spreadsheet. Whether it’s internal or you’re working with an IT outsource, you need a central repository for all that information. You can do something in a SharePoint Server infrastructure. We use Microsoft Office Groove, an easy and robust tool for something like software asset management, that will allow you to get the process going with little training and setup. It’s a collaboration tool that lets the IT dept work internally with other staff members from which they might need to gather information, like procurement. You can share this workspace with any of your vendors and they never have to pass into your firewall.”
“Excel is fine but the issue is how do you cleanly collaborate on setting up the process with departments and vendors?”
Don Barry, associate partner in global business services in the supply chain operations and asset management solutions with Armonk, New York-based IBM Corp., agreed: “You don’t want to go manual which is really what a spreadsheet is. The systems out there today allow you to manage workflow and incidence records. It forces businesses to write plans, and the number one thing I find is people don’t write plans to schedule their people, integrate with the maintenance and procurement.”
But in whose budget does the program fall?
Vanderveldt said: “It belongs in the IT budget because the people in essence who should be running it are those in the IT department. They’re the ones who are making sure things run, they’re the mechanic. In reality it’s not a big expense, it’s an upfront cost. You implement it once, then it becomes basically a maintenance tool but also a risk management tool. You can foresee what your needs are going to be and budget for them accordingly.”
How does an organization evaluate their lifecycle management process?
Stahl said, “The biggest result is can you reveal costs that enable some accurate measurement of your IT investment? Is the decision-making and the cost justification done with real numbers or is it back-of-envelope and intuition? Are you getting to the point where your change control is being driven not just by helpdesk tickets, but by forecasts so that you’re moving ahead and tying into other business cycles? Can you demonstrate true and tighter cost management? Are you mitigating risks…so that you’re helpdesk tickets and your failure rates have dropped?”
Barry said, “There are some leading practice indicators, but ultimately you know because you’re getting your overall equipment effectiveness — it’s if your work truly is 80 per cent planned and 70-80 per cent proactive. The ultimate maintenance person should be rewarded when things don’t break, not because he’s good at fixing them when they do break, although he needs to be good at fixing them when they do break.”