Active Asset Management


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Active Asset Management

  1. 1. Active Asset Management White Paper October 14, 2003 © 2004 Altiris Inc. All rights reserved.
  2. 2. ABOUT ALTIRIS Altiris, Inc. is a pioneer of IT lifecycle management software that allows IT organizations to easily manage desktops, notebooks, thin clients, handhelds, industry-standard servers, and heterogeneous software including Windows, Linux, and UNIX. Altiris automates and simplifies IT projects throughout the life of an asset to reduce the cost and complexity of management. Altiris client and mobile, server, and asset management solutions natively integrate via a common Web-based console and repository. For more information, visit NOTICE The content in this document represents the current view of Altiris as of the date of publication. Because Altiris responds continually to changing market conditions, this document should not be interpreted as a commitment on the part of Altiris. Altiris cannot guarantee the accuracy of any information presented after the date of publication. Copyright © 2004, Altiris, Inc. All rights reserved. Altiris, Inc. 588 W est 400 South Lindon, UT 84042 Phone: (801) 226-8500 Fax: (801) 226-8506 BootW orks U.S. Patent No. 5,764,593. RapiDeploy U.S. Patent No. 6,144,992. Altiris, BootW orks, Inventory Solution, PC Transplant, RapiDeploy, and RapidInstall are registered trademarks of Altiris, Inc. in the United States. Carbon Copy is a registered trademark licensed to Altiris, Inc. in the United States and a registered trademark of Altiris, Inc. in other countries. Microsoft, W indows, and the W indows logo are trademarks, or registered trademarks of Microsoft Corporation in the United States and/or other countries. Other brands and names are the property of their respective owners. Information in this document is subject to change without notice. For the latest documentation, visit
  3. 3. CONTENTS Executive Summary ........................................................................... 1 Active Asset Management Landscape ............................................... 3 Introduction ....................................................................................... 4 1. Implementation 4 2. Inventory Management 4 3. Sourcing, Procurement and Provisioning 4 4. Digital Asset Management 4 5. Asset Management Processes 5 6. Service Management 5 7. Availability 5 Best Practices .................................................................................... 7 1. Getting Started 7 Lifecycle Defined 7 2. Planning 9 Design 10 Implementation 10 Metrics 13 3. Inventory Management 15 Detection 15 Management 15 Mergers, Acquisitions and Divestitures 16 4. Procurement and Provisioning 17 Supplier Management 17 Invoice and Stores Management 18 5. Digital Asset Management 18 Contract and License Management 19 Compliance and Anti-piracy 20 6. Asset Management 20 Change Management 20 Distribution Management 21 Configuration and Release Management 22 Recycling Management 22 Active Asset Management Versus ERP Systems 23 Regulatory Requirements 24 7. Service Management 25 Incident and Problem Management 25 ITIL 26
  4. 4. Service Level Agreements 27 8. Availability 29 Security 30 Conclusion ....................................................................................... 31 Acronyms and Definitions ............................................................... 33 References ....................................................................................... 34 Appendix: Altiris Active Asset Management Offerings ................... 35
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  6. 6. EXECUTIVE SUMMARY Organizations install IT systems for the vital business value they provide. Minimizing costs is important, but not the paramount goal. To derive maximum benefits from the organization’s asset portfolio, asset management best practices are needed throughout the lifecycle phases. “Inefficient or nonexistent These phases include: hardware asset • Request management processes • Procure add 7 percent to 10 • Deploy percent per year to the total cost of ownership. • Manage This can be $560 to $800 • Recycle per user annually.” Applications and related infrastructure exist to deliver business value. Very —Bill Kirwin few business models today could consistently outperform current Vice President & Research Director competitors or new entrants, unless computing agility and efficiency are Gartner well-tuned. “Inefficient or nonexistent hardware asset management processes add 7 percent to 10 percent per year to the total cost of ownership. This can be $560 to $800 per user annually,” said Bill Kirwin, vice president and research director for Gartner. According to Gartner, the inefficiencies of poor software asset management are even greater. Active asset management can squeeze top value from existing and future IT investments through better planning, allocation, and productivity of assets. Active asset management works with client management systems and server provisioning systems to centralize asset control across the enterprise throughout the lifecycle. Architected properly, these three areas are very complementary. The overall payback includes: • Up-to-date application distribution • Reliable computing performance and availability • Productive and responsive system administrators • Fewer desk-side interruptions by IT support staff • Empowered end users • Substantial cost savings This white paper describes recommended best practices for Information Technology Asset Management (ITAM)—physical as well as digital assets— and reflects the experience of Altiris solutions at customer engagements. Active Asset Management > 1
  7. 7. It is worthwhile to note that different organizations exhibit differing levels of readiness and need for asset management functionality, processes, and discipline. The exact sequence and approach for implementing asset management will vary. This document considers the relevant factors across the IT infrastructure management landscape, and then examines in detail the physical, financial, and contractual aspects of asset management. Effectiveness Equipment Software applications Deployment Continuity TCO Maturity Readiness Skills Requirements Resources Best practices Reliability Availability Quality assurance Performance Security Customers Employees Suppliers Partners Flexibility Speed Creativity Responsiveness Strategy 2 < Active Asset Management
  8. 8. ACTIVE ASSET MANAGEMENT LANDSCAPE The diagram above depicts relationships among the concurrent management and technology focus connected by active inventory and service management. The asset lifecycle is an ongoing cradle-to-grave discipline, with recycling/retiring of assets. A diverse portfolio of asset relationships are managed to optimize asset productivity and total cost of ownership (TCO). Active Asset Management > 3
  9. 9. INTRODUCTION 1. Implementation If one organization’s staff is comprised of operational “custodians” while a competitor’s staff is comprised of innovators, which organization do you think will prosper? You can leverage scalability and repeatability by gaining strategic knowledge of assets by accurately knowing: Where is it? Who is using it? Is it sufficient/excessive? How much is it costing? Is it meeting the business needs? Aligning people, processes, and policies enables the right technology to be distributed to the right users. Progress in maturity and readiness enables moving beyond the chaotic and reactive phases, to the higher level proactive, service, and value phases. Streamlining workflow in the phases based on best practices will ensure poor practices are not automated. 2. Inventory Management Inventory solutions can provide seamless integration with asset management processes, configuration management, and service management workflow. A strong inventory solution is the epicenter and reliable source of truth for a top caliber asset management initiative. Knowing what you have and where it’s located empowers staff to deploy, manage, and secure the infrastructure. Automating routine tasks enables staff to focus on providing more value added at reduced cost. 3. Sourcing, Procurement and Provisioning Reducing non-standard purchases provides significant resource savings and lowers TCO for assets. Establishing best practices for requests, approvals, fulfillment, and retirement will proactively control what enters the environment and how it is supported. Organizations often see a proliferation of heterogeneous hardware, software, and services. Best practices allow firms to regain control, efficiency, and effectiveness of assets. 4. Digital Asset Management Intellectual property exists in many forms. Best practices are needed to control and secure their use. Organizations’ balance sheets reflect brand equity, secret formulae, and proprietary processes that are usually stored digitally. The vulnerability of these assets to viruses, vandalism, piracy, or disaster continues to compel a corporate governance mandate to know where assets are, who has them, and why. Leases, warranties, and maintenance fees left unmanaged will inflate TCO and reduce return on investment (ROI). Managing digital property is necessary to avoid penalties, fines, vandalism, theft, and intrusion. 4 < Active Asset Management
  10. 10. 5. Asset Management Processes Downsizing and expansion sometimes occur in the same organization simultaneously. Assets are most vulnerable during periods of change. You may be planning a mass deployment of refreshed computers or images. Effective asset management enables lower support, software delivery, and backup costs. Help desk incidents are linked to asset characteristics, contracts, configurations, and TCO. Higher levels of service satisfaction results as wait queues, resolution times, and escalations decrease. Non- compliance risks are managed by capturing versions, quantities, license terms, entitlements, and maintenance coverage. Information Technology Infrastructure Library (ITIL) principles further guide standardization and consistency. 6. Service Management Active asset management incorporates a tightly integrated help desk with follow-through execution. Incident management is linked to procurement, provisioning, and contracts via automated inventory, automated software distribution, and the central asset repository, which contains important usage attributes such as characteristics, configuration, costs, and contracts. Resolution durations are compressed due to informed associations of user, location, asset characteristics, contracts, serial number, and so on. Frequently, the need to escalate incidents to more senior, expensive workers is reduced or eliminated. Dispatching of desk-side visits is reduced. Browser-based capabilities mobilize and empower the support staff as well as end users. An important goal is to link resource allocation within shared services and intra-firm pricing more closely to actual demand and supply conditions based on reliable metrics. This discipline helps avoid waste and inefficiency and relies on accurate and non-biased processing of asset management information. Comparison and evaluation of alternatives cannot be effectively weighed without reliable asset management lifecycle data that captures attributes and usage metrics about configurations, characteristics, contracts, and costs. 7. Availability In the absence of robust, fault-tolerant and up-to-date systems, an organization’s health suffers. Enterprises rely on their systems to transact business, interact with customers, and manage stakeholder relationships. When many less-skilled hands touch mission-critical systems, the probability increases that uptime, and consequently, cash flow can be at risk. Suppose a consumer goods organization invests millions in online systems. After significant investment in tailored application development, Active Asset Management > 5
  11. 11. the organization is slow to roll-out application upgrades, bug fixes, security patches, or new operating systems. Without strong release management, application management, and active asset management across a portfolio of IT investments, the ability to operate with consistency and excellence is impaired. 6 < Active Asset Management
  12. 12. BEST PRACTICES 1. Getting Started Many top-caliber organizations mistakenly decide on vital matters with insufficient information. If these same organizations would refine and automate their practices, then more intelligent, comprehensive, and effective choices could be made. If your IT staff is comprised of “custodians” while your competitor’s staff is comprised of innovators, your organization’s prosperity will surely lag. Why not empower workers to pursue core mission activities instead of mundane tasks? Why not leverage scalability and repeatability by gaining knowledge of vital, often strategic, assets by accurately knowing: • Where is it? • Who is using it? • Is it performing? • Is it sufficient/excessive? Aligning people, processes, and policies enables the right technology to be distributed to the right users, because the knowledge network increasingly is the business. Raise maturity levels by progressively adopting asset management best practices. As an organization’s readiness matures, it can move beyond the chaotic or reactive phases to the higher ground of proactive, service, and value phases. Climbing the ladder of success using a progressive ITAM discipline is frequently endorsed by experts such as Gartner. Assets comprising the knowledge infrastructure yield operational, tactical, and strategic metrics. Without access to these metrics, decisions are made in the dark. Existing technology investments are often under-utilized, over- supported, or both. Better asset management enlightens strategic technology decision-making. Surprisingly, some organizations are not fully aware of the benefit origins and efficiencies that ITAM offers. This document explains business drivers, isolates the benefit sources, and reviews asset management practices to help launch capabilities, harvest results, and ingrain best practices into your culture. Lifecycle Defined Most people realize that purchase prices are not the whole story. Suppose a child was offered an affordable puppy from a neighbor. Before accepting, a parent would want to consider the lifetime of a dog and all recurring costs of food, medicine, housing, training, and even the possibility of health coverage and liability insurance. The total costs are much more than merely the initial costs. Active Asset Management > 7
  13. 13. Suppose a networking company offers what appears to be an inexpensive software accessory to attract clientele. You need to know the associated support costs to maintain the application throughout the lifecycle. Furthermore, what implications exist for inter-operability, standardization, architecture, programming languages, security, archiving, and other factors? Gartner estimates the cost to purchase a computer tends to average only 20 percent of full lifecycle costs. Even the prospect of seemingly less expensive handheld devices attract costs and risks during the phases of an asset’s lifetime. Considerations about installation, usage, contracts, support, retirement, and continuity require significant lifecycle attention to attain efficiency across the asset management discipline. A multitude of lifecycle factors need to be tracked to enhance coordination and achieve efficiency among users, usage, contracts, warranties, locations, costs, configurations, and characteristics of IT assets. To accomplish these objectives, a suitable asset management program is required. 8 < Active Asset Management
  14. 14. 2. Planning Establishing an asset management discipline and capability entails a project plan that initially identifies inefficiencies in control at the asset, infrastructure, and enterprise levels. Ideally, an objective team assembles to assess workflow, review operations, and plan strategy for asset lifecycle issues, problem causes, and desired outcomes. A phased project plan outlining specific milestones and resource requirements can demonstrate early successes to build consensus and momentum. By aligning tactical IT efforts with core mission priorities, appropriate low- hanging fruit is seized first. Drilling deeper into workflow dependencies, bottlenecks and other friction points can reveal problems that when solved can yield quick benefits. Some steps are performed in parallel, others sequentially. Regardless of whether external experts, internal talent, or a combination approach is used, these factors common to project management excellence are called for: • Effective Executive Sponsorship and Change Control representatives • Multi-disciplinary buy-in (for example, Finance, Procurement, HR, Legal, and so on) • Clear scope, responsibilities, deliverables, dependencies, and project accounting • Sufficient project team training and access to subject matter/business unit experts • Frequent communication of incremental team successes to stakeholders • Tangible measurement of interim and end-point benefits Obtaining sponsorship and motivation across the organization is facilitated by preparing a thorough business case justification. The business case presents the problem definition, alternatives considered, strategic rationale, proposed solution, resource requirements, expected benefits, benchmarks, and metrics. The asset management initiative involves and affects multiple departments and perspectives. Applications that leverage standards such as ITIL are valuable checkpoints for best practice methodologies and workflow. Ongoing communication, education, and internal marketing is vital to ensure that mid- and senior-level stakeholders comprehend and participate in the objective setting and attainment. The multi-disciplined nature of resulting benefits is rich in potential and therefore requires diverse representation on the steering committee. Specifically, components of the infrastructure that are impacted include: • Asset productivity • Labor productivity Active Asset Management > 9
  15. 15. • Service level attainment • Outsourcing and chargebacks • Working capital efficiency • Sourcing and suppliers • Legal compliance • Network and e-business reliability • Security vulnerability and business continuity • Organizational coordination • Mergers, acquisitions and divestitures Design In consultation with stakeholders, the design phase aims to capture asset related lifecycle management attributes. Namely: • Costs • Characteristics • Configurations • Contracts Depending on the tailored needs of an organization, different levels of granularity are called for. A significant portion of design incorporates business process mapping and workflow management. Dependencies, hand-offs, notifications, approvals, and other business rules are reflected in out-of-the-box best practices. Because it is not wise to automate bad practices, it is important to review, update, and correct existing workflows based on best practices during the planning and design phases, prior to starting implementation efforts. Implementation Depending on an organization’s size, complexity, and maturity, the level of rigor and comprehensiveness will need to grow and evolve further. As needed, Altiris is one of the few providers of infrastructure solutions that can address all of these major areas: • Inventory • Lifecycle management • Service and incident management • Packaging and distribution • Recovery and continuity 10 < Active Asset Management
  16. 16. Remote Client Web Site/Server Application Application Software Deployment Control Recovery Admin Monitor Metering Management Packaging/ Solution Delivery The levels of organizational maturity correspond to the Altiris framework of three solution groups: Asset management objectives are accomplished in maturing phases that reflect an organization’s resource availability, readiness, process engineering, IT-business alignment, and broad capabilities. The progression moves from chaotic and reactive towards proactive, then service and value. Increasingly, asset management and service management converge. Active Asset Management > 11
  17. 17. Asset Management—Maturity Level Guidelines Level I Level II Level III Scalable, comprehensive Central asset repository Basic incident reporting hardware and software inventory Application identification and Custom Incidents system usage management inventory/associations Active asset tracking Physical audit and receiving N-level categories Bi-directional data Auto routing Software license Auto escalation management Storeroom/stock E-mail incident reporting management Invoice reconciliation E-mail notification Lease management Integrated knowledge base Contract management Integrated client management SLA reporting Integrated server management Business intelligence Pre-integrated resolution reporting and analysis tools TCO optimization Active Web reporting Auto-notification Standard reporting TCO baselining 12 < Active Asset Management
  18. 18. Metrics “Best-in-class ITAM processes commonly yield Several leading experts believe that an effective asset management program can achieve as much as a 30 percent reduction in annual TCO an annual savings of 20 costs for those assets. For example, “Best-in-class ITAM processes percent to 30 percent over commonly yield an annual savings of 20 percent to 30 percent over the the average total cost of average total cost of ownership,” according to Jack Heine of Gartner. ownership.” To illustrate, researchers measured cost reductions from asset management —Jack Heine Gartner at a sample 1,000-PC environment. The metrics determined a $713 million cost improvement related to performing the following asset lifecycle activities better: Activity With Asset Without Asset Cost Cost Management Management Reduction Reduction $ $ % $ Planning 831 633 -24 -198 Procurement 182 473 160 291 Installation 260 278 7 19 User support 754 1077 43 323 App development 1,157 1,102 -5 -55 Web site management 149 183 22 34 Database management 394 563 43 169 Administration 236 225 -5 -11 Network management 240 342 42 100 Backup 40 45 14 6 Asset management 79 56 -29 -22 administration Upgrade move add change 195 93 -52 -102 Operations 315 452 44 137 Deinstallation 32 46 43 14 Decommission 16 26 60 10 Total 4,880 5,593 15 713 Active Asset Management > 13
  19. 19. As your organization gains asset management maturity, best practices become increasingly embedded in the organization’s discipline, philosophy, and culture. As decisions become more real-time within the enterprise, departmental coordination and agility also improve. Gartner researchers estimate that for larger firms, a best-in-class ITAM program can yield approximately $7 million savings annually, for a sample yearly IT budget of $60 million: Annual Sales Revenue - Two Scenarios $1 Billion $2 Billion IT costs at 5% of revenue $60 Million $100 Million IT assets at 65% budget $39 Million $65 Million Savings for best-in-class 15% 15% Cost Savings Potential $5 Mil to $7 $9 Mil to $11 Mil Mil By comparing the less mature asset management practices versus the more mature practices, we see performance improvements in key strategic metrics as illustrated below: Metric Examples Before After % of discoverable assets automatically detected accurately 52% 94% % of properly fulfilled employee asset purchase orders 45% 94% % of properly fulfilled new employee equipment provision 40% 96% % of properly installed server provisioning 22% 92% % of help desk calls escalated to tier-2 technician 45% 32% % of mobile assets recovered within two months 30% 80% Duration from equipment order to installation 21 days 2 days Duration to reclaim assets from terminated worker 38 days 9 days Duration asset resides in storeroom 27 days 4 days Average number of incidents processed per worker daily 8 14 14 < Active Asset Management
  20. 20. 3. Inventory Management Detection Automated inventory detection reveals where investments reside and whether they are performing. Inventory solutions enable control of hardware and software in cross-platform environments. Extensible agents control what data is captured and how it’s reported. Ideally, this capability exhibits low- agent footprint technology, ability to detect delta differentials, and offers many useful built-in or extensible Web reports. A new paradigm recently emerged to leverage real-time automated detection as central to the architecture. The old approach relies on several disparate sources to store when and how assets enter the environment. This event chain is only as strong as the weakest link. In contrast, active asset management is self-contained, easier to implement and easier to upgrade. The source of truth is actually detected, as opposed to what “should” be on- board based on, for example, procurement or receiving invoices. Management Inventory solutions can provide seamless integration with asset management processes and workflow. A strong inventory solution is vital because it is the epicenter and reliable source of truth for a top-caliber asset management program. Active Asset Management > 15
  21. 21. The inventory data collection updates the asset repository. The asset management processes are enabled by the real-time repository. Active asset management requires a top-caliber automated inventory capability and asset repository to ensure information is reliable, robust and up-to-date. Automated detection and ITAM provides not only productivity savings but also accuracy and real-time information. In cases where assets may lack a discoverable microprocessor (for example, IT peripherals or furniture), bar code scanning can further augment efficiencies. Looking to the future, RFID enablement is also likely to be a common feature in such instances. The graphic above depicts these important relationships from multiple points of view. For example, collect user profile information, serial numbers, and MAC addresses to simplify asset tracking. The foundation for the maturity stages of asset management relies on knowing the location, characteristics, and configurations of the asset portfolio. Knowing what you have and where it’s located empowers you to manage IT support, monitor performance, and secure the infrastructure. Automating the more routine tasks enables focusing on higher-level IT objectives as your organization’s capabilities mature. As mentioned, ERP or fixed asset systems are unable to recognize and capture usage and lifecycle information effectively. When managers and executives can access reliable inventory data, they can make effective strategic decisions. This includes leveraging supplier relationships, deploying dispatch staff or managing contract terms, and pricing for both physical and digital assets. Mergers, Acquisitions and Divestitures Automated inventory detection plays an important due-diligence role in cases of mergers, acquisitions, divestitures, and organizational restructuring, especially if short timelines and disparate geographies are factors. Specifically, suppose an aggressive timetable is faced to assess, contract, finance, and execute the acquisition of a competitor. The valuation, collateral, terms and decision-making can be greatly impacted by verifying the network of physical and digital assets within the targeted organization. In addition to due diligence, the ability to execute active asset management to deploy, segregate, manage, consolidate, and integrate the best arrangement of assets is extremely valuable. On a post-acquisition basis, and for times when organizational re-structuring occurs, managing the portfolio of networks, licenses, contracts, and workflows across geographies, phases, and timelines will further produce substantial cost reductions, culture and policy integration, and overall effectiveness improvements. 16 < Active Asset Management
  22. 22. 4. Procurement and Provisioning When deploying servers, workstations, notebooks, handhelds, peripherals, or services, it is vital to adhere to active asset management best practices. Actively capturing and storing asset characteristics in the environment enables analysis, trend evaluation, and decision making across several dimensions. For example: • Lowest manufacturer defects • Least expensive support costs • Lowest printer cartridge costs • Lowest lease return penalties • Best consolidated pricing for comparable equipment • Most versatile inter-operability by skill set “Under Sarbanes-Oxley, • Visibility into equipment write-downs or write-offs the audit committee is Reducing non-standard purchases provides significant resource savings and mandated to understand lowers TCO for assets. Establishing best practices for requests, approvals, how we assess and handle fulfillment, and retirement will proactively control what enters the the risks confronting the environment and how it is supported. company. I wanted them to During periods of high growth, organizations often see a proliferation of be comfortable that we had heterogeneous hardware, software, and services. Best-practice polices and identified each and every enforcement allow firms to regain control and attain greater effectiveness. risk we face and prescribed For example, server and database consolidation initiatives leverage unified standards. Without active asset management capabilities, it is nearly specific risk transfer and impossible to know where the assets are and how they are performing. mitigation strategies for those risks we did not want Supplier Management to retain.” Several business drivers contribute to the importance of proper —Rick Navarre provisioning. For example, having visibility on audited results including Peabody Energy asset write-downs is just one of several considerations pertaining to Sarbanes-Oxley legislation, FASB, and SEC regulation compliance. For example, Rick Navarre of Peabody Energy said, "Under Sarbanes-Oxley, the audit committee is mandated to understand how we assess and handle the risks confronting the company. I wanted them to be comfortable that we had identified each and every risk we face and prescribed specific risk transfer and mitigation strategies for those risks we did not want to retain." Identifiable savings and improved supplier relations can be derived from better procurement. Assessing advantages for few versus many suppliers, consolidating orders to achieve economies of scale, make versus buy, and when to initiate or discontinue outsourcing is difficult to measure and forecast without lifecycle usage and TCO information. Active Asset Management > 17
  23. 23. Invoice and Stores Management Chasing down paperwork or electronic documents to match physical or digital property is often a tedious, demoralizing, and expensive undertaking. With automated and reliable inventory information, essential managerial and technical control tasks are performed in a more reliable, cost-effective, and timely manner. The prospect of valuable equipment or data disappearing from theft or loss is also reduced when invoices are reconciled, assets are tracked and contracts are managed. Moreover, the ability to reconcile orders with installs and usage represents a powerful source of informed decision making that generates cost and efficiency improvements. An internal supply chain applies best practices to drive cost savings and workflow gains through better: • Working capital consumption • Storage and carrying costs • Economic order quantities and reorder points • Standard catalog buying (for example, Dell B2B requisition and invoicing conformance) • Transportation and logistics • Dispatched technical personnel • Customer care • Harvesting and recycling • Resource allocation • Budgeting and forecasting These powerful business benefits are attainable by managing assets more effectively. To accomplish this, essential attributes are captured in the central repository. These include serial number, MAC address, manufacturer name, microprocessor speed, lease expiration date, warranty coverage, maintenance terms, and associated user information. Centralized receiving and activation processes provide improved accountability. Employee self- service enables requesters to obtain approvals, monitor fulfillment status, and participate in improved lifecycle management. 5. Digital Asset Management The electronic character of software exhibits qualities that merit special asset management consideration. Digital assets can be intellectual property that derives from and exists in many forms. The assets can be transferable, transportable, transformable, perishable, proprietary, and potentially volatile. Consequently, best practices are needed to effectively control and protect their use. 18 < Active Asset Management
  24. 24. Increasingly large portions of an organization’s balance sheets reflect the less tangible assets such as goodwill, brand equity, secret formulae, and proprietary processes. Therefore, it is not surprising that intellectual property management gains increased focus among corporate governance priorities. Furthermore, the vulnerability of these assets to viruses, vandalism, piracy, or disaster continues to justify executive’s approval of corrective initiatives. Numerous licensing models, restrictions, expirations and copyright protections are often applicable. It is impossible to control the location and adhere to agreement terms for these investments efficiently unless a systematized repository and reporting capability is effectively used. Most knowledge workers typically have three or more asset-associated contracts per person. Lease, warranty, maintenance, and upgrade contracts are examples of the digital asset management challenges that are described below. Contract and License Management Best practices in asset management imply that an organization is “event” and business-process aware. In the absence of proactive planning and receipt of useful role and scope based listeners that notify, contracts can be a constraining and expensive trap. By using strong contract management capabilities, an organization can avoid numerous pitfalls including: • Lease penalties for expired terms and late returns • Lease penalties for modified or upgraded equipment • Non-reclamation of upgraded assets upon end-of-term return • Lease penalties for lost equipment • Overpayment of monthly fees on obsolete assets of extended term duration • Maintenance or annual service fees on retired or non-used physical or digital assets • Property tax payments for leased assets incorrectly appearing on financial records • Inadvertent out-of-pocket payments of fixes or defects for assets still under warranty • Environmental or data security liability from improper retirement • Excessive shipping and storage costs • Insufficient records to substantiate disaster claims with insurers Active Asset Management > 19
  25. 25. Compliance and Anti-piracy Organizations increasingly rely on asset management to avoid penalties and “In January 2003 alone, comply with organizations such as the Business Software Alliance (BSA). seven U.S. companies were Around the globe, different organizations issue varying guidelines. fined between $29,000 and Compounding this compliance challenge is the variety in licensing models $120,000 each, and the BSA that can be based on per organization size, per named user, per computer, collected more than $12 per concurrent user, or other basis. In March 2003, CFO Magazine reported million in fines for 2002.” that “In January 2003 alone, seven U.S. companies were fined between —CFO Magazine $29,000 and $120,000 each, and the BSA collected more than $12 million in March 2003 fines for 2002.” Similar to Microsoft, Altiris offers three levels of packages suited for an organization’s maturity and readiness. For example, standard-, pro-, and enterprise-level agreements have varying entitlements, conditions, durations, and upgrade conditions. Organizations are gaining awareness about the need to better manage applications, subscriptions, and digital property that are paid for, versus installed, versus actually used regularly or needed. Application metering is a valuable component of asset management practices for better managing procurement, compliance, usage, recycling, and retiring of licensing and contracts. The motivation to assess over- or under-licensing continues to intensify. As IT spending diminished in recent years, software purveyors have stepped up auditing of their customers to generate needed revenue. In addition to the headache of penalties, negative publicity about illegal software use is also a motivator for better practices. Disgruntled and/or terminated employees are “I can’t imagine a CFO not a frequent source of tip-offs to the BSA as well as many diverse and lesser- being interested in what known enforcement entities operating around the world. software assets the Given the increased scrutiny, and the fact that software has become one of company has.” the largest assets in dollar terms that organizations own, "I can't imagine a —Jane Disbrow CFO not being interested in what software assets the company has," said Research Director Gartner Jane Disbrow, research director at Gartner. 6. Asset Management Change Management Organizations that thrive are ones with the ability to manage change. However, change to infrastructure is friend and foe. For example, introducing a new OS broadly can introduce new efficiency and effectiveness. Implemented poorly, it can introduce greater instability. Reliability is vulnerable when assets undergo change. Therefore, strong asset control will reinforce reliability and minimize the possibility of outages. The ability to be a gatekeeper on change and to control the ripple effects is vital. Change can be reactive or proactive as operating conditions shift. 20 < Active Asset Management
  26. 26. Downsizing and expansion can occur simultaneously in different areas of the same organization, or in boom and bust cycles. Meanwhile, technologies continue to evolve. Most managers are less interested in the latest gadgets than extracting value from existing investments, and making it all work together under dynamic circumstances. In some cases, experimental staging and roll-back capabilities are central to innovation, R&D, and daily operations. Advanced system management techniques can further improve uptime via rapid diagnosis and rapid correction when problems actually arise. The solutions allow for rapid restoration of infrastructure functionality and can help limit planned downtime to off-peak periods to further drive down overall system outage durations and enterprise costs. Asset Portfolio Financial Contractual Change management that involves vital assets is also influenced by contractual and financial conditions. Revenue impact? User quantity affected? Security Impact? Skill levels required to recover? What is the history and symptoms created by similar changes in the past? Before a change is approved, the asset implications and characteristics should be assessed. A change advisory board comprised of technology, financial and business unit executives is a recommended best practice. Distribution Management You may be planning a large systems project, such as a mass deployment of new computers, or perhaps a wide-scale migration for thousands of assets onto a new OS. You may need to lower costs associated with support, software delivery, and disaster recovery. In these scenarios, an effective distribution management strategy is a recommended best practice. Active Asset Management > 21
  27. 27. • Single deployment solution for desktops, servers, notebooks, and handheld devices • Secure management features from unauthorized personnel based on role and scope • Hands-free migration and desktop personality transplants • Patch management • Packaging • Wake on LAN enabling remote, unattended boot-up during off-peak hours • Support for Intel’s Wired for Management • Specifications for Pre-boot Execution Environment (PXE) • Support for heterogeneous operating systems; for example, Windows, Linux, and Pocket PC The right approach to software distribution reduces expenses when deploying and managing new and older IT devices through all phases of their lifecycle. Experts and end users consistently acknowledge this approach as easy, cost-effective, scalable, and much less frustrating than the “sneaker-net.” Configuration and Release Management Developments in robust configuration management simplify staff ability to manage multiple systems across disparate geographies in a scalable manner. Preventing and diagnosing mis-configurations or configuration conflicts proactively helps lower network, application and service interruptions as well as TCO. The ability to deploy applications or migrations to targeted users, roles, or locations can be linked to active directory profiles as well as configuration and release versioning characteristics of different asset types, classes, and specifications. Recycling Management Managing thousands of diverse assets requires a systematic approach to know how and when to re-purpose or de-commission. By leveraging up-to- date asset usage data and trends, appropriate decisions can be made about vendors, performance, assignment, re-assignment, retirement, and related cost controls. In many instances, the CIO needs to educate the CFO regarding the efficiencies attainable from an active asset management initiative. In North America today, the quantity of computer assets retired each month exceeds the quantity of new modern units being purchased. Best practices are essential to the recycle/retire lifecycle phase because the intellectual 22 < Active Asset Management
  28. 28. property as well as the physical property is exposed to risk. Increasingly, businesses use eBay or other auction sites to liquidate any remaining salvage values. Less-developed countries are often the recipient of resold computers. Organizations that are cautious about environmental damage, negative publicity, or inadequate data deletion practices are careful to adhere to best practices. A systematic asset management best practice will guide users and technicians on proper disposition, redeployment or destruction, and record-keeping of enterprise assets. Simply phoning a local charity or school to make a quick pickup is not wise. Detailed knowledge and history of asset attributes, usage, and trends are vital because a proper decision may require: • Technical judgment on re-assignment to different internal users • Stripping of valuable components, upgrades or peripherals • Sanitization, incineration or pulverization of hard drives to fully prevent data retrieval • Disposition in an environmentally legal and non-toxic manner • Removal from financial systems due to potential tax or lease liabilities • Removal from financial systems due to potential depreciation or asset write-down calculations per managerial accounting or SEC reporting requirements • Removal or transfer of organization’s asset tags per audit requirements • Digital assets may require reconcilement to vendor licensing, vendor maintenance, software lease contracts, or manufacturer warranty records As an analogy, consider an automobile. At some point, repairs to an old automobile become more expensive than purchasing a new auto. Assets obsolesce and are re-assigned, retired, sold, recycled, or pulverized according to different schedules. It is important to know when and how to stop supporting these physical and digital assets. Ensure their proper removal from audit, tax, vendor, and legal obligations at all city, county, state, and federal levels. Best practices will retire or recycle the physical or digital asset appropriately because the implications of improper retirement are often costly and pervasive. Active Asset Management Versus ERP Systems An accounting system or an ERP system relies on one-time capitalized historical purchase and installed fixed cost principles tied to a general ledger and GAAP hat are not well-suited for managing recurring usage costs Active Asset Management > 23
  29. 29. and lifecycle resource configuration and disposition. We know that viewing the purchase price alone is like seeing merely the tip of the iceberg of TCO. As mentioned earlier, dynamic configurations, characteristics, and contracts are important attributes in measuring and delivering services and support to stakeholders. The business proposition of lifecycle management is fundamentally about people, places, and things. Asset management integrates and complements ERP and fixed-asset accounting systems used in an organization’s financial statement regulatory compliance. Sharing data among systems is best facilitated by open standards Web architecture and extended connector availability. Regulatory Requirements Burdensome regulatory compliance continues to pose hefty administrative, financial, and legal challenges that directly impact the demand for better physical and digital asset management. Complexity and intricacies continue to rise with the introduction of legislated regulations such as Sarbanes- Oxley (corporate governance and financial transparency) and HIPAA (healthcare records and confidentiality). Sarbanes-Oxley provides for auditors to report to the audit committee, not management. The confrontational posture between auditors and management may therefore increase. The act also places responsibility for the integrity on audit-committee members who can be prosecuted by the Securities and Exchange Commission for misleading stakeholders. There is a trade-off for low audit costs and accuracy. However, proper levels of systems integrity improve self-reliance and are the best medicine in the long run. In response to rising requirements, auditing firms are implementing record fee price hikes for intensified scrutiny and diligence. Substantial savings in auditing fees as well as penalty avoidance can occur when an organization is able to automatically detect, execute, analyze, and report. Such factors need to be included in calculating return on investment and championing business case justification. Regulatory issues are also impacting requirements to disclose security breaches to the public. As of July 1, 2003, California law SB 1386 requires organizations with customers in California to disclose embarrassing information security lapses. A federal law similar to California’s is planned for U.S. Senate submission. Now is the time to gain better control over the access, encryption, and protection of non-public customer data and proprietary business intelligence. 24 < Active Asset Management
  30. 30. 7. Service Management Incident and Problem Management Active asset management incorporates a tightly integrated help desk with follow-through execution. Incident management is linked to procurement, provisioning, and contracts (for example, lease, warranty, and maintenance agreements) via automated inventory, automated software distribution, and the central asset repository containing characteristics, configurations contracts, and costs information. This synergistic approach enables overall better service, satisfaction, cost, and efficiency. For example, when a manager requests a move, more RAM, or is assigned new assets, these actions can be recorded in real-time automatically within the Altiris repository leveraging the native Microsoft Active Directory. Subsequent moves, adds, or changes can be prioritized by business need, SLA terms, or security threat for task completion by staff. Another example is a new hire (or “recent join” contractor). An agile, low- friction enterprise will ensure that the correct equipment arrives properly installed just in time with appropriate levels of stakeholder participation. Workload balancing and staff scheduling is also enabled. The collaborative approach to support boosts efficiency in staffing, asset productivity, working capital, and end-user morale. To further illustrate, suppose a new incident is assigned to a broken monitor screen. Checking the repository to see whether the asset is under a warranty, lease or maintenance contract is a cost-saving best practice. Advance notifications and action plans for upcoming lease return due dates and model type is an additional example. Mean time in wait queues and mean time to resolutions are compressed due to informed associations of user, location, asset characteristics, contracts, serial number, and so on. Frequently, the need to escalate incidents to more senior, expensive workers is reduced or eliminated. Access to asset characteristics and integration with knowledge management systems drive down average resolution cost per incident. Calls handled per agent and individual agent productivity rise. FTEs are typically re-deployable as more becomes accomplished with less. By capturing and storing software license information, non-compliance risks are managed. In addition to under-licensing penalties, over-licensing is avoided, costs are minimized, and cash flow is optimized. Automation enables capturing software versions, quantities, compatibilities, vendor policies, license terms, usage entitlements, and maintenance coverage. Software can be re-deployed, upgraded, returned or deleted for significant cost savings and support productivity gains (for example, server consolidation and storage efficiency gains). Empowering power users, end Active Asset Management > 25
  31. 31. users, and remote users with self-service opportunities will further improve efficiency and satisfaction levels. Consolidated help desk management ensures changes related to an asset enter the central repository in real time. Up-to-date and accurate asset information can be relied upon when managing TCO across the organization. Improved TCO yields ongoing organizational health and a competitive edge. ITIL Applying ITIL (Information Technology Infrastructure Library) principles to the asset management blueprint is gaining momentum. Synergies are obtained when service delivery and support (for example, help desk, single point of contact, break-fix, and so on) are managed with global standards. The ITIL organization is based in the United Kingdom and promotes best practices in processes, methodologies, and terminology. This industry group is a valuable forum for sharing ideas and techniques. Goals of the ITIL mission include: • Decrease errors and redundancies • Aid planning, analysis, and execution of infrastructure projects • Improve asset availability, reliability, and security • Define services to support organization per user needs at lowest costs • Ensure process and language consistency • Communicate roles and responsibilities • Apply lessons learned to future operations • Analyze key performance indicators 26 < Active Asset Management
  32. 32. For more information about ITIL, visit Service Level Agreements Most business units have internal suppliers, internal customers or both. The cross-charging of transfer prices in consideration of value received is intended to foster better intra-firm transactions, resource allocations, and business results. This type of service provision and receipt is often governed by a service level agreement (SLA). The agreement is essential to define the parameters of the service, for the benefit of both the provider and the recipient. To establish or re-negotiate agreements going forward, access to pertinent metrics capturing duties, warranties, variances and remedies need to be recorded and managed. Because the central asset repository stores these attributes, business unit managers can also reconcile charge-back costs against the level of services received. Help desk managers can assess performance metrics to ensure SLA objectives are attained or adjusted. For example, what constitutes overcharging or under-performing? We cannot know, manage, or control SLAs among multiple entities unless the relevant metrics, reports, and business intelligence are generated. When internal or external evaluators try to quantify the business value of IT service rendered, the conclusion can be murky, debatable, or both. Active Asset Management > 27
  33. 33. However, better service dispatching, information repository, and executive reporting definitely improve comprehension and decision-making abilities. Chargebacks vary in terms of artificiality, robustness, and degree to which transactions are at arms-length. When a “user pays” approach is possible, then costing accuracy and service quality can rise. Managing cost centers or profit centers with better metrics aids efficiency compared to gross allocations based only on headcount, square footage, microprocessors, or other units of measure. An important goal is to link shared services, resource allocation and intrafirm pricing more closely to actual demand and supply conditions by using a solid methodology based on reliable reports and metrics. This discipline helps avoid waste and inefficiency and relies on accurate and non-biased processing of asset management information. Usage-based charge-back systems are not always easy to keep realistic in comparison to external market conditions. Care is needed for resource allocations and overhead allocations to remain fair and optimal. Attaching charges to the use of a resource can discourage use of that resource or that supply source and cause internal resources to be under- used. Attaching internal charges to IT resources reflects a less modern view of IT as a cost center. Increasingly, it is more progressive to view IT services rendered in terms of total economic value derived. Some experts advise against strict usage-based charge-back schemes for distributed environments. Usage-based IP network traffic allocation is highly inaccurate, and the actual consumption measures (MIPS, bandwidth, megabytes, and so on) can be misleading. Usage-based statistics and any costs derived from them will not effectively guide consumer or supplier behavior. Furthermore, unpredictability can cause frustration and attempts to circumvent or exploit an internal scheme. A modified and simpler approach is to charge-back for transport frameworks and distributed systems. Similar to service providers that charge for access to WANs or outsourced client/server operations, three tiers may suffice to define a monthly unit charge approach. The three tiers of service are charged at fixed monthly charges on a per-seat, per-computer, or per log-on basis. For example: • A first tier is for Microsoft Office or equivalent functionality, LAN access, e-mail, and increasingly basic Internet and VPN access. • A second tier covers the primary band plus special applications such as data warehouses still accessible via a basic Microsoft platform. • A third tier could be special advanced workstation services such as engineering platforms or financial trading stations. 28 < Active Asset Management
  34. 34. Valuable signals and metrics for decision-making enable more meaningful comparisons for “make versus buy” choices. Similarly, informed decisions about initiating, terminating or renegotiating outsourcing arrangements are enabled using internal demand and supply indicators. Comparison and evaluation of alternatives cannot be effectively weighed without active reliable asset management lifecycle data that captures attributes and usage metrics about configurations, characteristics, contracts, and costs. 8. Availability The dynamics of availability, reliability, and speed imply that downtime or sluggish asset performance will undermine operating a solid infrastructure and building sustainable competitive advantages. The pursuit of “real-time enterprise” status is not possible with sluggish asset performance and sluggish asset reporting. In the absence of robust, fault-tolerant, and up-to- date systems, an organization’s engines are not firing on all cylinders. Many enterprises rely on their systems to transact business, interact with customers, and manage stakeholder relationships. The possibility for revenue or profit damage from potential hardware, software, or process failure is a risk organizations need to control. Risk management initiatives can include server failsafe procedures, storage backup and recovery systems, virus eradication, firewall precautions, self-healing, fault-tolerant architecture, and 24 x 7 global incident response capabilities. Compared to most physical assets, digital assets are deemed more costly to maintain uptime due to the efforts and skills required to design, test and support. The TCO components of software are labor intensive compared to hardware. The TCO to create, build, and maintain a process is especially challenging. The greater the quantity of less-skilled hands that touch mission-critical systems, the higher the probability that uptime, and consequently, cash flow are exposed. An effective approach to asset management, server provisioning, and client and mobile management will consider appropriate recovery systems to manage recovery and continuity capabilities. For example, federal regulators require some industries to back up three years of Instant Messenger archives. Not all important data resides on servers. A well- architected fault-tolerance and disaster recovery plan incorporates backup solutions capable of restoring every computer, including remote systems. Suppose a consumer goods organization implements CRM, ERP, SCM, and HR systems. Millions are invested. But after significant effort in tailored application development, the organization is slow to roll-out application upgrades, bug fixes, security patches, configuration conflict corrections, or new operating systems. Failure to embed sufficient fault tolerance and Active Asset Management > 29
  35. 35. response capabilities will seriously impair the enterprise’s ability to operate with consistency and execute with excellence. Security Earlier in this document, the management of intellectual assets, data, licenses, contracts, compliance, infrastructure, and software piracy were discussed. It is impossible to systematically manage these assets without a mature asset management capability in place. Maintaining a firewall with anti-virus, anti-spam and anti-piracy measures is best accomplished when software distribution, application metering, inventory, and recovery are integrated into the organization’s overall asset management capabilities. Effective asset management controls also help minimize loss caused by outright theft, fraud, or disaster. To obtain proper claim settlement from insurance companies, the following data is often required. Proof of: • Asset characteristics • Location • Condition and applicable depreciation The PricewaterhouseCoopers recent 2003 survey on global economic crime reported that asset misappropriation was the most widely-reported crime and the easiest to detect. Thirty-seven percent of 3,600 corporate respondents reported significant economic crimes within the previous two years. The average loss per company in total was $2.2 million. Approximately 75 percent of those impacted were able to recover only 20 percent of the value lost. Technology assets are especially noteworthy due to the potential combined impact of physical and intellectual property loss and resultant cybercrime vulnerability. Indeed, the potential impact of asset misappropriation and economic crime goes beyond financial metrics to also negatively affect: • Corporate reputation • Employee morale • Business relationships • Brand image • Share price 30 < Active Asset Management
  36. 36. CONCLUSION Asset management is more than just managing chairs, cell phones, routers or mainframes. And, we have observed that digital assets represent more than software licenses. Physical and digital assets are strategic properties that represent powerful strengths, opportunities, and vulnerabilities. With the proper people, processes, policies, and technology in place, an organization can correctly handle events in real time and execute action immediately. For example, when a Blackberry device is stolen, or when a SQL Slammer worm hits. Physical and digital asset management complements server provisioning and client management systems. Collectively, these three areas will contribute to your organization’s requirements for maturity, flexibility, reliability and effectiveness. It is impossible to leverage investments in information technology without the means to locate, update, and measure asset effectiveness. A robust inventory management capability is the epicenter of a best practices asset management enterprise. Altiris provides all elements of effective active asset management: • Inventory management • Asset lifecycle control • Settings and configuration management • Service and support • Client, mobile and server provisioning • Packaging and distribution • Recovery and continuity Active Asset Management > 31
  37. 37. By actively automating these system controls, you will maximize organizational performance and achieve efficiency improvements that include: • Gaining volume procurement savings • Improving service request tracking and resolution • Reducing contract penalties or compliance penalties for lost or modified assets • Reclaiming upgraded asset components upon lease return at contract termination • Avoiding overpayment of fees on obsolete assets for extended term durations • Avoiding maintenance or service fees on retired or non-used physical or digital assets • Inadvertent out-of-pocket payments of fixes or defects for assets still under warranty • Retiring obsolete assets that attract shipping, storage, tax, and other support costs 32 < Active Asset Management
  38. 38. ACRONYMS AND Active—Real time, bi-directional, aware, deployable per policies, DEFINITIONS notifications, collections Asset—Physical or digital property exhibiting value and a productive economic life BSA—Business Software Alliance ERP—Enterprise Resource Planning system FASB—Financial Accounting Standards Board FTE—Full-time equivalent worker GAAP—Generally accepted accounting principles IMAC—Install, move, add, change ITAM—Information Technology Asset Management ITIL—Information Technology Infrastructure Library MAC—Media access control address MAC—Move, add, change PXE—Pre-boot execution environment RFID—Radio frequency identification ROI—Return on investment SEC—Securities and Exchange Commission SIIA—Software and Information Industry Association SLA—Service level agreement SPOC—Single point of contact TCO—Total cost of ownership Active Asset Management > 33
  39. 39. REFERENCES 1. “Establishing an ITAM Performance Measurement Program,” July 10, 2001, Jack Heine, Gartner. 2. “Save $7 Million Annually: Kick Start Your ITAM Program,” Sept. 17, 2001, Jack Heine, Gartner. 3. “Software Vendor Audits: Have You Got Time for the Pain?” June 13, 2003, Jane Disbrow, Gartner. 4. “Asset Management Lowers TCO,” March 1999, IDC. 5. ITIL (Information Technology Infrastructure Library), United Kingdom, 6. Software and Information Industry Association, Washington, D.C., 7. Business Software Alliance, Washington, D.C., 8. “Chargeback If You Must, But Keep It Simple,” Oct. 10, 2000, Will Capelli, Giga. 9. “Global Economic Crime Survey 2003,” PricewaterhouseCoopers. 34 < Active Asset Management
  41. 41. 36 < Active Asset Management