How important Is IT Asset Management for an Organization?
Efficient IT asset management is a necessity in today’s competitive market. Without a management strategy, you can’t be sure if your company is operating at its full capacity. Plus, as your business expands, so do your IT needs. Your IT asset management plans can help in tracking the increasing number of assets in your organization, from procurement to their disposal.
This blog highlights the importance of IT asset management for an organization, the best tips to draft your strategies, and the KPIs to monitor your success.
What is IT Asset Management?
For some, IT asset management is about maximizing the value of an organization’s IT equipment, while others may claim its inventorying all the assets on your network.
The former isn’t wrong, but it doesn’t explain why IT asset management is essential. The latter, however, is just a partial description.
The correct way to define IT asset management or ITAM would be to say it is a sophisticated program with diverse functions. From tracking available assets on the network to verifying if each one is up-to-date, and taking note that each asset is adequately protected and configured, ITAM includes it all.
IT assets can be divided into the following two types.
- Hardware – Your physical computing gear, including desktops, laptops, keyboards, printers, and related equipment.
- Software – It includes all computer programs licensed or bought by the company.
Applying ITAM practices to these assets helps in managing your inventory, as well as your contractual and financial data. It provides you with an overview of your total assets, your business value, IT asset usage, and expenses. The constant monitoring will also help you track asset devaluation, allowing you to maintain your procurement cycle.
That said, it is a continuous cycle, requiring constant vigilance on your part and your IT department. The process can be strenuous, which is why companies fall short on their IT asset management.
But the importance of IT asset management cannot be overlooked. Let’s see why!
Why is IT Asset Management Important?
IT asset management is essential for an organization for several reasons. Not only can it help you keep IT management and procurement costs low, but also ensure your company is using the latest tech to provide your clients with the best services possible.
Here are the significant reasons that justify the importance of IT asset management.
Improperly Managed Assets Lead to Cybersecurity Vulnerabilities
With technology advancing at an immeasurable rate, threats to cybersecurity are also rising at an alarming pace. If you are using outdated assets, then gaining entry into your company’s secured files would be a breeze for the hackers.
The inability to manage IT assets means you don’t know the vulnerabilities you possess. It will leave you open to attack from competitors looking for an advantage or other third parties with malicious intent.
The best security measure against cyberattacks is to ensure your IT hardware and software is up-to-date with the latest firewall and other cybersecurity measures. It starts with IT asset management!
Regular monitoring of IT assets would keep you informed of the lifecycle of your hardware and software so that you can update them as needed.
Outdated Assets Can Negatively Impact Workflows
Another drawback of using outdated assets is a slow workflow and low productivity. Technology is becoming increasingly vital in our everyday lives, particularly in the corporate sector. Almost all our work depends on the quality and speed of our tech gear.
So, outdated software and IT hardware will create a hindrance in the workflow. It will negatively influence the productivity of your employees, slowing their progress and leading to missed deadlines.
Proper IT asset management would allow you to track asset lifecycles and know which equipment needs an upgrade or replacing before they are completely worn. It will help in optimizing your company operations, including planning, resource use, and implementing the management program.
You will also have a full understanding of your assets’ potential and how to exploit it to the fullest.
Lack of Knowledge of Your Points of Failure
As mentioned before, without a suitable IT asset management system, you’ll be unaware of the weak links in your network. You won’t know which hardware or software is close to expiry and in need of an upgrade. Plus, you will need to put operations on hold until you find and fix the failing IT asset.
In such cases, redundancy plays a crucial role. It creates a dependable and stable network where your employees, customers, or clients will be able to find what they need from your IT assets.
Without a layout of your network infrastructure, you won’t know the points of failure, where they are, and how to fix them. An efficient IT asset management strategy will help you set up redundancies in the system so that you are ready for unforeseen outcomes and ensure the business continues as planned.
Essential for Regulatory Compliance
IT asset management also plays a role in helping you ensure your company meets regulatory compliance guidelines. Whether it is a small startup or large-scale enterprise, it is impossible to guarantee that your network meets all regulations. But a proper asset management system can help you keep track without manual analysis.
For example, consider GDPR or EU’s General Data Protection Regulation that states all client or customer data has the ‘right to be forgotten.’ If you don’t have a map of your network infrastructure, including where you have all the data stored, how can you guarantee that you have removed all details about a person?
It is impractical to expect that you meet such regulations without a comprehensive asset management system. There may be a backup you missed or another asset with the data that wasn’t supposed to be there.
You may skip these details without an IT audit, which would lead to a violation of the compliance regulations and cost you a hefty fine.
Track Incoming Assets
Replacing outdated hardware and software with updated versions is the usual course of action for businesses. Sometimes the process happens more frequently than you might assume.
Without a proper IT asset management system, it would be a challenge to track these incoming and outgoing assets, which will create inaccuracies in your network map. You won’t know which hardware is new or which ones you removed, leading to a waste of time and effort in trying to find the missing pieces. It will also create a gap in your cybersecurity measures.
An IT asset management system will help in maintaining a record of all changes in your network infrastructure map. So, not only will you know which hardware needs replacement or updating, but also which components you removed.
Properly Dispose Off Outgoing Assets
Last but not least, IT asset management is crucial for adequately disposing of outgoing assets. We discussed that a proper system could track all the incoming and outgoing hardware. Additionally, it will help you remember which asset stored what data.
Adequate disposal of outdated IT assets is also a regulatory standard; for example, the payment card industry, data security standard (PCI DSS). So, if some outdated hardware had sensitive client information, then you can erase all traces of that data before removing that IT asset from your network.
An IT asset management system can document the disposal of outgoing equipment in a way that guarantees the data is unrecoverable.
Benefits of IT Asset Management & ITAM Software
No matter the size of an organization, a proper IT asset management system can help get the most out of your hardware. Plus, the top ITAM software can make it convenient for IT asset managers to boost their productivity.
Here are some benefits of implementing an IT asset management strategy and ITAM software for your organization.
Improving Acquisition & Use
With an IT asset management system in place, you can improve your method of acquiring new assets for your company, as well as learn to use them to their full potential. It can also help in understanding what equipment you need and what are extra expenses, which will help in budgeting the company’s finances.
Additionally, over-maintenance or under-maintenance are significant problems that can lead to a halt in everyday company operations. While over-maintenance can charge you extra, under-maintenance can reduce productivity. Knowing how to get the most out of your IT assets, you can reduce maintenance costs, which cut into your company’s profits.
Greater Asset Visibility
According to a study by Gartner Inc., 30% of companies are unaware of their assets, their location, and who is using them. Another research mentioned that for 70% of companies, its planned inventory is different from its actual collection of assets.
An ITAM software can automate identifying, tracking, and classifying all IT assets within an organization, which ensures you have a clear understanding of what and how much you own. It is an essential knowledge to have for availing the maximum value of current assets and making future procurement plans.
Additionally, the increased visibility of available assets within your organization will help in refining your infrastructure performance and efficiency. IT managers will be able to resolve IT-related issues swiftly, improving the quality of their services and reducing costs.
Low Procurement Costs
In addition to lowered maintenance costs, you can also reduce procurement expenses with a straightforward IT asset management plan. You will know the total value of your current assets as well as the total number of assets in the company, which will help you plan for future expenses.
Contrarily, if you don’t have an asset management system, you might procure too much or too little, both of which are costly.
If you over-procure, then you may have to pay for the storage of unused items. On the other, under-procurement will mean buying the equipment at the last minute and facing price hikes.
An automated ITAM solution consolidates all tech-related sourcing, acquisition, and purchasing activities of an organization. It enables IT asset managers to execute their management strategies more uniformly.
Additionally, an IT asset management plan not only provides an accurate account of existing, incoming, and outgoing hardware but also details of their lifecycle. So, it can help you extract maximum value from existing assets, curate a financial plan for future procurements, and eliminate extra expenses.
There are numerous industry regulations that an organization must comply with to remain operational. Government agencies, startups, and enterprises, as well as non-profit organizations, need to submit a comprehensive analysis of their acquisition, utilization, and disposal strategies for IT assets.
With a centralized system recording all such details, compiling the data in a report is a breeze. That’s where ITAM software does its part! It automatically stores all tech-related information, including current assets, procurement plans, and more.
So, not only can you ensure you meet all regulatory compliance guidelines, but also write a report without hassle.
Asset theft is expected, regardless of whether you are a small-scale organization or an enterprise. According to an old survey by the International Foundation for Protection Officers, companies incurred a cost of over $50 billion per annum, due to employee thefts.
Furthermore, as the company expands, the incurred amount rises. Meaning, failure to keep track of your IT assets will lead to loss of profits during the procurement of hardware and a loss of billions with employee thefts.
A sufficient and effective IT asset management strategy will help you track down missing equipment that a user didn’t report or return. Plus, ITAM software provides automated check-ins and checkouts, asset reservations, employee assignments, and more.
It will keep you informed about which asset is allocated to whom, ensuring accountability across the organization. You will also be able to monitor if employees gain unauthorized access to any hardware, document details of custodianship, and pinpoint areas of frequent violations.
Technology Lifecycle Management
All IT equipment, be it hardware or software, has a lifespan that begins from the manufacturing date. The end of its lifecycle depends on its usage, individual components, and more. All IT assets in an organization need to be disposed of and replaced at a specific date.
Tracking and equipment’s lifecycle, depreciation rate, and more is a taxing and time-consuming job. But an IT asset management strategy can make life easier for IT asset managers.
ITAM software is an automated, long-term solution for technology lifecycle management. It helps in tracking the hardware lifecycle from its procurement, deployment, usage, and its depreciation rate.
You can look up details of the current state of your IT assets, track the next updates, schedule procurement, and maintenance, and ensure all security requirements are up-to-date. Plus, without worrying about over or under-maintenance, you can also keep maintenance costs to a minimum.
Furthermore, not only can you monitor warranties on hardware, but also software license compliance. It will ensure you meet regulatory guidelines by tracking how long a software has been running and whether it needs an update.
Tips for IT Asset Management
To gain the most out of your IT assets, you need to devise a proper strategy. Here are a few tactics to help you develop your strategic plan.
Maintain Asset Inventory
Initially, you need to know what you own and how much. Don’t estimate or guess your total assets but count the exact number for accuracy and effectiveness of your IT asset management plan.
When taking inventory, focus on the following questions:
- What is the total count of assets under your ownership?
- Where are the assets? Think of the location as well as to whom they are assigned.
- What is the value of each asset?
- When did you acquire each asset?
- What is their expected lifecycle?
You can also write down details like their usage to determine the depreciation rate and the frequency with which you might need upgrades.
Analyze Total Lifecycle Costs
Most business owners make the mistake of including the initial expenses, which can disrupt your financial management and IT asset management.
But, with IT assets, there are maintenance costs that depend on the type of maintenance it needs. Condition and performance modeling, as well as disposal charges, are also part of an asset’s lifecycle.
You need to include the total lifecycle costs of your assets in your IT asset management plan, instead of the initial purchasing price.
Determine Levels of Asset Usage
When taking inventory of your IT assets, it’s best to highlight their degree of usage. Meaning, note the capacity, quality, and the different roles that the IT hardware and software can serve.
With a clear picture of the purpose of the asset, it’ll be easier to plan its operating and maintenance activities, as well as upgrades needed for it to work optimally.
Craft a Long-Term Financial Plan
Your IT asset management co-relates to your financial management strategies. Knowing the purpose of each asset, its importance, lifecycle, maintenance, and more, can help you manage your company’s finances. You’ll know which hardware is a priority and which are feasible. Thus, you can allocate resources accordingly.
How to Improve Asset Management?
If you have an IT asset management plan in place, then here are some ways you can improve your strategies for maximum benefits.
- Understand the purpose of your assets.
- Assess your assets’ current condition.
- Make sure you are using all assets to their full potential.
- Ensure your assets are robust enough to survive the changing market.
- Analyze your maintenance plans for their effectiveness and efficiency.
- Estimate the depreciation rate, if it changes, and the impact of those changes.
- Predict the time of asset disposal and if it will have an impact on your financial statement.
Track KPIs to Measure the Success of Your IT Asset Management Strategy
It’s not enough to create and execute an asset management strategy. You also need to ensure it’s working effectively. That said, here are a few key performance indicators that will help you determine the success of your planning:
- The percentage of IT assets in your database.
- The average age of IT hardware you have
- Percentage of assets with valid licenses and maintenance contracts
- Percentage of software included in existing ITAM reports.
- Percentage of assets that your ITAM detects.
In a nutshell, IT asset management is essential for an organization to have a complete understanding of all assets in its possession. It can help you leverage your IT hardware to their full potential and ensure your company is on the right path to success.
Have you tried the IT asset management software such as Asset Panda, Freshservice, ERPNext, Spiceworks or Remedy Asset Management? If so, don’t forget to post a review! And, also check this list of best free and open-source digital asset management software.
Now that you understand the importance of IT asset management, apply the tips to plan your ITAM strategy and use the KPIs to make sure it’s on the right path.
Haziqa Ishtiaq is a Digital Content Producer at Cubix, a software development agency headquartered in Florida, U.S.A. She has a passion for writing and has expertise on Blockchain, AI, marketing strategies, and more.
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