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2 goals for optimizing asset management

MylesS on ‎01-14-2013 11:54 AM

In recent posts, I have discussed several aspects of IT Service Management. This post looks at another element, Asset Management. If you’re not familiar with this topic, the asset management process is about managing IT assets through their life cycle to make sure that their use delivers value at an optimal cost. To do this, assets need to be accounted for, physically protected, and made reliable and available.


The asset process needs to consider software as well. For software assets, the process is about ensuring that the optimal number of licenses are acquired, retained, and deployed in relation to business usage requirements and that installations are in compliance with license agreements. Software asset management, therefore, is a balancing act between perceiving customer needs and not over purchasing unneeded assets. Simply, put the goal for this process is to account for all IT assets and optimize the value provided by them.


Goals for asset management

To improve this process and reduce IT and business risk, COBIT 5 suggests IT organizations measure themselves against two process improvement goals. Let’s explore each along with their recommended metrics to get a better idea of what good asset management should be all about. 


1.                  Licenses are compliant and aligned with business need. Software licensing management and compliance is a balancing act. One metric is used to measure success against this goal: percent of used licenses against paid-for licenses. What a great and simple metric. This in my mind puts it all together. Now obviously, you need to drill into specific application licensing and compliance results, but this metric reflects the quality of balance and allows for improvement to be shown over time.

2.                  Assets are maintained at an optimal level. Optimization usually considers more than just one variable. For this goal, three metrics are recommended: number of assets utilized, benchmark costs, and number of obsolete assets. I think these three do a good job of capturing the spirit of managing assets to an optimal level. When you do a poor job of utilizing assets, it creates financial management issues: you spend too much for what you have and you run the risk of having a bunch of obsolete assets. I care about obsolete hardware assets as well, because they tend to cost more as they get to the end of what has been called the “bathtub curve” of useful life. IT assets that are older than 3 or 4 years typically cost more to maintain and use. Finally, it is worth noting that with the move to cloud, you really need to be able to look at your IT asset cost as well as your total IT service cost.


So where should you start?

As always, my suggestion is that you start where the most immediate value can be driven. But if it were up to just me, I would start with the percentage of used licenses versus paid-for licenses. We need to make overuse a rare event, with software license audits resulting in steep penalties for unpaid-for licenses. What do you think? What would be first on your list? I would love to hear back from you.


Related links:

Blog post: Making COBIT 5 part of your IT strategy

Solution page:  IT Performance Management

Solution page: IT Asset Management

Solution Management: Software License Compliance

Twitter: @MylesSuer

About the Author


Mr. Suer is a senior manager for IT Performance Management. Prior to this role, Mr. Suer headed IT Performance Management Analytics Product Management including IT Financial Management and Executive Scorecard.

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