Best Practice for Asset Management
According to Forbes Advisor, the management of critical assets, amounting to $104.4 trillion, was headed by the top 500 largest asset managers in 2019. This included the asset management of big IT giants that had only recently displaced the burden of their complicated portfolios onto experienced individuals.
Asset management in its widest sense refers to financial professionals taking charge of your company’s assets. This can consist of money or anything else with an inherent monetary value. In the case of IT asset management the team is primarily responsible for the hardware and software deployed in the organization as well as planning and overseeing the equipment life cycle.
One of the most significant responsibilities is ensuring that all software used within the business is fully licensed and accounted for—failure to maintain adequate records can result in multi-million dollar fines and penalties. Controlling licenses might sound simple, but in businesses with hundreds or thousands of employees, spread over many sites and countries, it can be a nightmare. Not only are programs swapped between individuals and departments, but it is not unusual for employees to bring in their own copies of (sometimes pirated) software and load them onto company hardware.
What is Asset Management?
Definition (source: Gartner): IT asset management (ITAM) provides an accurate account of technology asset lifecycle costs and risks to maximize the business value of technology strategy, architecture, funding, contractual and sourcing decisions.
ITAM is usually handled internally but, increasingly, the responsibility is being outsourced to professional teams. An effective team will employ cost-effective ways to safeguard your assets by keeping track of them and organizing them to reduce asset wastage.
According to Mordor Intelligence, the external ITAM market is forecast to double in growth from 2021 to 2026. According to the same report, the ITAM process is now being applied to the IT sector worldwide, especially in Asia, which is home to an expanding IT sector. ITAM tools are more in demand than ever before.
Why ITAM Works for Businesses
IT asset management (ITAM) involves a cost-effective asset management system that evolves based on your IT business.
Every business is unique, and the way a business operates affects asset usage. Improper asset usage can lead to a decline in business growth. This is because wastage of resources, overconsumption, or stagnancy means you aren’t utilizing your assets according to their worth. Asset management can help you fix that.
Best Practice for Asset Management
Here are some asset management best practices according to market research;
1. Play it Safe
Don’t wait until the year-end to research how assets are tracked: stay ahead of the game and monitor on a regular basis. Make an inventory of your IT assets and analyze how and where they are being used each quarter.
Ensure that you match the asset usage to the wider goals of your organization. On a more internal level, compare where IT assets are used most to where they should be utilized more. Now, using that information, plan a gradual change towards optimal usage.
2. Avoid Being Ghosted
Your IT organization may keep your asset count through standard accounting software or by utilizing specialist asset management software. Problems, when they arise are often not directly related to the hardware and software in use, but to simple bookkeeping and tracking of assets.
Sometimes assets in the books have gone missing or stolen—these are called ghost assets. Also, the reverse may be true, whereby you have some assets that have simply not been recorded and are thus not accounted for. Proper accountability is essential to effective asset management.
3. The Lifecycle-Based Approach
Managing assets based on their life cycle can optimize their usage and cost-effectiveness. An asset’s life cycle consists of five stages: planning, acquisition, use, maintenance, and disposal. Tracking the asset’s progression through its lifecycle, and optimizing its usage based on each stage, can extend its usefulness and delay it’s eventual end-of-life.
For example, assets will benefit from preventive maintenance practices that can prolong its life and allow for better usage. In the acquisition stage, if a premium is paid to purchase high quality assets, the equipment is likely to be more reliable and to last longer. Although it is potentially more expensive to purchase better quality, it can reduce costs over the whole life cycle.
Here are some important factors to consider when implementing the recommended best practice for asset management;
- For medium and large companies it is worthwhile to automate asset discovery, as that can allow you to check your inventory more efficiently and more often. Automated systems also make it easier to account for stolen or tampered assets.
- Asset detection is also key to detecting hardware and software assets which may not be properly licensed. Specialist software can identify potential problem areas and monitor the number of licenses in use against the fees paid.
- Dispose of your assets responsibly and avoid wastage. Timeliness is also important—obsolete assets can slow down overall performance. On the other hand, disposing of assets too early means that the optimum return on investment is not achieved. It is important to maintain a balance.
Asset management is everyone’s responsibility. Make sure employees understand the need to care for equipment and to give early warning of any issues that might arise. An effective ITAM team can ensure that the business’s IT investment is protected and its return is maximized. IT asset management, properly focused, is an important component of business growth.
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