Nice article on Asset Man. Information Week Dec 8
Asset-management software can cut your total cost of
ownership. It can also boost your speed and sharpen
your customer focus.
By Caryn Gillooly
s your company still ignoring asset management? Then it's
probably time to start paying attention. Nearly half the
companies in an InformationWeek survey say they've cut
their total cost of ownership by using tools that track hardware and software in
their companies (see chart, below). "We're saving $100,000 a year, absolute
minimum," says Joe Hertsel, assistant manager of technical services at Honda
of America Manufacturing Inc. The unit uses Cenergy, a combination
asset-management, application-distribution, and license-management product
from Tally Systems Corp.
At Florida Power and Light, the numbers aren't in
yet on the asset-management tool that came with
Tivoli Systems' enterprise-management
software, but the goal is the same. "We're using
asset management as part of a bigger picture,"
explains VP and CIO Dennis Klinger. "We're
working toward reducing TCO and increasing
speed, flexibility, our customer focus, and
quality."
Traditionally, asset management has meant just
tracking hardware and software. Today, though,
it's not only becoming part of strategies to reduce
TCO. Some companies also are taking the next step-using asset management
to track the physical and financial life cycles of all IT assets. This is a new sort of
IT investment management where even people are counted as assets,
according to Alison Palmer, an analyst at the Hurwitz Group, a Boston
consulting firm. For example, if an IT staffer travels from Boston to Seattle,
there's a cost that needs to be tracked. "Only a few products will do this-try to
capture all IT cost information," Palmer adds.
NetBalance Inc. in Gaithersburg, Md., began shipping just such a tool last week.
Called IT Ledger, it starts at $40,000 for a three-user license capable of
monitoring as many as 1,000 desktops. "This type of product seems to meet
more of a business need-it appeals to CIOs and CFOs," Palmer of Hurwitz
says. "While other products are fulfilling a need, if customers really want to
control their TCO they need to take this extra step" of managing the entire life
cycle of all IT assets.
A Big Six accounting firm, which requested anonymity, is doing exactly this type
of asset tracking in one of its divisions with MainControl Inc.'s ValueWise tool.
"Our tracking starts at the requisition level," says the division's manager of
asset management. "We use this in conjunction with [Microsoft's] System
Management Server for inventory, we use a financial feature for managing our
budgets, we use it to manage our leased computers-it does our whole flow of
business."
The accounting firm evaluated some 30
asset-management products and chose the
MainControl product because it had
automated purchasing capabilities, the
manager says. "It makes no sense for the
purchasing team to buy something then hand
that information over to the
asset-management team," the manager says.
"I wanted the whole gamut-something that
could take us from start to finish, from
requisition to disposal."
Asset management is also letting the firm
centralize IT buying, the manager says. "If Bob buys a hard drive, and the rest of
my employees do the same-boom, I've lost that savings of bulk buying power,"
the manager says. Keeping technology up to date is equally important, the
manager adds. "Maybe some businesses can run on a 386 until it smokes, but
we can't."
The accounting firm's implementation did not come cheap. The manager
estimates that the MainControl product plus the time spent on installing it cost
more than $100,000. The division also has a staff of five devoted to managing
$9.5 million of PC assets. "We'd be losing money hand over fist if we didn't use
some kind of asset management," the manager says.
While almost half of the respondents in the InformationWeek survey say
asset-management software cut their TCO, more than one-quarter say tracking
assets increased their TCO. In many cases, analysts speculate, users may not
be implementing asset management efficiently. "It's very labor-intensive and not
a one-shot deal," says Tom Rhinelander, an analyst at Forrester Research in
Cambridge, Mass. Users need to make a significant investment of time and
money to get real value. Norbert Kriebel, an analyst with Giga Information
Group, also in Cambridge, agrees: "Asset management will not create value
unless you make it a business practice. It's as much a philosophy as a
technology."
Besides a trend toward cutting TCO,
asset-management tools have a relatively quick
return on investment for most companies. Nearly
60% of companies in the InformationWeek poll
have either already gotten their return on
investment or expect to do so within a year (see
chart, right).
"Some enterprises can get a complete ROI in
one project," says Giga's Kriebel. Year 2000
projects are a case in point, he says. Many
companies are finding they must upgrade from
Windows 3.1 to support the new century.
Administrators are using asset-management tools, not only to find the Windows
3.1 machines, but also to automatically find out if those machines have enough
memory to support an upgrade, Kriebel says. "You're going to have to do it
anyway," he adds.
Exponential Difference
Asset management is neither new nor a niche market. It started on the
mainframe as a way to track hardware and software. When users got PCs and
became more autonomous, companies didn't have as great a need to know
which versions of software were on each desktop. If individual departments, or
even users, wanted new software, they bought it themselves.
But today, business-critical client-server computing makes these tasks
exponentially more important. With the client and server working in concert,
what's on that desktop has become crucial information that needs to be tracked
on a regular basis. "Asset management is essential," says a recent report from
Gartner Group Inc., an IT consulting firm in Stamford, Conn.
Companies can start small with simple hardware- and software- inventory tools
that automatically find machines in the corporate network and identify software
on each machine. Microsoft's SMS, Intel's LANDesk Manager, and Tally
Systems' NetCensus are a few products that provide those capabilities.
Apsylog, Hewlett-Packard, Janus Software, and Tangram Enterprise Solutions
are among the vendors that provide asset-tracking products that track software
use, calls to the help desk, and other more advanced functions. Then there are
NetBalance, MainControl, Amdahl, and a handful of other companies that pro-
vide more comprehensive IT investment management. Their products track
hardware, software, licenses, maintenance, training, and support costs.
If you don't want to do it yourself, companies like Comdisco Inc. and Isogone
Corp. offer asset-management services. They will manage the assets for you or
provide consulting services to explain how best to implement
asset-management services yourself. Prices for these services vary widely
depending on the type of service, frequency, the size of the organization, and
other factors.
Even with all these choices, analysts say the vast majority of companies don't
use asset-management software. Many companies say it either costs too much
or is simply too big an undertaking. Lockheed Martin Corp., for example, does
not have a corporate standard for asset management. "We do it in pieces and
parts-but we have nothing across the board," says Frank Belland, a senior
systems architect at the Bethesda, Md., aerospace company. Some groups
within Lockheed periodically do a physical inventory of property; others
outsource all workstation and desktop maintenance, including asset
management. To get a relatively complete corporate picture, departments
simply compare notes.
Belland says it would cost too much to try and implement a corporatewide
asset-management standard. "I've got 175,000 systems out there, which means
I have at least one-if not more-of everything," he says. "I'd estimate that just the
startup cost of getting the software, hardware, and people in place for an
asset-management system would be upwards of $1 million."
No Perfect Solution
Other top reasons cited by respondents to
the InformationWeek survey for not
implementing asset management: They're
tracking assets manually and feel that's
enough; they lack staff resources; they don't
have a clear business justification; or the
software is unproven (see chart, left). "I've
looked at everything out there," says Belland
of Lockheed. "Any product you deploy will
only give you a best guess. There's no
foolproof method available today."
But companies with an asset-management program in place vehemently
disagree. In fact, most say they can't imagine running their corporate
infrastructure effectively without it; all agree they'd be losing money without it.
Honda of America's year-old implementation tracks the Marysville, Ohio,
company's hardware, software, and licenses across 3,300 PCs and 700
printers in three manufacturing plants. It also distributes software across that
environment. The initial reason for bringing the product in was to roll out a
series of enterprise applications, says technical services manager Hertsel. "We
knew we had old equipment out there that wouldn't be able to handle the new
software," he says. "Not finding those machines would have prevented us from
doing the rollout."
Also, the Honda unit was leasing its PCs on a three-year deal that ended last
April. "We needed to find those PCs to replace them," Hertsel says, otherwise
Honda would have to pay for them. Hertsel estimates the company saved as
much as $3,000 a month for leased PCs and other hardware and software he
wouldn't have been able to find. This savings plus an estimated $100,000
savings in employee costs, gave the company a one-year return on its original
$100,000 investment.
Like Honda, Reliance Insurance Co. in Philadelphia had a software-upgrade
problem. Before putting in asset management, the company had no way to
track hardware and software inventories in its 40 locations. As a result, the
company didn't know which machines could support a rollout it was planning.
"We didn't know what was on the client PCs," says Jack Cunningham, IS
consultant at Reliance. "By not knowing the client's hardware and software
configuration, we had to use a trial-and-error approach to deploy that software."
The company now runs Computer Associates' Unicenter TNG
enterprise-management software, which has an asset-management program.
With the software, not only does Reliance know what's out there, but the
software distribution piece that ties into the asset-management part of
Unicenter saves even more. "Installing software on PCs that have hardware
capacity and software compatibility makes sense and saves money,"
Cunningham says.
Reduced Downtime
Cost savings can also come in the form of less
downtime. According to Infonetics Research Inc.
in San Jose, Calif., the average company loses
almost four times as much on LAN downtime as
it spends on management products,
maintenance, outsourcing, and staff salaries.
With asset management, the more that's known
about an end-user's workstation the faster
problems can be solved.
"We lost money in downtime before we put this in
place," says Reliance Insurance's Cunningham,
referring to the asset-management piece of Unicenter TNG. Before using the
software, the company had no way to track remote PCs or to manage them.
"We expect to see great savings," Cunningham says. "In fact, the
asset-management piece [of Unicenter] should save us more money in the first
year or two than any other piece."
Software maker PeopleSoft Inc. cut downtime by tying Tangram's Asset Insight
into the corporate help desk. For starters Asset Insight tracks the hardware and
software of PeopleSoft's almost 5,000 workstations and audits the applications
to make sure licenses are up-to-date, according to Len Cook, a workstation
engineer at the Pleasanton, Calif., company. Asset Insight records any changes
in hardware or software at each workstation. "This is a great tool for our
computer support center," Cook says. "They can automatically see how a
machine has changed over time. So if the user calls with a problem, that
problem can be solved quickly and efficiently."
But most users of asset-management software packages say they get the
greatest possible savings when they use the products in the most traditional
way-tracking hardware and software to make sure they're not paying more than
they should in licenses or in stolen or lost equipment.
Ernst & Young, for example, has more than 25 people dedicated to nothing but
asset management of its internal networks. The consulting firm's
asset-management initiative is a combination of products-AssetPro from Asset
Software International, and Norton Administrator for Networks, which is now a
product of Hewlett-Packard. Inventory information is captured by the Norton
Administrator and checked against the information in AssetPro, which is then
tied into the company's software distribution system and help desk.
But the primary reason for the project was the need for a corporate inventory,
says Robert Wasserman, national enterprise software distribution manager at
Ernst & Young's office in Lyndhurst, N.J. "We have a leasing plan, and without
proactive asset management, I'm signing a check for $30 million without
knowing what's what," he says. "With our firm's growth-we have hires every
week-so much goes out that, if we don't track that, it's a big mess."
PeopleSoft's Cook has the same tracking problem. "We issue 200
workstations a week," he says. "Not knowing where they're going, that's a gash
close to the jugular."
What It Paid For?
Before putting in the Tangram system, PeopleSoft did a bar-code inventory of
hardware at an annual cost of as much as $70,000, Cook says. The company
moved to a software product to inventory applications, but even with
cross-checks between invoices and accounts payable, there was still no way to
be sure the company was getting what it paid for. "We just paid the bills and
said, 'This is what we think we're buying,'" Cook says.
Florida Power and Light plans to use the asset-management tool that comes
with its Tivoli Systems TME 10 enterprise-management software to track
hardware and software on 8,500 desktop machines and nearly 600 servers,
says Nancy Mulshine, manager of the Tivoli implementation. The Miami utility
relies on that information to increase the efficiency of basic operations.
The primary benefit of the software is the ability for better planning, which can
help cut costs. "When you design an application there's a cost involved in
development and deployment," CIO Klinger says. "That development and
deployment assumes a certain capacity on our machines. If there are
incompatibilities we're not aware of, that cost goes up." But, he adds, cost
savings come not from asset management alone, but from tying information into
the overall management system.
Nancy Brock, director of IT operations at Florida Power and Light agrees. "The
true implementation of asset management goes well beyond storing asset
information," she says. To be of real value, asset information must be
integrated into processes such as acquisitions and software distribution, she
says. Only then can a user get higher-quality delivery at lower cost. |
