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Asset Management – Why You’re Foolish Not To Do It

Sounds harsh, right? It’s supposed to be. IT Asset Management is one project that pays for itself — every time a client starts an Asset Management program we’ve shown solid ROI. That’s right – in a business environment that’s taught us to only take on projects with positive ROI, Asset Management brings hard-dollar savings and clear returns.

If Asset Management is such a winner, why haven’t more companies done it yet? Because it’s hard. Not hard in the sense of an intellectual challenge – it’s almost always a no-brainer based on the facts and ROI — but in the sense that it’s a lot of work. Asset Management involves a lot of time and effort to investigate every physical space in your company looking for assets so you can actually manage them.

Want an example? Here’s a story we heard a while back: an executive from a veryAsset Management large defense firm was tasked with cutting several hundred thousand dollars from his business unit’s cost base. At first glance, he thought he’d have to do a round of layoffs. But with the help of his sourcing team and IT experts, he realized that the company could avoid personnel cuts AND reduce recurring IT costs by focusing on an Asset Management initiative. He charged everyone on his team to go through every supply closet, desk drawer and filing cabinet looking for hardware, peripherals, and any other IT assets they could find.

They then catalogued those assets and mapped them against what they thought they owned, and what their contracts said they owned. They indeed saved the money they needed with no layoffs. How? The Asset Management initiative:

  • Found maintenance contracts on desktops, laptops, and printers that the company wasn’t using anymore or were completely depreciated. Cancelling unneeded maintenance contracts was a simple process after that.
  • Allowed the company to cancel lease contracts for devices the team found. Really— the company had been paying leases on machines the business unit wasn’t using anymore simply because they hadn’t found the machines to return them! So when that hardware was found, they returned the devices to the leasing company, saving the company money again with no pain in the organization.
  • Gave an accurate picture of software license usage against purchases, allowing the company to “true-up” with many software suppliers and take out unused licenses in the next round of negotiations. The company was also able to implement a process to reclaim licenses upon hardware asset disposal, significantly reducing the need to purchase new when software installs were requested.
  • Recovered many idle hardware assets that were in good working condition. The company gathered the extra items in stockrooms and implemented a sourcing process to ensure that a stock check occurred prior to ordering new equipment.
  • Allowed more effective negotiations in new deals as the company had a clearer picture of what their true usage was, getting better price points for consolidated spend instead of multiple, smaller deals that happened because they didn’t know what they already had in house.

Okay, so we know Asset Management is important and can save you money without unnecessary pain to your business. But it cannot be a one-time exercise. That’s where an ongoing management workflow and system comes in. Applying technology and service management to your now-accurate catalogue of assets allows your company to gain cost efficiency and effective utilization on a continuous basis instead of as a one-time benefit. Avoiding the costs that come from poor Asset Management will give your company less friction and better transparency into its capability to deliver against customer and stakeholder needs. Furthermore, continuous Asset Management is a necessary cornerstone for implementing chargeback models and reaching the utopia of IT as a profit center.

If you want to know more about how you can use ServiceNow to implement Asset Management in the most relevant ways possible for your business, send us a note:[email protected].