A New Approach to Asset Management

By Dennis Drogseth

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Traditional asset management has been a fairly niche discipline, typically limited by domain, with network and systems assets often managed separately. But EMA is documenting new trends in asset management that will make it more strategically valuable to senior executives. Rather than viewing asset management as merely managing the acquisition of isolated components, this “next generation asset management” (NGAM) begins with the service as product, and provides a dynamic system to manage it from a lifecycle and business planning perspective.

Two of the key drivers for NGAM are accountability and business alignment. IT organizations are becoming a more visible business investment, and with higher visibility comes the ongoing responsibility to document and socialize the values IT services are delivering to business objectives. NGAM can provide a means to demonstrate the quality, performance, costs and values associated with IT services, and therefore offers a way to change perceptions of enterprise IT away from “cost center” and toward its rightful place as an internal provider of business-critical services.

NGAM intersects with a whole host of management disciplines, working in conjunction with service accounting and telecommunications resource management and integrating with other disciplines from change, configuration and release management, to incident and problem management, to capacity planning and security, among others. For example, NGAM integrates change, configuration and release management with provisioning new assets and retiring end-of-life assets without disrupting IT services. While IT service planning can leverage financial and inventory insights into assets relevant to provisioning new services or extending existing ones.

Doing all of this goes far beyond traditional asset management tools and will require new organizational, process and even political models for it to fully come of age. Taking a holistic view of asset management not as an island but rather as the heartbeat within the larger IT organism means that factors such as support for Configuration Management Database (CMDB) systems and integration with capacity, change, service management, and service accounting or chargeback must rise in priority. And in fact, EMA’s consulting organization is working to support many CMDB deployments targeted at some form of asset management, quite often as a chief first-phase goal.

For many IT executives, this may require rethinking existing asset management strategies. At the outset it may simply lead to merging accurate inventory with other asset management tools and processes, but over the long haul it will necessitate linking assets to value—and the value IT provides is in the delivery of services. As it evolves, NGAM can help organizations answer key questions surrounding its actual contributions to the business from a cost and value perspective. What are its most important services? Who’s using them—and for what purposes are they using them? What do they cost to develop, provision and sustain, and what is their associated TCO?

Armed with this knowledge, an organization can establish a foundation for IT planning, including making new investments (or not) based on complete knowledge of the asset base and on accurate insights into current business needs. By getting their own houses in order and understanding their true needs and usage patterns, IT managers can negotiate contracts and leases from a position of strength.


Continued: Defining NGAM

EMA specifically defines NGAM according to the following business-focused features, functions and processes.

Life Cycle Asset Management
• Procurement
• Receiving
• Stock management
• Hardware and software development
• Performance
• Maintenance schedules
• Retirement/disposal

• Software licenses/leases/maintenance
• Entitlements and compliance
• Service Level Agreements
• Outsourced services for -
[a] systems maintenance and management
[b] network maintenance and management
[c] telecommunications resources
• Other/miscellaneous contract costs

• Deployment
• Maintenance
• Other/administrative

Chargeback and Demand Profiling
• Service chargeback costs
• Demand profiling (how and implicitly why are IT services being consumed?)
• Asset utilization

Another way of understanding NGAM is to look at it in terms of IT maturity. EMA’s four-step model for IT maturity matches to NGAM in the following manner:

Reactive Infrastructure: In this stage, basic asset management needs to be put in place before NGAM can take flight. IT adopters should look for effective inventory and discovery capabilities to get their arms around what assets are “out there,” where they are, and who owns them in terms of maintenance and contractual requirements. Basic desktop software license auditing tools are also important in this stage. As IT evolves towards the next stage, discovery should become more dynamic and complete (across the data center and the networked infrastructure).

Active Operational: At this stage, IT planners should follow through with more dynamic discovery and begin actively sharing information between help desk and operational investments and their asset management capabilities. This should lead towards a basic CMDB-like system as IT organizations evolve through this phase. Some level of service definition and service mapping should take place so that assets, customers, operational owners and the services that unite these groups should be viewed more holistically (as in more advanced service catalogs or service portfolio management).

Proactive Service-Driven: Here, the CMDB system with a service catalog becomes a critical foundation, uniting assets and the services associated with them for a wide variety of disciplines across both the service desk and operations. Also fundamental in this stage are effective capabilities for demand profiling and service accounting. It is at this stage that the parent-child relationship between services and the assets supporting them kicks in, in all its dimensions. Similarly, the IT organization offers a single “service” interface to its internal and external customers, rather than a siloed situation where SLAs are negotiated separately by separate customer groups. In parallel, SLA negations for telecommunications resources, application hosting, and other types of outsourced support are negotiated and modeled to an integrated set of operational and business objectives.

Dynamic Business Driven: This is still largely a visionary stage. Very few IT organizations are here yet, and no vendor offering management tools has all or even most of the technologies fully in place to take them there even if they were ready politically and otherwise. In this stage, IT becomes a more integrated part of business planning, informing on business process requirements from a business as well as IT perspective, and linking IT service plans proactively to business and revenue growth. NGAM is needless to say the “rocket” that can empower this transformation.

It is our view that next generation asset management will be one of the “rockets” to watch not only in 2007 and 2008 but over the next five years. Its growth will be directly linked to CMDB deployments and ITIL v3’s vision of “service portfolio management,” along with innovative autodiscovery and inventory capabilities, application dependency mapping and other technology areas. While many competitors in this arena will be larger players, smaller vendors will continue to find fruitful opportunities for both enterprise-side innovation for innovation targeted at the market needs of mid-tier and smaller businesses requiring some level of automation and integrated financial insights.