ITAM is rarely seen as a strategic initiative at the moment, but those few forward-thinking companies that have tied in ITAM as a strategic initiative have started to reap the benefits. Creating and implementing an ITAM initiative is daunting as the likelihood of seeing the benefits over time will bear significant results, but after the initial first big success, the successes over the first year to 18 months after that are more modest, as the ITAM initiative needs constant care and feeding.
Unfortunately, ITAM is often one of the first items to be shut down when an organization hits a rough patch. In these cases, the organizations see ITAM as a nonessential activity, which is in fact not the case. Organizations often end up making decisions that are often shortsighted with a big impact on the long-term health of the company or even industry. Take Microsoft as an example and consider its long wait to get into mobility. That's only one example, but there are so many others to draw upon. It is not the first time IT has teetered on the brink of this particular dilemma, and on more than one occasion, the crows have come home to roost.
In the course Converting Strategy into Action offered by Stanford University, they emphasize the importance of understanding the culture and the structure of a company as a critical input in moving ideas from a vision to a practical solution and indicate that these same aspects have a direct bearing on the adoption and success rates of the endeavors of a company.
The value from asset management comes from the following two areas:
- Reduced cost or improved asset utilization
- Reduced risk
There are many other measures, components, and processes that make up asset management, but only value and risk will be seen and understood by the executives paying the bills for these services.
Unless your ITAM program can automatically calculate certain KPAs, processes, or SLAs, you can compare reports on several topics, such as asset reallocation, budget savings, reducing gaps between purchased licenses and those installed, and the time it took to accomplish those tasks with or without your program; you can then evaluate approximately the return on investment and how much it brings to your company. It also depends on the number of employees and how segmented your asset management team is. Analyzing your workflow processes for each employee might shed some light on unnecessary tasks within your department, and that would represent an opportunity to improve productivity.
For some, the low hanging fruit is really more around the OPEX cost reduction aspects of ITAM; ROI becomes the logical result.
Some look at the ongoing cost centers—such as ITSM, ERP, procurement and disposal, Energy, and HRIS—and then specific intermittent projects—such as M and A activity, software compliance, OP systems upgrades, and datacenter consolidation and virtualization—for which the value of having a dynamic and up-to-date ITAM system in place is invaluable. An operating system upgrade project alone in a mid to large company may justify the cost of ITAM systems and personnel for many months or years to come.
In Murphy's law, knowing oneself is the ultimate form of aggression. Similarly, in ITAM, knowing where you are broken exposes the value in the ITAM process:
- Does your ITSM system work from live data?
- Is the ERP fixed asset reconciled with the ITAM repository?
- Do you manage software purchases and landscape to the extent that you know your license position (entitlements versus deployments). (Each copy out of compliance can represent $150,000 in fines).
- Do you know how much IT assets are deployed, where they are, their configuration, and the status of these assets?
- Are you aware of what's being disposed of, how it is recorded, and whether software is being harvested for reuse?
From a cost standpoint, if you cannot answer these questions, you might consider this one guiding fact: cost reduction could easily approach 12%-15% of the overall IT budget, no kidding. This alone justifies a good well-funded ITAM function year after year.
One of the main focuses needed for ITAM is to show that it can reduce cost and provide metrics. You can do this in the software management space by reducing renewal costs and standardizing software. Other significant areas of ITAM that can bear results are as follows:
- Reduction in cyber security risk by highlighting vulnerabilities on unsupported software and noncompliant software instances
- Tracking disposal of machines and providing verification of asset status in an automated method
Although all the points just mentioned are accurate, executive management will not move forward if presented with what can be versus what it is along with some type of data and reasons for making ITAM a top priority. Often, executive management will look at other priorities as the real priorities, especially in the face of a financial crisis, cyber attack, or an industry upset.
The top priority for companies is ensuring the relevancy of their offerings. The next priorities are fulfillment of those lines of business, increasing market share, and providing value to their customers. The underlying factor is the need companies have for mobility, social media, fostering an innovative culture, and leveraging their employees' entrepreneurial spirit in addition to finding talent that is knowledgeable and experienced with all the new technologies and nontraditional ways of engaging people to want a company over its competitors.
Why is this relevant to ITAM? How does it demonstrate the value of the ITAM program? Looking at the priorities of the company, an ITAM program can/may do the following things:
- Create funding for programs through its cost savings from the ITAM program or by leveraging the existing technology for new initiatives (without having to purchase).
- Time efficiency will increase employee productivity by creating an automated process that fosters employees to be innovative and agile with the ability to brainstorm creatively. ITAM eliminates the constant firefighting mode at work and creates a more proactive, preventive maintenance mode.
- It may align IT with business to create a collaborative environment, resulting in a profit center. How is this achieved? With ITAM, IT has a 360-degree view that creates transparency in all areas and stages of the business. ITAM helps manage the full life cycle. Although not everything on that cycle falls under IT, ITAM opens the door for communication. IT now has a clearer picture of what the company needs and its pain points. This strategy can lead companies to go to market faster in an accelerated execution phase.
These are some of the key points presented and may prove to be of value to executive management and lead them to move forward and provide the much needed support to their ITAM and SAM teams. With SAM, use these points, among others, plus some scary real-world events, for buy-in on the ITAM program.
During the 2008 financial crisis, enterprise IT groups worldwide had a dire warning and expectations of a great budget reduction. This is no surprise, as any bad year for a company or even an industry leads to decreased funding. During any crisis year, the business case for ITAM must be compelling and relevant.
The following are some steps that best demonstrate the value of that IT improvement business case:
First, avoid focusing solely on financial savings. In a squeezed budget year, it would seem natural for IT managers to promote the direct and indirect savings that are expected from the project. Although outlining the savings is absolutely expected, focusing on that one goal may reduce your chances for approval and funding. Ask yourself how this project relates to corporate and CIO-specific goals. How can you present the value of the project in relation to those goals? Unless you can answer this question and include it in your business case, it is unlikely that you will be funded.
Second, avoid stating benefits solely from an IT operational perspective. A business case that does not lay out the benefits to customers (internal and external) is unlikely to win the funding contest. Certainly, operational improvements will occur when the project is completed. Will the CIO be able to figure out the global value of risk reduction of loss or theft if you only explain the expected improvements in the life-cycle process?
Stepping back from the heads-down detailed view to analyze the global value can be the hardest part of preparing a business case. You cannot assume that the executives have done research on or can intuit how the project relates to their ultimate goals. You have to create those connections for the executive team in a crystal clear manner.
To assure that your project receives a proper review and is compared at full value with other possible budget items, consider taking the following steps before hitting send on that business case:
- Relate the project to how it will help the company grow: Companies acquire, merge, and divest often to increase profitability. While the deal on paper is good, the advantages gained can be lost in the execution of how assets are controlled and inventoried. Acquiring a company with inadequate software licenses, a pending audit, or software licenses that are not transferable is a nightmare. Can the business case relate how these improvements prepare the organization for a major change? Can the documentation developed during the project be added to the due diligence team's materials so that they can analyze a prospective acquisition accordingly?
- Understand the CIO's personal and corporate goals: If the CIO is a heads down IT-focused leader, then a business case built on savings from efficiency may still work. However, CIOs are less internally focused because operational goals do not lead to a seat on the executive team. The upwardly mobile CIO ties IT department activities to corporate goals such as increasing profitability or customer satisfaction. A business case that presents upgrading to maintain technology is more likely to be funded if it is related to a corporate goal such as solving a specific business issue.
- Always include service management: The service management approach to IT operations is popular and is frequently reported in the media read by executives. If an IT project will help improve the execution of a service or the adoption of service management principles, then ensure that you explicitly state how the change will lead to enhanced service management.
- Relate projects to impending technology changes: Sometimes, a major project that has been already underway is the most important aspect to mention in the business case. If the business case can be construed as competing against money already spent, you have already lost. However, if you can show how this project adds value to the ongoing project, you gain a perception advantage and champion those who are invested in the success of the other project. For example, the adoption of virtualized servers changes the relationship of the server to the cost center, eliminating one per application or department. What if an automation project business case lists that the configurations and inventory will be easily tracked in a virtual environment as a benefit? Surely, the business case is much more likely to snag attention than if it was focused on the goal of improving control of the asset inventory.
- Uncover "found money": A business case must always talk about the cost versus benefit to be considered at all. In many cases, IT projects can offer a reasonable expectation of savings based on expenditures that will not occur, enabling bulk purchasing or freeing up resources through automation. Ensure that the savings are real and measurable. Sampling is a reasonable method for gauging the potential savings. Other sources of information to back up predicted savings can come from research on the Internet, analysts, or even your vendors, who are eager to help you receive funding.
By stepping away from the details and relating the project to external influences, the project is more likely to be understood and weighed appropriately against other initiatives.