Saving IT asset management

Organisations waste billions of dollars on IT each year. They buy unnecessary software licences, pay for hardware products after their leases have expired, and even dump unwanted equipment in ‘corporate mausoleums’. At the same time, employees steal and lose computers, copy software illegally and


Developer makes IT pay

IT asset management is difficult for all organisations. For those with a distributed workforce, it is a major logistical challenge. Dispatching IT administrators out to remote sites to run inventory checks on users’ devices is simply not a cost-effective option for most companies.

This was certainly the case for UK-based property development company Taylor Woodrow, whose managers and engineers use their computers on remote construction sites. “We just did not know where all of our assets were,” says Richard Boutle, Taylor Woodrow’s technical project manager.

To more efficiently track about 1,800 IT assets, Taylor Woodrow licensed software from systems management specialist Computer Associates (CA). By using CA’s IT asset management software, Unicenter Asset Management, Taylor Woodrow is able to run regular inventories, checking how many of its staff are actually using its software and hardware, and where it is located.

Asset Management is installed on the company’s central server and workgroup servers, which use software agents to gather data about each user’s workstation. “The Asset Management agent [which is a semi-autonomous software program] is held on a workgroup server at a remote location and then run by each workstation when they log on,” says Boutle.

The product is able to track a device’s software configuration, as well as hardware components, including serial numbers, memory and disks. Boutle says that the product has proved invaluable. In 2001, for example, Microsoft requested that Taylor Woodrow prove it was adhering to its licensing agreement. The company used Asset Manager to run a software audit that proved it was within the payment terms of its licensing agreement.

The software also proved useful following Taylor Woodrow’s acquisition of Bryant Homes, a UK-based construction company, in mid-2000. When the deal was completed, it had little knowledge about the scale of the company’s IT assets. Boutle says Asset Management has enabled it to quickly gather this information and consolidate a number of Bryant’s assets.

Asset Management has also been crucial to the company’s migration of its users from Microsoft Windows 95 and 98 to Windows 2000, says Boutle. “Asset Management has been a big help in enabling us to figure out which machines have been upgraded and which have not.”

The next challenge for Taylor Woodrow is to integrate its ITAM with the latest version of CA’ s help desk software, Service Desk.



download pirated software from the Internet.

And it is getting worse: more companies are distributing their systems to remote – and therefore less manageable locations. For IT managers, the task of tracking and managing a remote workforce using devices, such as laptops, and personal digital assistants, is a logistical nightmare (see box, Developer makes IT pay).

The financial and regulatory environment compounds these problems. IT directors are under pressure to reduce this wasted expenditure; stronger corporate governance requires that all assets are accounted for; and there are new and stronger punishments for those companies that allow their staff to use unlicensed, or pirated, software (see box, Piracy? Not us).

While the threat of the punishment might encourage some managers to be more vigilant, executives from one group of software suppliers – those supplying IT asset management (ITAM) software say there is a much more compelling reason to accurately track and control the use of both hardware and software: it saves money.

Their argument: many companies continue to pay for IT resources that they no longer require. For example, many continue to pay software licence fees for staff who have either left, or no longer require them, as well as maintenance fees for obsolete equipment. Companies can also rack up exorbitant help desk costs if help staff do not know exactly what systems are being used.

“Companies often don’t know what IT assets they have, so when they come to buy a software licence, for example, they over-compensate by purchasing too much,” says Ron Nabors, chief marketing officer at ITAM supplier Tangram Enterprise Solutions (Tangram). For example, during a restructuring, a US telecommunications company found it had several high-end servers, each with a full stack of registered and paid for software – but it found no-one using them and no manager who remembered originally having bought them.

One way to tackle these issues is to spend even more on software – on ITAM software, to be precise. Suppliers, who include Computer Associates, IBM, Peregrine Systems, Tally Systems, Tangram, and MRO Software, all say their customers save money and gain greater control over their business using their software.

Their products can be separated into two main types: IT asset tracking software and IT asset portfolio management software.

IT asset tracking products, from suppliers such as Tally Systems, are mainly used to monitor changes made to an asset’s configuration; portfolio management software, from, for example, MRO Software, concentrates more on the relationship between on an asset and its contractual elements, such as cost, depreciation and warranty terms, says Robert McNeill, an analyst at market research company Giga Information Group.

Vendors of both sets of products promise to deliver very substantial savings. “On average, just for the software management element, ITAM software can save between 5% and 10% of an organisation’s IT budget,” says Nabors at Tangram. That is not trivial: in some cases, it could even make a company five or ten per cent more profitable.

These cost savings are not limited to software. For example, IT services giant Accenture claims it saved about $11.5 million in 2001 by using MRO Software’s ITAM products to track the use of PCs across it global operations.

How? Accenture says it was able to slash its PC procurement budget by $3 million via enhanced asset tracking capabilities, as well as an additional $600,000 from the company’s existing PC warranty and leasing agreements with suppliers. But Accenture’s biggest savings: it was able to cut salary costs as a result of being able to redeploy IT staff on client projects (obviously, not an option open to most organisations), and it was even able to reduce the number of employees who ‘walked away’ with its PCs.

For all these reasons, ITAM software is selling well. Organisations will spend about $145 million on ITAM software licences in 2002, compared to just $20 million in 1998, estimates Giga.

But Giga warns: “A positive return on investment for ITAM often takes between 12 and 18 months.” That is short by most standards, but too long for some finance directors seeking to control costs. Giga thinks the installation and use of ITAM software should be tied to specific business process change. “ITAM is a business process supported by one or more tools, not a tool supported by business processes,” says McNeill.

Hard labour

IT directors rarely question the need for some kind of monitoring and tracking software for IT – after all, it makes their jobs much easier. The questions they always ask: What are the cost benefits and challenges of implementing ITAM projects? And what alternatives are there to buying packaged software? One alternative is to physically audit the systems (which will still be necessary from time to time, anyway). Many organisations routinely carry out inventory checks of their IT assets. But physical inventory checks can be expensive, error prone and labour-intensive, because the auditor has to visit each user’s desktop, says John Mahon, vice president of Europe at IT asset tracking specialist Tally Systems. And, of course, many


Piracy? Not us

When the UK government passed its new Copyright, etc and Trade Marks (Offences and Enforcement) Act 2002, it is unlikely that many IT managers or company directors were deeply troubled by the threat of ten years imprisonment – or the huge fines now made possible – for using pirated software.

For one, most directors are simply unaware that many of their staff are breaking the law by using unlicensed software, downloading pirated products from the Internet, or violating leasing contracts by running unauthorised software. And, second, they probably feel that the law isn’t really aimed at them, but at professional copyright pirates and counterfeit specialists, especially where music or films are involved.

In one sense, they would be right about this. The draconian new punishments are primarily intended to deter more people from exploiting the illegal business opportunities made ever easier by digital technologies. But, at the same time, the government – and the software industry that has lobbied it relentlessly for nearly two decades – are concerned that respectable businesses develop and maintain their vigilance. That means, every now and again, they will make an example of one otherwise innocent organisation.

One guilty party was UK retailer House of Fraser, which was fined an undisclosed sum in May 2002 for using significant volumes of Macromedia software. It joins a growing list of organisations that have received a nasty surprise and some damning publicity over the years.

Paul Brennan, general counsel of the Federation Against Software Theft (FAST), a supplier-backed UK non-profit lobbying group, thinks there are many more examples like House of Fraser. “About a quarter of software used [in the UK] has not been accounted for”. By this, he means that that the level of business in the UK suggests that a lot more software should be sold. Many companies, he said, “aware of what is going on, but turn a blind eye to the problem”.

As Brennan at FAST say, “It [the new UK copyright theft Act] is the equivalent of a big stick with which to confront organisations that are flouting copyright law. It clearly demonstrates that illegal software is a criminal issue, and an offence that will not be tolerated.”



devices are now portable.

Analyst company Gartner estimates that physical inventories can cost, on average, $50 per system, given the time associated with visiting each station, identifying the hardware and software components, and merging information onto a single database or spreadsheet.

To help companies reduce the cost of physical inventory checks, ITAM products include auto-discovery tools, based on semi-autonomous software agents that log all hardware and software in use. These tools capture technical data about an IT asset’s hardware and software components.

The benefits of using such software may not always be apparent at first. Back in 2000, a US cosmetics manufacturing conglomerate, which refused to be named, licensed Tangram’s Asset Insight product. The goal was to reduce the burden of making physical inventories. The company’s administrators were soon running automated inventory checks across its 3,800 workstations and servers every two weeks, producing a claimed saving of more than $750,000 on its IT inventory activities in 2001.

Then, in late 2001, the company received a letter from the Business Software Alliance (BSA), a US industry lobby group allied to the UK’s Federation Against Software Theft. The letter requested an audit of its Microsoft applications. Microsoft estimated that the company required 10,000 licences of its software, but it was only paying for 4,000.

After running an audit using Asset Insight, it was able to prove that it only needed 4,000 licences. Without this auditing capability, the company says it would either have had to pay $1.8 million for an additional 6,000 licences worth about $300 each, or conducted an expensive manual audit to the satisfaction of the BSA.

ITAM software can also be used as part of a help desk suite. Often, help desk staff are not able to view details about a user’s equipment, and previous problems, when users call with a query. But by integrating help desk software with ITAM products, help desk staff can receive a detailed analysis of a users’ equipment – ranging from their software configuration to hardware serial numbers, to memory capacity.

Alistair McPherson, a business strategist at Computer Associates in the UK, says the integration of ITAM and help desk software enables companies not only to cut costs, but also “to escalate the problem to the most appropriate person more quickly”. Accenture claims it saved $1.9 million from its help desk operations in 2001 by using ITAM products from MRO Software.

Asset test

If all this makes the case for ITAM sound overwhelming, there is a caveat, and a big one. Despite all the vendors’ promises, many organisations have failed to generate an acceptable return from ITAM software. “ITAM has promised so much for so many years and I have seen it fail many times. It often becomes ‘shelfware’ because companies do not make a clear business case,” says McNeill at Giga.

Giga’s advice is that ITAM projects need to be tied to business process change, such as getting business managers to submit monthly expenditure reports. But that means an escalation of the overall investment, and an increase in the number of managers in its effective deployment.

Because of this, many IT managers still prefer alternative approaches. For example, many companies use inventory management modules within popular systems management software, such as HP OpenView, which has some asset management functions. Other companies simply record data in spreadsheets, such as Microsoft Excel, which can then be made available to the help desk staff on an intranet.

Whatever tools they use, however, more organisations are recognising the absurdity of not accurately recording and tracking changes to the IT infrastructure. Even if the software copying legislation is not an issue for most IT directors, getting the most from next year’s budget most certainly is.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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