At last, IT departments can directly track assets to reduce their costs

July '99 Asset Management

It will be IT departments that incite the automation of capital asset inventory management. Why? With IT budgets continually rising, companies are demanding that IT departments better manage their assets, including those employed by their increasingly mobile workforces.

Although new tools, software and processes are available to inventory assets and calculate costs, IT departments are hampered by the inability to collect transaction data identifying asset movements and changes on-line. Using radio frequency identification technology, read/write e-tracking tags and readers provide the missing link to a complete IT capital asset management program.

With proximity cards and readers already part of their access control arsenal, security directors can provide the missing link between asset location tracking and enterprise-wide asset management systems.In the great majority of organisations, today’s IT departments have massive investments in high value assets such as PCs, laptops and servers. A major goal of these departments is to manage these assets, especially in an increasingly mobile workplace.

Presently, fundamental information such as the current inventory and value of an organisation’s IT assets often remains unknown until the yearly inventory is completed. With the changing requirements of IT assets and their mobility, this inventory becomes obsolete almost immediately.

Such obsolescence leads to inaccurate financial records, wrong depreciation values, incorrect vendor billings and lease payments, imprecise tax assessments and inappropriate information on which to base future purchase decisions. This creates an increased demand for IT departments to know exactly what IT assets they have, what is happening to them, and how much they cost. They need to collect data that provides information on –

• Expired leases. All too frequently, if a product is not returned at the end of its lease period, billing reverts to more costly month-to month charges.

• Phantom service. Quite often, service, including routine maintenance and upgrades, is called for in the contract but never provided.

• Service not required. Many organisations pay for service on equipment that is no longer being used.

• Unnecessary purchases. Why buy new products when there are unused ones elsewhere?

• Unnecessary laptops. Everyone wants one, but they do cost more to buy and maintain. How can you tell if a department’s employees are making use of their portability?

Already, many diverse systems are being integrated – asset management, access control, human resources, help desks, fixed asset accounting, among others – and new ones are constantly being added to attack these problems. That’s important because IT asset management asks questions different than what can be answered by the typical fixed asset property book. As an example, a table doesn’t require upgrades. PCs do.

Asset Management – Inventory is Only the Beginning

According to Gartner Research, within only two years, 70 percent of enterprises will build processes to more accurately account for distributed IT assets. Indeed, more than 40 percent of enterprises are now building or buying a central database for loading all relevant IT asset data. Gartner also prophesises that sound asset management will yield savings of 11-26 percent annually. Accurate inventory tools will save between US$25-141 annually per PC. Others estimate first year savings of between US$300 to more than US$2000 per desktop.

International Data Corporation advises that companies that neglect Asset Management add an average of 19 percent onto their annual PC costs. To make matters worse, nearly ten percent of IT purchases are inefficient, including purchases of unused or underused hardware and software.

Regardless of whose figures seem more reasonable, every company is aware that remedies must be taken to hold the line on IT costs. Periodically, manual inventories are taken. Since they are very time-consuming, most facilities undertake such updates once a year. Because some assets, such as laptops are mobile, tracking them is difficult. Even systems using barcodes don’t help much. The item must still be located, the barcode discovered, and the asset correlated with information in the property book.

Therefore, most organisations, in one way or another, do have an inventory of their assets. Most start with some version of the property book to get the serial number, its cost and acquisition date, lease expiration date if not owned and, sometimes, its location within the facility. Not appropriate for more complex IT inventories, most are turning to IT specific repositories that can track configurations, enhancements, software licenses, software license terms and other information.

However, after implementing all these tools and undergoing all these procedures, about the only thing the organisation knows is that it still has the property! Although the inventory of assets has been tracked and identified, nobody still has an idea of what the budget analysts really want to know – what is this item costing? How can this cost be reduced? How is the asset being used? By whom? Who had it last? Has it been upgraded or repaired?

These and others are very important questions and current systems usually provide only tentative glimpses of the answers for the people in finance signing the checks and the IT department being charged.

The Missing Link

The problem today is simply that it is too difficult, time-consuming and costly to gather the data for asset tracking and asset management systems. Manual inventory is time-consuming and ineffective. Barcode helps only somewhat. LAN autodiscovery only handles a subset of assets. What’s needed is a tool that automatically updates these systems.

Suppose that you could track your assets electronically, identifying them, their contents and movements. This is possible today with radio frequency identification (RFID) technology.

HID’s ProxTrak technology permits communications between RFID-tagged PC’s, laptops, other high value corporate property and access control systems as well as capital asset management systems. It collects data at the source of the data, making it available for asset tracking and asset management reporting.

As a travelling database, the RFID Asset Management tag not only provides current asset information such as what is going where with whom and when, it also holds historical data such as configurations, maintenance dates, leasing information or whatever IT management thinks is important. IT departments can obtain this information even without turning the PC on. Capturing and updating costs events, such as maintenance and service, as they occur, provides valid input to the IT department’s accounting procedures.

With data collected in an on-line manner, IT staff can finally forecast future asset requirements based on actual usage as it is happening.

ProxTrak technology, when combined with asset tracking and asset management systems, provides a fresh, new dimension to asset location and tracking. With it you can find out –

• Who took a specific item where and when. Property passes become electronic and more efficient, giving rise to fewer attempts to circumvent the system.

• When a specific product last left a location. As importantly, has it recently stopped going in and out? This might suggest that it’s no longer being used.

• If a department often requisitions laptops yet rarely takes them home.

• Assures all the PCs ordered were received. Did they contain all the upgrades they were supposed to? Were they properly “registered” or “enrolled” in the asset management framework?

• When, how long, how often, or if this item has been in maintenance. Upgrade information can be right on the tag.

• What’s the lease or service contract period.

Asset Security and Convenience

According to Gartner, the predicted theft rate of laptops is 2.5 percent per year. Cost to a company is US$6800 plus the lost data. It’s not uncommon for a corporation to lose over US$250,000 in laptops in any one year.

Extending asset management to access control, or vice-versa, assures that unauthorised movements of IT assets are significantly curtailed. Only those authorised to move the assets from the facility are allowed to do so. Just as the access control system of today restricts the movements of unauthorised personnel, so too, it can inhibit the mobility of the wrong combination of personnel and product.

At the same time, the e-property passes the RFID technology provides don’t restrict the movement of authorised personnel. They streamline property passes for those that use them and simplify electronic monitoring, enabling security to be maintained with minimum intrusion versus guard station “briefcase and purse” checks.

Going a step further, tags that are integrated by the manufacturer can be used to disable assets removed by unauthorised persons. In this way, not only is the asset protected, so is the company’s proprietary information.

Speedy Deployment

Deployment of new IT assets can be accomplished in minutes versus days, simultaneously reducing errors and short shipments. While still on the loading dock, before they are even unpacked, a ProxTrak reader helps to reconcile e-commerce bills of lading, determine PC configurations, and identify ultimate recipients, all in one step.

With this reader, the IT department deployment manager can also write onto the tag who the end user will be and record software requirements. Unpacked, on the appropriate desk and plugged in, the IT department, using software such as IBM’s LANClient Control Manager and Wake on LAN, reads the RFID-programmed software requirements, downloads the appropriate operating system image and powers the system off.

From that point on, physical inventories, when done as scheduled for auditing or, quickly, for a pending merger or acquisition, are easy. Simply walk around the premises. Since IT knows where the asset was last, it knows where it is now or, if out of the building, who has it. Once located, critical system data is read in seconds.

Real Time Transaction E-Data Collection Yields Improved IT Asset Management

At last, with to-date accurate technology trend information, IT decision-makers can improve the planning and budgeting of IT asset changes. Organisations can eliminate costly, time-consuming and inefficient physical inventories. No longer do they need to explain why there are such large variances between the fixed-asset accounting system and their installed assets.

Knowing the true costs of upgrades and with maintenance documented, IT departments can better budget, plan and manage purchases. They now have the information needed to negotiate volume discounts, reallocate assets or switch over to another system. IT reverts back to being in charge of vendor relations, not at their mercy.

Most importantly, ProxTrak-enabled Asset Management is available today.

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