ITAM is the business practice centered on software and hardware assets and their multifaceted roles within the organization. The risk and value of these assets warrants management beyond normal supply chain procedures, especially because the information about these assets is so valuable to IT service management, financial management, and security. Tracking and creating an inventory is only the first function ITAM brings to the data center. While data center management has the difficult job of choosing and mapping out the next technology improvement, IT asset management partners with IT to identify the financial, contractual, and internal process snags that so often slow that transition.

Expectations for data center services have grown beyond the control of IT costs since the traditional model of user-driven system implementation. In that model, users took a lead role in requesting and acquiring the PCs, servers, and server OS. After integrating and testing, data center operations took over responsibility for the production environment. This scenario led to low asset utilization. For instance, the starting point on servers could be as low as 20 to 30 percent with expectations for growing over time to 80 to 90 percent. In a best-case scenario, capacity and power consumption were wasted until that growth occurred. In some cases, the expected growth never happened (see figure 1).

Takeshi Takeuchi, head of the Japanese office for the International Association of IT Asset Managers, Inc., states “as much as 70 percent of hardware and software data center assets went unused. At the same time, users were acquiring additional assets for new processing needs, adding to the waste.”

EMPOWERING SERVICE MANAGEMENT

The transition to virtualized, pooled environments, including cloud options, is a major step forward in maximizing investments in IT. This transition requires an in-depth understanding of the impact to the finances and contracts for assets as well as the service expectations. This broader understanding, through repeatable processes and sustainable data, is the contribution of ITAM. ITAM facilitates the IT service management operations model (such as the Information Technology Infrastructure Library, or ITIL,) by contributing to the visualization of the software and hardware that is part of the services.

The IT service management model, which changes the viewpoint of IT to one of service and delivery, has greatly benefited the organization.

Results from a Forrester survey of ITSM professionals identify the following benefits and the significant percentage of respondents claiming each benefit:

  • Organizational productivity: 85 percent
  • Service quality: 83 percent
  • IT’s reputation: 65 percent
  • Operational costs: 41 percent

Whether the data center is for internal customers or supplies services for multiple external customers, the focus remains on delivering services and meeting or exceeding the service level agreements (SLAs) in place. In either case, IT asset management simplifies the analysis of what can be delivered in an SLA and the measurement of that achievement.

That simplification becomes more valuable as the complexities of providing for multiple customers and utilizing the cloud computing resources of other providers escalates the management difficulties. In order to meet the SLA commitment to the end user, the SLA with the cloud provider has to be adjusted as well to meet the requirement. For instance, consider the scenario of an end-user SLA requiring 90 percent availability. If a data center’s availability is 95 percent, then a public cloud service supporting this service has to deliver more than 95 percent to satisfy the 90 percent end-user availability (95 percent x 95 percent = 90.25 percent). If the public cloud service is only obligated to a 90 percent availability, then failure is likely (95 percent x 90 percent = 85.5 percent).

While the components of a service extend beyond the software and hardware, improved information about these assets and the analysis of that data is at the heart of successful service management.

REDUCING COMPLIANCE RISK

In addition to the direct benefits that ITAM brings to service management, ITAM also plays an important role in reducing the risk of compliance issues and audits with poor results. IT asset data and processes are at the heart of compliance for:

  • Software licenses, controlled by copyright laws and contractual agreements
  • Hardware disposal and recycling, regulated by toxic waste laws as well as recycling and landfill content laws
  • Privacy, either individual or patient privacy, and data security, which require a transparent electronic environment to facilitate governance

Most organizations have difficulty reducing the risks in each of the areas (see figure 2). For example, a recently published report by the Business Software Alliance found a global piracy rate of 42 percent. Some portion of this pirated software is from organizations that cannot prove their legitimate purchase due to poor processes and documentation.

Tracking and managing IT assets throughout their use is a foundation for all of the types of compliance defined above. For instance, governance often requires being able to demonstrate ownership of specific assets such as utilizing:

  • Housing service, with retained ownership of assets
  • Service provided with the service’s pooled assets
  • Internal assets that are in production, hot standby, cold standby, etc.

Compliance risk reduction is directly addressed by ITAM’s adherence to the details required for compliance. The International Association of IT Asset Managers, Inc. recommends that organizations reduce confusion surrounding how software compliance is defined per provider by negotiating that definition into the contracts. Overall, the best practices build the processes to ensure that the investment in software maintains its value. IT asset managers are taught to create and enforce strong compliance policies as an effective means of gaining employee mindshare at all levels of the organization.

ITAM INCREASES DATA CENTER ROI

The complexity of the data center continues to escalate. The Data Center Decisions 2011 survey, released by SearchDataCenter.com, states there has been a strong trend towards the proliferation of 8, 10, and 12-core processors so that “…smaller servers are providing more computing power than they did a few years ago, allowing IT administrators to operate more workloads efficiently on less hardware.”

The curse of this approach is that it increases the difficulty of provisioning, tracking, and maintaining servers. Issues include the lack of agility for creating new services in a timely manner. Takeuchi explains that “without IT asset management, it can take months to change or add a new service. This level is not acceptable as we need to provide for rapid growth, change, and exits.”

ITAM provides the data and coordinates the business aspects of server consolation (see figure 3).

For example, when reassigning a resource, the following ITAM steps are taken:

  • With a CPU core assignment to VM, change the Java App Server licensing entitlement to remain compliant
  • The logical memory or storage assignment change must be visualized and tied to a physical asset, with associated physical asset costs
  • Create a baseline for business impact analysis, rollback preparation, and change history

ITAM backs up the agility and flexibility offered by the virtual technologies with the business discipline to deliver services with controls and visibility maintained.

Service providers equally benefit from ITAM. Would a service provider make its customer responsible for that non-compliant Java App Server if the reassignment did not include the due diligence for the license? When executing services for customers, do they tie software license agreement and EULA to IT service, so that customers know exactly what conditions and measurements must be monitored and managed? How are these changes impacting charges to the customer?

ITAM allows the service provider as well as the data center with internal customers to set accurate pricing for customer based on the true costs of the services provided. A service provider Takeuchi worked with utilized the following ITAM data to set prices:

  • Acquisition cost
  • Maintenance coverage and cost
  • Warranty specifics
  • Contractual restrictions for specific hardware
  • Software licensing limitations
  • Hardware configurations
  • Anticipated disposal costs

The value of these data is easy to see in the case of multiple clients requesting services with the same outcome but different availability. The details listed above, combined with the technical characteristics of the hardware, are instrumental in setting the hierarchy of pricing depending on the unique mix of services requested by the client.

Any data center striving to realize a service-driven model relies on being able to assign costs to the components of the service (see figure 4). The asset’s costs, in all of their complexity, are the responsibility of ITAM, and the best practices of ITAM are as important as the data itself. Achieving maximum service management success requires ITAM:

  • Aligning ITAM policies and procedure to support ITSM strategy
  • Integration of ITAM and ITSM systems as many vendors have already done
  • Continuing the integration of ITAM with IT finance management

In addition, CIOs have been focused on money-saving strategies that ITAM supports, such as server consolidation projects. The contribution of ITAM is not going to shrink as that focus shifts. As budgets increase, CIO interest is moving to revenue-generating projects according to a recent report from the Harvey Nash Group and TelecityGroup. A recent Gartner survey states that 28 percent of organizations are already using ITAM data to support financial management and IT strategies. With a majority claiming satisfaction with IT asset management results in the survey, the data center should not be the last place to utilize ITAM.