RSS feedsHow to do you accurately value your IT assets?
Lisa Hammond, founder and chief executive of consultancy Centrix
Let’s assume you’ve gone through the graft of identifying your assets from a hardware perspective, software perspective and a people perspective as well knowledge assets and data assets are harder to value.
Looking at the more tangible ones like hardware, you are going to have to go through where you bought it and how much you paid for it, and I think it’s important that you buy it as part of a managed contract.
So, for example, the average cost per year of just a normal Intel-based server is between £15,000 and £20,000 per year.
These aren’t small costs and you may be directly charged that by a vendor, you also might have to look at how much you paid for it, then the support desk costs, then the people who are managing it the build up of those costs.
Experienced companies likes Centrix and Deloitte have methods for you to cost
hardware assets. That shouldn’t be such a slog to do. And for your software it’s
a
similar story.
You are going to have to look at your procurement, where you ordered them, where the invoices are, how much you paid for them, and build a picture up of the price of your software assets as well.
Then between your people assets, contractor rates, how many people you have got, where they are working etc. you will quickly be able to see your costs, the total cost of owning that asset, which is actually the really important one and how much you’re depreciating that asset each year.
This applies whether you have got three years, or five years, typically those are the two realms for depreciation.
Once you have done that and you have a value of the asset, you will know where it is and you can then use that to drive service costing for IT and that fundamentally is one of the tools you use to begin to reduce a cost of IT.
How do you use effective asset management to drive down the costs of your IT infrastructure?
John Winstanley, director at Deloitte’s technology consulting practice
I think the biggest value of assets management is getting cost control into the IT department. You can discover whether you are buying assets when you really need them.
And for quite a lot of organisations, once they have managed to qualify their usage, can re-deploy, which actually means you can get into a cost avoidance situation where you don’t need to buy as many new servers because you can re-use equipment you already have.
Similar things happen with licences and expensive development licences, which may sit within an IT development department and will be used on a laptop on a piece of work and then are frequently not re-allocated when that piece of work finishes.
Consequently people end up re-buying them, so similar things happen in software where you can check whether a licence is being used and re-allocated.
So there is potentially quite a significant benefit in cost avoidance in terms of having an up-to-date asset management register, which means you can look at where you can deploy equipment you’ve already bought and software that you have already bought.
Also what it allows you to do, is aggregate your spend with the vendors and better understand the vendor’s performance, particularly around maintenance. It also allows you to look at them commercially and renegotiate your contractual commitments in that area and again looking at significant cost reduction.
For me it’s about having the financial data and the asset data to enable you to run commercial strategies to reduce your on-going budgets.
Chaired by Paul Grant
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