IT Asset Management (ITAM) and How It Can Help Businesses

IT asset management (ITAM) is a practice virtually all companies with a technological component engage in, even if they don't realize it. By more thoughtfully engaging in IT asset management, a company can save money, better track data, and increase its overall security. If you pursue the relevant certifications, you can become a valuable asset for an IT team, offering an opportunity to improve operations. In this article, we define IT asset management, discuss its benefits, review the stages of the IT asset lifecycle, and explore how an IT asset manager helps at each stage.

What is ITAM?

ITAM refers to the management of a company's information, systems, or hardware. Generally, industry professionals use the term specifically to refer to active management, where someone knowledgeable in IT asset management engages in established best practices to benefit the company. Many professionals think of IT asset management in terms of the IT asset lifecycle, which has five parts. These parts sometimes go by different names but are generally as follows:

• Plan

• Develop or acquire

• Integrate

• Maintain and upgrade

• Retire

At each of these steps, IT asset management involves looking at a company's current approach and resources and then working to improve upon that approach.

Benefits of IT asset management

An active approach to IT asset management performed by a skilled professional offers many benefits. Some of the most noteworthy advantages include:

Cost reduction

A company's hardware and software can represent one of its more significant costs. This is especially true for tech-centric companies, which may spend thousands or tens of thousands of dollars on upgrades, maintenance, and subscriptions each year. One of an IT asset manager's primary duties is to analyze the cost of these assets and maximize the return on a company's investment. For example, subscriptions are often much more expensive over time than buying a licence outright. A manager can determine if the company is likely to use software long enough to justify the higher initial cost of a licence.

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Supports financial analysis

IT asset management also provides companies with valuable insights into the financial impact IT assets have on revenue generation. Understanding the effects on revenue can help companies forecast returns on the assets they currently have in use. Evaluating assets in this way makes IT asset management an essential method for measuring the profitability of a business's IT systems, which is important for developing and improving departmental budgets.

Ensures IT assets meet standards

Compliance with financial regulations is necessary, and the integration of IT asset management practices can help businesses and organizations monitor and report on the financial activities of all IT systems and processes. This ensures technology teams measure and document assets according to local, provincial, and federal standards. Additionally, effective IT asset management can encourage team awareness and continuous development in IT best practices, software compliance, and changes to regulatory processes.

Protects sensitive data

Effective IT asset management also improves security practices by providing managers and team members with methods for ensuring compliance with IT security standards. With regular oversight of specific IT assets, teams can develop and implement disaster recovery plans that help ensure the security of IT data and sensitive information. In addition, an IT asset management team often has greater control over IT security integration and support.

Allows for more effective oversight

Another advantage of IT asset management integration is that it gives companies more oversight and control of IT asset allocations, modifications, and adjustments. Companies can monitor IT processes more closely and control activities to help ensure optimum technical performance. When teams adjust certain practices that involve technology assets, IT asset management supports the development and planning for any changes to asset allocation.

Improves team collaboration

The oversight of IT assets informs other business areas, including financial planning and accounting, marketing and sales, and business administration. By directing the way companies use and apply IT assets, teams can collaborate more effectively with other departments to better support business goals. Effective integration of this process also encourages open communication between management and IT teams, helping to ensure staff, executives, and company shareholders have constant insight into IT profitability.

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What are IT management best practices?

IT asset management provides a structure for organizing, maintaining, and monitoring technology integration. When incorporating asset management, companies often establish best practices that teams adhere to when completing management tasks. Several areas to establish best practices include:

Finance

IT asset management best practices often include financial management to support budget planning, documentation, and financial forecasting. With financial management best practices, IT asset management helps companies monitor fixed and variable IT assets. Understanding how these assets affect cash flow and revenue generation is necessary for evaluating strategies that can reduce costs and increase returns on assets.

Regulatory practices

These best practices also include methods for helping to ensure assets comply with regulatory standards. Commonly, asset management integration allows for better oversight of IT compliance, giving companies more preparation and support for developing risk mitigation strategies. Effective best practices in this area also establish parameters for teams to follow when monitoring assets for compliance.

Contract management

Many companies integrate IT solutions that rely on support from third-party providers. In these cases, IT asset management best practices outline communication standards and establish transaction histories. This way, businesses have more control of assets they acquire through third-party contracts.

Policy development

IT asset management establishes best practices for developing and managing company policies for asset oversight. These policies can outline directives regarding the allocation, documentation, maintenance, and integration of IT assets. Additionally, IT asset management supports the enforcement of policies by ensuring team communication and awareness of necessary objectives.

Asset oversight

Applying best practices is essential for overall asset direction and management. IT asset management helps businesses evaluate the most suitable and cost-effective assets before acquisition so integration can add to profitability. When a company acquires new IT assets, management teams identify, sort, and maintain these acquisitions in a management database. This helps ensure IT systems are easily accessible when businesses report on assets.

Managing the asset lifecycle

The IT asset lifecycle is an important part of IT asset management. It's an ongoing process almost all companies engage in, as technology slowly becomes obsolete or stops working. An IT asset manager's primary duties involve making this lifecycle as optimal for a company's requirements as possible. The following is an explanation of how a manager can help in each stage of the lifecycle:

Planning

A company's plan for both current and future assets is one of the most important stages of the lifecycle. This is because it determines where they intend to commit resources. When a manager interferes at this stage, they can make adjustments that may have an impact on multiple years of a company's future. For example, a company might face a choice of a cheap but less effective computer or an expensive but more modern device. An IT asset manager can assess the pros and cons of each before the company makes any commitment.

Development and acquisition

The development and acquisition stage of the asset lifecycle is highly dependent on a company's plans. In some cases, this stage is very simple, requiring only the purchase of a new computer or piece of software. In other cases, it may involve months or years of developmental processes as the company builds new machines or software customized to its exact requirements. Either way, it's the duty of an IT asset manager to control costs while also making sure the company gets what its plan requires on time.

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Integration

This stage of the IT asset lifecycle involves blending new assets into the company's current model. Assets may serve to replace older assets, work with them, or serve a purpose new to the company. In some cases, integration can present unique challenges, such as finding the best way for software to work together when that isn't an in-built feature. Some IT assets may require a significant change in a company's model. Imagine scenarios where modern technology can readily replace the obsolete, such as converting a paper filing system into a digital database.

Maintenance and upgrades

Once an IT asset manager has integrated an asset into a company's model, significant input may not be necessary for months or years. Technology that's new or has few moving parts might even serve its purpose indefinitely. Despite this, most company assets experience some wear over time. Nearly all technology also eventually sees innovation. It's the duty of an IT asset manager to decide when maintenance or upgrades are appropriate. Often, a manager establishes a maintenance schedule for technology so they can catch problems early. They then upgrade assets when it's cost-effective to do so.

Retirement

IT assets, like assets of most kinds, usually decline in value over time. At a certain time, an asset is obsolete or too damaged for an IT asset manager to justify upgrades and repairs. As an example, it's possible to upgrade most computers part-by-part. Despite this, the overall computer might be so outdated that a company is better off upgrading the entire device. In some cases, a device may be so old that the technology is no longer supported by its original manufacturer or developer.

Retiring assets doesn't always mean destruction. It means a company no longer intends to use the asset. While a company might destroy or delete some assets, it can also sell, recycle, give away, or store assets. An IT asset manager can determine which option is the best for the company.