What Is IT Asset Management?

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Calender
May 28, 2024
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IT asset management equips organizations to gain maximum value from their IT investments. As your company expands and you acquire more hardware, software, and data assets, this adoption makes asset tracking increasingly crucial.

According to Research and Markets, the global IT asset management software market will grow at a 7.2% annual rate from 2021 to 2026.

As a result, if you implement an effective ITAM strategy, you can optimize your spending, enhance security, boost governance, and make the best possible decisions. It also helps streamline the IT asset lifecycle, from procurement through maintenance to disposal.

Proper software asset management helps you leverage technology efficiently to optimize software assets while mitigating risks. Read on to learn about ITAM’s key components, benefits, and best practices.

You will also gain valuable insights into streamlining asset lifecycles, optimizing costs, ensuring compliance, and maximizing the value of your app stack investments while minimizing associated risks.

What Is IT Asset Management?

IT asset management, or also known as ITAM or ITSM, involves tracking and maintaining an organization's technology assets throughout their lifecycle.

It accounts for creating an up-to-date inventory detailing the number of assets—like software applications, licenses, and related contracts—available.

ITAM oversees the efficient deployment of these assets. Like software versions, license quantities, assigned users or devices, and contract terms where needed within your company.

It also ensures timely software updates and license renewals to optimize performance, security, and compliance. Lastly, ITAM helps dictate responsibly disposing of or replacing assets once they reach their end-of-life or become obsolete.

Why Is It Important To Manage IT Assets?

Managing your organization’s IT assets, such as app stacks, licenses, related contracts, etc., is critical for operational efficiency and cost optimization.

As your business grows, you will accumulate more hardware, software, and network equipment. These assets will become difficult to track without proper visibility, which could lead to inefficient usage, security vulnerabilities, and compliance issues.

Implementing a good IT asset management strategy helps you maintain control over your assets. You can account for all assets, monitor their performance, see where they are used, and plan for timely upgrades or replacements.

What Are the Three Main Deliverables of IT Asset Management?

The three main deliverables of IT asset management are asset inventory, lifecycle management, and cost optimization.

1. Asset inventory: Asset inventory involves creating and maintaining an up-to-date record of all your IT assets. This includes software applications installed across your organization, licenses owned, licensing contracts with vendors, etc.

A comprehensive inventory will empower you to track and account for every piece of hardware, software, and network component within your organization.

2. Lifecycle management: Lifecycle management helps ensure you properly deploy, maintain, and ultimately retire or dispose of IT assets. You can plan for software updates, contract terms, and end-of-life procedures.

With good lifecycle management, you will maximize asset performance and mitigate security risks from outdated assets.

3. Cost optimization: Cost optimization lets you make better decisions about IT investments.

With visibility into asset usage, performance, and expenses, you will effectively identify underutilized resources, negotiate better contracts, and allocate budgets.

How Does an IT Asset Management Process Work?

The IT asset management process typically follows a cyclical approach to oversee your IT assets effectively.

First, you establish an asset inventory by discovering and cataloging your organization's software applications, licenses, and vendor contracts.

Next, you implement procedures for asset procurement and deployment. Whenever new IT assets are acquired, you log them into the inventory and assign them to appropriate teams or employees based on business needs.

You monitor assets' performance, apply necessary updates and maintenance, and track associated costs as they are used. It is vital to keep accurate records, as this will ensure regulatory compliance and anticipate when you will need replacements.

Once assets reach their end-of-life or become obsolete, you initiate disposal procedures. Depending on the type of asset, this could be data sanitization, proper e-waste recycling, or secure destruction.

Simultaneously, you need to assess whether replacements are warranted based on growing business needs.

Good IT asset management software like CloudEagle gives you centralized visibility and control throughout this cyclical process. You can generate reports, set automated alerts, and analyze asset data to optimize utilization and spending.

Key Components of ITAM

Below are the main components that must be present in an effective ITAM:

1. Asset Discovery and Inventory

You have to establish a comprehensive IT asset inventory. This inventory is the foundation of effective asset management.

You begin by discovering all assets across your organization, including all software applications, licenses, and vendor contracts.

Compile details like software name, version, license type, quantities, assigned users/devices, purchase dates, and contract terms.

Maintaining an accurate and up-to-date inventory helps you track asset performance, plan upgrades or replacements, and ensure regulatory compliance.

Moreover, it gives you visibility into asset usage, enabling you to optimize resources and eliminate wasteful spending on underutilized or redundant technologies.

2. Lifecycle Management

Proper lifecycle management is critical for maximizing the value of your IT assets. It involves implementing structured processes for asset acquisition, deployment, maintenance, upgrades, and eventual disposal or replacement.

During the procurement phase, you assess business needs, evaluate options, and make the best purchasing decisions that align with your organization's goals and budget.

Once assets are acquired, you establish protocols for efficient deployment to the appropriate teams or users.

You also schedule regular maintenance activities like software updates, hardware cleaning, and performance monitoring to extend asset longevity and mitigate security risks.

As assets approach their end-of-life, you initiate upgrade or disposal procedures to maintain operational efficiency and compliance.

3. License Management

License management is a crucial component in ITAM, particularly for software assets. Your organization must maintain accurate records of all software licenses it owns, including license types, quantities, expiration dates, and assigned users or devices.

A good license management strategy helps you monitor software usage, ensure compliance with license agreements, and avoid penalties for under-licensing or over-licensing.

Additionally, it helps you optimize software spending by identifying underutilized licenses that can be reassigned or consolidated, thereby reducing costs and maximizing your investments.

An ITAM software will enable you to reclaim unused licenses based on usage insights and harvest them. You can assign the harvested licenses to new users, ensuring optimal resource allocation and ROI.

4. Contract Management and Cost Optimization

Effective ITAM involves managing contracts and optimizing costs associated with technology investments.

You should maintain a centralized repository of all vendor contracts, including contract terms, renewal dates, and payment schedules. This approach helps you negotiate favorable contracts, avoid automatic renewals, and identify opportunities for cost savings.

When you analyze asset utilization data, you will be able to identify underused or redundant hardware and software. This discovery will allow you to consolidate or decommission unnecessary assets during renewal negotiations, ultimately optimizing IT costs.

Overlooked contract management led to various challenges for Aira, including missed renewals and lost contracts as they tracked them using spreadsheets.

Here’s how CloudEagle helped Aira centralize contract management and ensure they stayed ahead of renewals.

5. Security Management

Integrating IT asset management with security protocols is essential to safeguard your organization's data and systems.

You should establish processes to ensure all assets, particularly those containing sensitive information or accessing critical systems, are appropriately secured throughout their lifecycle.

This includes enforcing security policies during asset procurement, deployment, and maintenance phases. Additionally, you have to implement procedures for secure data sanitization or destruction during asset disposal.

You can quickly identify and address potential security vulnerabilities by maintaining accurate asset inventories and tracking asset locations and assignments.

Timely software and firmware updates also help mitigate risks of cyber threats targeting outdated or unpatched systems.

Benefits of IT Asset Management

Increased Efficiency

Implementing a good IT asset management strategy helps streamline many processes, boosting overall organizational efficiency.

Automated asset discovery and inventory tools like CloudEagle expedite identifying and tracking all technology assets, saving time and effort compared to manual methods.

Standardized deployment procedures ensure new assets are swiftly provisioned to the appropriate teams or users based on business needs.

Consolidated asset information facilitates efficient maintenance and upgrade scheduling, minimizing downtime. Optimized ITAM processes help reduce administrative overhead, allowing IT staff to focus on more strategic initiatives.

Improved Cost Management

IT asset management provides valuable insights into your IT investments, ensuring you get effective cost optimization.

By maintaining accurate software license records, you can identify and harvest underutilized or redundant licenses for potential reassignment or consolidation. This helps eliminate unnecessary licensing costs while ensuring compliance.

Image showing ideal procuirement process

ITAM tool's capabilities help facilitate informed procurement decisions by analyzing asset performance and forecasting replacement needs. Consequently, you can avoid overspending on assets that exceed your requirements while allocating budgets strategically.

Enhanced Security

Incorporating security protocols into your IT asset management practices significantly mitigates risk exposure.

Good SAM software like CloudEagle allows you to track asset vulnerabilities, ensuring timely software patching and firmware updates to address potential threats.

Maintaining detailed asset inventories and assignment records enables swift identification and remediation of compromised systems.

Proper asset disposal procedures, including data sanitization and secure destruction, prevent sensitive information from falling into the wrong hands.

Integrating ITAM with your security framework ultimately strengthens your overall cybersecurity posture and helps safeguard your organization's data and systems.

Boosted Regulatory Compliance

Effective IT asset management is crucial to ensure adherence to different regulatory standards and licensing agreements.

By accurately tracking software licenses and usage, you can demonstrate compliance during audits and avoid potential fines or penalties. Additionally, ITAM practices support data privacy regulations by implementing secure data handling and disposal protocols.

Maintaining comprehensive asset records also facilitates compliance with industry-specific regulations, such as those governing healthcare or financial institutions.

Robust ITAM processes help minimize non-compliance risk and protect your organization's reputation.

Better Decision Making

IT asset management provides valuable insights into your IT infrastructure, enabling you to make data-driven decisions.

Detailed asset inventories and utilization data offer resource allocation visibility, helping you identify underutilized or redundant assets.

ITAM tools like CloudEagle help generate reports and analytics that inform strategic planning, budgeting, and procurement decisions.

Based on real-time data, you can forecast replacement needs, evaluate new technology investments, and optimize asset lifecycle management.

So, leveraging ITAM data empowers you to make the best choices that align your technology assets with business objectives while maximizing returns.

Conclusion

Today's business sector is technology-driven, and effective IT asset management is necessary to optimize investments and mitigate risks.

If you implement a comprehensive ITAM strategy, you will gain complete visibility and control over your hardware, software, and network assets throughout their lifecycle.

This approach enables you to boost efficiency, reduce costs, enhance security, ensure compliance, and make data-driven decisions.

Don't let your IT assets go unmanaged. Explore IT asset management solutions like CloudEagle to govern, optimize, and renew your IT assets and increase ROI.

Book a demo today to discover how a SaaS management and procurement platform can help streamline your asset management processes, delivering tangible benefits to your bottom line.

Frequently Asked Questions

1. What is an example of an IT asset?

An example of an IT asset is a laptop computer you or your employees use for work. Other common IT assets include desktop computers, servers, printers, and software applications, including SaaS.

2. Who manages IT assets in a company?

IT assets are typically managed by a company's IT department or IT asset manager.

3. What are the areas of IT asset management?

The critical areas of IT asset management include asset inventory, lifecycle management, license management, contract management, cost optimization, and security management for all your organization's assets.

Written by
Prasanna Naik
Co-founder, CloudEagle
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