Successful IT Cost Optimization Begins with ITAM
There is a classic scene in the film, Moonstruck where Cosmo Castorini, the patriarch of the family (and plumber), explains why he only uses copper pipe to a just-married couple who are dealing with a broken pipe in their newly-purchased home. It goes like this:
“There are three kinds of pipe. There’s what you have, which is garbage – and you can see where that’s gotten you. There’s bronze, which is pretty good, unless something goes wrong. And something always goes wrong. Then, there’s copper, which is the only pipe I use. It costs money. It costs money because it saves money.”
There is some logic in that reasoning.
An upfront investment of CapEx is perfectly acceptable (nay, encouraged) if it reduces year-over-year OpEx obligations. The COVID-19 crisis impeded many organizations from properly vetting and researching which solutions and providers would provide worthy investments and improvements. Now, though, with the crisis not as urgent, organizations are re-examining how best to optimize and control their budgets and expenditures.
So, the first question that needs to be asked is this…
Where Should Your Organization Begin IT Cost Optimization Efforts?
If the title of this article has not given the answer away, it’s ITAM (Information Technology Asset Management). Of all the service management and delivery initiatives within an IT Department, ITAM best aligns with IT Cost Optimization strategies – maximizing the return on investment (ROI) while minimizing the total cost of ownership (TCO).
Numerous articles from Gartner, Forrester, Info-Tech, and others extoll the benefits of ITAM to ITCO initiatives. Still, there is one factor that gets overlooked…
The cost of entry for a successful ITAM initiative is the lowest of all the other cost optimization targets.
In fact, ITAM threatens to turn poor Cosmo Castorini’s philosophy on his head!
ITAM Costs Nothing Because It Saves Money
In 2017, ISO/IEC updated its ITAM standards. They now describe a three-tiered approach to tracking hardware and software assets within an organization:
1. Optimization: Maximizing the efficiency and cost-effectiveness
2. Lifecycle Integration: Accurately tracking and reporting how assets enter and leave the computing environment
3. Trustworthy Data: Knowing what you have, so you can manage it.
In typical ISO/IEC fashion, they all give you a definition of “trustworthy data” but no good guidance on how to achieve “trustworthy data.” So, how do you go about finding trustworthy data?
Have you ever worked on an ITAM project that suddenly ran into trouble?
If they answer, “No,” – show ‘em the door. ITAM projects always run into trouble!
At what point in the timeline did the trouble begin?
You need folks on your team who sense trouble early before too much damage has been done.
What steps did you take to solve the problem?
By asking about the steps they took to solve a problem, you will uncover whether this is a person who thinks in a logical and ordered manner. They should be able to describe the system they used to root out the issue, step-by-step. If their answer is something like, “I made it up as I went along,” as a member of your time, they will likely miss things and won’t be able to prove to you that they have done a complete and thorough job.
What types of resources did you reach for when you were faced with this problem?
This is one of the most important IT Asset Management interview questions to ask. An ideal team member will do their own research or turn to resources they are already familiar with before asking for help. Now, I’m not advocating never to bring in help, but ideally, you want to fill your team with folks who will exhaust every possibility before asking for it.
These answers will clue you in on whether they love doing research. They’re not afraid of using complex resources that take great focus and patience to get through. If they did all their research on Reddit or Wikipedia, they would not be an effective member of your team.
Do you belong to any professional organizations such as IAITAM?
You want folks who have passion for what they do and feel they are part of a community of like-minded professionals. It’s not a job for them; it’s a profession.
Have you pursued continuing education on your own?
If a candidate takes courses on their own time, it shows they have an insatiable thirst for knowledge. And that’s a good sign.
What kinds of things do you like to read or watch?
Of course, you want a team member who spends some of their free time reading about ITAM, but it’s all they read; it shows a very narrow range of interests. You want folks with wide and varying interests – multi-faceted people who don’t rely on only one source of information.
Interestingly, I’ve discovered that people who love true crime podcasts and series make terrific ITAM team members! They must know how the story unravels and how the layers were pulled back to discover the truth. They absolutely have to find out if their early instincts were correct, and if they have to sit through eight or more episodes to get the answer, they’ll gladly do it.
And that’s how problems get solved in ITAM. Systematically. Step by step.
You want people who won’t stop until they’ve uncovered the problem and how it happened and who will use every resource at their disposal to solve it before calling in outside help. And, if they’re so passionate about the work, they devote some of their own time to hone their skills even better.
How To Find Trustworthy Data
In my book, Rethinking Information Technology Asset Management, I recommend leveraging your inventories from three sources. One source is a given – your “discovery tool.” Every modern asset management service has a discovery tool bundled into which is designed to efficiently scan and harvest the necessary details for the service to function.
For the other two sources, I reach out to the IT Security and IT Service Management teams. In most modern IT departments, the scanning and discovery tools leveraged by IT Security and IT Service Management operate independently of ITAM. Furthermore, since all three toolsets are scanning the same computing, we can use all three to verify the presence of any one asset (at least hardware) in use at any one time.
And even if your organization doesn’t have formal ISO/IEC initiatives, your IT department likely has tools to perform these functions. The result is a dataset that is verifiable, trustworthy, and requires no effort other than to retrieve information from tools your organization has already deployed.
How To Achieve Lifecycle Integration
The next tier — lifecycle Integration — is now achievable by gathering more data about when and how various assets enter and leave your computing environment. Most organizations leave this as a manual process, which, as I argue in my book, is a mistake. Bring in data from your procurement and disposal vendors. ITAM has enough information to automatically know which assets are where in their journey from purchase, inventory, usage, recovery, and disposal.
ITAM Brings Optimization Within Reach
Optimization is now within reach. And nowhere within the previous two phases was mentioned the purchase or integration of a new tool or dedicated system. A sufficiently experienced and motivated ITAM professional should now have all the details necessary to begin cost optimization activities in earnest. It begs the question, just how much optimization can ITAM achieve?
In 2016, Gartner published an article titled “Cut Software Spending Safely With SAM” (ID: G00301780). The article posits IT departments can reduce their software spending by 30% by maturing three key processes:
1. Optimize Software Configurations: Ensure you are not paying extra for the features or services the end-user does not use.
2. Recycle Software Licenses: Identify unused assets and redeploy them quickly as possible.
3. Use SAM Tools: Identify, automate, and expedite as many of the software asset management (SAM) activities as possible.
As cost optimization processes go, these three are pretty standard fare. However, there are two deeper implications. Optimizing your configurations and recycling your licenses work for both software and hardware assets. That means you can realize extra savings beyond the 30% software prediction if your focus expands beyond SAM. This aligns with the expected results of our ISO/IEC efforts discussed earlier (and confirms the ISO/IEC tiered method has merit).
While SAM tools will cost money (especially if you are starting from scratch), those costs can be saved to the very end. Better still, by going through the described ISO/IEC tiered approach and only focusing on hardware optimization, there should be enough savings to imply more can be had by investing in SAM tools. Best of all, I do not know of a SAM tool or service on the market whose implementation costs would come anywhere near 30% of the organization’s software budget.
Is 30-Percent Actually Achievable?
In my 20+ years of experience in the ITAM and SAM space, this closely aligns with my experience. I’ve seen clients reinvest the savings into hardening their cybersecurity efforts, funding service support automation, or updating equipment. I’ve seen others expand the scope to achieve cost optimization savings against SaaS agreements, telecommunication services, data center conversions, and the like.
But these high-profile, high-visibility, and high-impact developments usually cannot begin without a sizable CapEx commitment. ITAM, however, can free up enough OpEx to bootstrap these other initiatives into existence.
ITAM Costs Nothing Because It Saves Money
If you’re unsure of your team’s capability or capacity to do this, or if you’d like an outside perspective, feel free to reach out to me. You’ll find my expertise to be broad and deep.