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The Business Case for IT Asset Management White Paper

Uncovering the Potential Value of IT Asset Management

Companies of all sizes and across all industries are seeking to reduce total cost of ownership (TCO) for the numerous components that exist within their IT environments. In a report titled “Winning Asset Strategies”, industry analyst firm Gartner predicts that “Enterprises that systematically manage the life cycle of their IT assets will reduce cost per asset by as much as 30 percent during the first year, and between 5 percent and 10 percent [of additional savings] annually during the next five years.”

Yet, the International Association of IT Asset Managers believes that, “with very few exceptions, ITAM projects get started without thought of how to identify, and systematically report, hard dollar cost takeout.”. Where do these significant savings come from?

Reduced System Support Costs

ITAM solutions help organizations take the first significant step towards reducing IT cost of ownership by minimizing the burden of system support. For example, ITAM shortens the length of calls to helpdesks by making it easier for support staff to identify each PC configuration. At the same time, it eliminates the time helpdesk workers spend troubleshooting, fixing, and maintaining unauthorized software and related licenses.

Specific yearly savings can be calculated using the following formula:

Number of PCs	X	Average number of	X	Cost per ticket	X	% reduction
		annual support tickets				in average call
		per PC				length

Users of ITAM have reported that their solutions have enabled them to reduce the time spent by helpdesk staff on support tickets by an average of twenty percent. For a company with 500 PCs, averaging 4 helpdesk tickets per PC per year, and assuming a $40 cost per ticket, this can amount to annual savings of $16,000.

Minimized Internal IT Audit Expenses

An ITAM solution can also minimize the expenses associated with IT audits. By automating and accelerating audit-related tasks and activities, ITAM can further reduce TCO as follows:

Number of PCs	X	Time required	X	Hourly cost of	X	Number of audits
		to audit each		IT staff member		performed each
		PC				year

If IT technicians making $33 an hour (according to Salary.com) conduct audits twice each year, and it takes 15 minutes to manually audit each PC, a company with 500 PCs can slash additional $8,250 of yearly costs with an ITAM solution.

Improved Employee Productivity

The use of illegal or unauthorized software such as chat facilities, games, and peer-to-peer file sharing packages often results in loss of employee productivity.

With an ITAM solution in place, companies can eliminate this loss of productivity by monitoring and detecting risks such as illegal software. Expected savings in this area can be calculated with this formula:

Total number	X	Estimated hours	X	% of employees who	X	Average
of employees		spent using		experience downtime		hourly salary
		unauthorized
		software each year

A recent survey by Office Team, one of the largest recruiting and staffing agencies in the US, shows the average worker spends 3 hours each week—an equivalent of 156 hours each year—on non-productive tasks such as playing games, browsing Internet sites that are not job-related, having personal conversations via the company’s email systems, or chatting with friends through IM-style programs. According to a July 2008 survey published by the US Department of Labor’s Bureau of Labor Statistics, the average American worker earns approximately $18 per hour. Even if we make a conservative assumption that only ten percent of the employees will experience productivity loss as a result of such activities, an ITAM solution can save a company with 500 staff members over $140,000 in the form of restored worker productivity and output each year.

Reduced Risks

ITAM solutions can also help companies minimize the financial risks associated with security gaps in their technology architectures. By identifying missing patches, uncovering the absence of an anti-virus software package on certain computers, or detecting the download of a spyware or malware program, IT Asset Management technologies can enhance network protection and minimize the monetary losses that result from security breaches.

Enhanced Software Compliance

Software piracy is a big issue to software vendors, with an estimated $30 billion in lost revenues, according to the Business Software Alliance (BSA). For this reason, software vendors, in conjunction with the BSA, as well as other organizations, are implementing more rigid policies to control piracy and other illegal software use.

In fact, by the end of 2007, around seventy percent of mid- and large-sized businesses had likely been the subject of an external software audit, states Gartner. And, the average fine imposed on non-compliant corporations is about $30,000 for each illegally installed software copy.

With an ITAM solution in place, the IT department has complete visibility into all the applications installed and utilized throughout the organization. With such visibility, the unlicensed or unauthorized software can be detected and removed before an audit occurs. This can result in the following potential cost reductions:

Probability of	X	Number	X	% of PCs with	X	Fine per
audit		of PCs		unlicensed		unlicensed
				apps		app

Many industry experts conservatively estimate that the probability of an external software audit is approximately 15% each year. And, more than one-third of all software programs installed on corporate PCs are likely unauthorized, based on the BSA study cited above. Even if we assume that only 5% of all desktops have at least one unlicensed software package running, a company with 500 PCs can avoid over $112,000 in potential fines by using ITAM software to identify and remove illegally software applications from employee PCs.

Non-Tangible Benefits

While executives want hard numbers before they throw their support behind an ITAM initiative, the less tangible benefits of the solution are too important to ignore. Among the many significant yet hard-to-measure advantages that an IT Asset Management solution can provide are:

The ability to maintain optimal productivity by keeping all mission-critical technologies up-to-date, achieved through increased visibility into which software and hardware components are due for upgrade or replacement
More accurate IT planning and budgeting, through greater insight into what components currently exist, who is using them, how they are being used, and what may be needed in the future
More streamlined IT operations through the identification of redundant or underutilized solutions. This can help reduce the time IT staff spends maintaining duplicate technologies, and ensures that companies achieve rapid return on investment from all of their systems.