Unit 5 IT Asset Management PDF

Management Information System – LLC 3215 UNIT 5 IT ASSET MANAGEMENT Unit Structure 5.0 Overview 5.1 Learning Outcomes 5.2 Introduction 5.3 IT Asset Management 5.4 Why use Asset Management Systems? 5.5 Calculating Total Cost of Ownership 5.6 Rent or Buil...

Management Information System – LLC 3215 UNIT 5 IT ASSET MANAGEMENT Unit Structure 5.0 Overview 5.1 Learning Outcomes 5.2 Introduction 5.3 IT Asset Management 5.4 Why use Asset Management Systems? 5.5 Calculating Total Cost of Ownership 5.6 Rent or Build Decision 5.6.1 Application Service Provider (ASP) 5.6.2 Storage Service Provider (SSP) 5.6.3 Management Service Provider 5.6.4 Business Continuity Service Provider 5.7 Managing Hardware 5.7.1 Managing Enterprise Networks 5.7.2 The Telecommunication Plan 5.7.2.1 Implementing the Plan 5.8 Managing Software 5.9 Activities 5.10 Discussion Questions 5.11 Summary 5.0 OVERVIEW In Units 1 and 2, we have seen how businesses can use information systems as a tool for better decision-making at the different levels of management. In Unit 3, we have seen the importance of setting up IT strategies when firms want to opt for new IT tools. A pool of Information Technology tools will be used by an organisation to meet its goals. This implies that organisations need to properly manage its hardware and software to ensure the smooth flow of Unit 5 1  Management Information System – LLC 3215 operations. In this unit, we shall see how IT Asset Management can be used in organisations to guarantee the most optimal use of hardware and software assets. 5.1 LEARNING OUTCOMES By the end of this unit, you should be able to do the following: 1. Define IT Asset Management. 2. Identify the importance of IT Management Asset. 3. Describe why companies use IT Asset Management Systems. 4. Clearly describe the main issues which should be considered when managing hardware and software assets. 5. Determine the elements taken in consideration when calculating the Total Cost Of Ownership. 6. Identify the different types of service providers available for renting technology assets. 7. Identify the different types of hardware and software to be managed. 5.2 INTRODUCTION All businesses now have a minimum of IT tools to assist them in their daily work; whether it is a stand-alone PC equipped with simple office automation features or large enterprise systems which encompass different business processes across different countries and require robust network and high bandwidth to operate smoothly. Irrespective of the size of the company, the IT assets - hardware and software - of the organisation need to be managed as they are crucial for the smooth running of the business. In some cases, businesses would be paralysed if their IT resources stop functioning. Just think about the consequences for a bank if the main server goes down. Unit 5 2  Management Information System – LLC 3215 5.3 IT ASSET MANAGEMENT “IT Asset Management refers to any set of processes and procedures that help an organisation keep track of its technology resources.” In simpler terms, IT Asset Management can be seen as the inventory control of hardware and software. Asset Management can help  a business determine how its staff uses technology efficiently in order to perform business transactions,  to standardise processes,  in better decision-making. There are different types of IT Asset Management Systems that exist to help firms manage their IT resources. A small company could simply use a spreadsheet to manage the list of its IT resources and their respective details in terms of their vendors, costs, date of purchase, license agreements, support provided etc. Big companies could opt for more specialised IT Asset Management Systems. Two free products that have strong Asset Management features are TechAtlas and Spiceworks. It should be noted that IT Asset Management should be a continuous process and not a one-time event. IT tools keep on changing and should be monitored continuously. When a new hardware is bought, careful analysis should be done to ensure that it can be integrated with the existing infrastructure. Similarly, the same principle should apply for the purchase of software. Careful planning is required to ensure compatibility with existing systems. Unit 5 3  Management Information System – LLC 3215 5.4 WHY USE ASSET MANAGEMENT SYSTEMS? Organisations can make use of Asset Management Systems to save time and money, to ensure that proper licensing is available for their software and to check the usefulness of their IT equipment. “IT asset management also can free up time spent on IT planning, approvals, negotiations and procurement, and refocus enterprise efforts on IT's peak functionality.” Some of the reasons for using IT Asset Management Systems are described below: 1. It helps to negotiate with software vendors. Using Asset Management Tools, businesses can evaluate which software is running on which PC and also the number of users using a particular software in a given period. For example, if a company has 100 licenses for Adobe Photoshop but only 20 users are using this software, then it might re-negotiate its contract with the software vendor. 2. It helps to save time and money. Automated IT Asset Management tools can be used to quickly assess the usage of IT resources; that is, which resources are being used or not. Effective usage of resources is very important to the company as it affects cost. Moreover, Asset Management tools allow businesses to evaluate the Return On Investment (ROI) before spending money on IT equipment. 3. It avoids software non-compliance audits. “A recent study found that the majority of the IT professionals surveyed weren’t sure if their software is in compliance with licensing requirements” Unit 5 4  Management Information System – LLC 3215 “A recent survey by King Research revealed that 60 percent of IT executives and managers believe they have unlicensed software deployed and 73 percent of that same group responded that they are not prepared for a software audit.” Asset Managements systems can help businesses to easily trace unlicensed software installation. Further Readings You can check the following websites to have more insight on the importance of IT Asset Management: IT Asset Management for Software Compliance: http://technology.inc.com/managing/articles/200809/asset.html Why IT Asset Management is Important Now: http://www.gartner.com/DisplayDocument?ref=g_search&id=450910 Unit 5 5  Management Information System – LLC 3215 5.5 CALCULATING TOTAL COST OF OWNERSHIP If companies want to benefit from the advantages of Information Technology and achieve competitive advantage, they should first invest in the related IT tools. The Total Cost of Ownership (TCO) is usually calculated to determine the cost associated with the use of Information Technology. Table 5.1 lists some of the factors used to calculate the TCO for an organisation. It should be noted that the TCO does not include the cost associated with the purchase of hardware and software only. Hardware and software count as a minor percentage only. Most of the costs are associated with training, maintenance and so on, as shown in Table 5.1. Cost Description Hardware acquisition The costs of all IT equipment like PCs, servers, cabling etc Software acquisition Cost of all programs like application software, system software, communication software, enterprise software, etc. Installation Cost related to the installation of hardware and software Training Cost associated with the training of staff so that they can operate the new system. Support Cost associated in providing help to end-users Maintenance Cost associated with on-going maintenance of the system to ensure smooth business transactions Infrastructure Cost related to the setting up of the infrastructure Downtime Cost related to the loss of the business as a result of power cuts, server failures, etc Space & Energy Rent of Buildings, offices and cost for Air conditioning facilities, electricity etc Table 5.1: Factors used for calculating TCO Unit 5 6  Management Information System – LLC 3215 5.6 RENT OR BUILD DECISION Instead of owning and maintaining their own technology assets, some organisations may prefer to lease these services from external technology service providers. There might be a number of reasons why some companies decide to hire these services, as listed below: 1. No support is available in-house to maintain these services. 2. The organisation is not willing to invest in new technology assets. 3. The organisation does not want to maintain these tools. 4. Specialists are not available in-house to be able to run/maintain these technologies. 5. The organisation does not want to recruit new staff to be able to use these technology assets. 6. The technology tools that the organisation wants to use are too expensive and the company cannot afford them. You will get a better understanding of these reasons in Unit 11 where we will explore Outsourcing and its different aspects. There are different types of service providers who offer lease facilities for technology assets. Some of these Service Providers will now be discussed. 5.6.1 Application Service Provider (ASP) Application Service Providers (ASP) offer facilities for organisations to use application software on a subscription basis or transaction basis through secured networks. ASPs provide support for the whole array of infrastructure needed to use a particular software or a set of software. Instead of buying, installing and maintaining these software, companies can rent these services from ASPs. Moreover, companies benefit from the fact that they do not have to maintain these software and also do not have to go to different vendors for the array of technologies they need. Unit 5 7  Management Information System – LLC 3215 The concept of SaaS is becoming more and more popular. “Software as a Service” (SaaS)—meaning delivering software over the Internet—is increasingly popular for its ability to simplify deployment and reduce customer acquisition costs; it also allows developers to support many customers with a single version of a product. SaaS is also often associated with a "pay as you go" subscription licensing model.” Further Reading You can refer to the following website for more information on SaaS: http://www.microsoft.com/serviceproviders/saas/default.mspx 5.6.2 Storage Service Provider (SSP) Owning and maintaining storage can be complex and costly and requires qualified personnel to be able to monitor these storage facilities. If companies do not want to cater for all these problems related to owning and maintaining storage, they can opt for the services of SSPs. SSPs offer storage facilities for companies over networks. SSPs should provide high availability and reliability. They should ensure that the required performance level is always available to their customers and that security measures provided are reliable. By using the services of SSPs, companies are free from monitoring stored data, managing capacity of their database servers, and verifying response time and reliability. Unit 5 8  Management Information System – LLC 3215 5.6.3 Management Service Provider Management Service Providers combine the facilities offered by ASPs and SSPs as well as providing facilities for website management and systems performance monitoring over the Internet. 5.6.4 Business Continuity Service Provider Business Continuity Service Providers define and document guidelines for planning and recovering from system malfunctions and disasters that threaten vital business operations. They also offer disaster recovery and Web availability services to help firms continue essential business processes in case of disasters. Further Readings You can check the following websites to find more detail about Service Providers: - www.wikipedia.org - http://www.microsoft.com/serviceproviders/default.mspx - http://www.cisco.com/en/US/netsol/ns341/networking_solutions_service_provider_home.html Unit 5 9  Management Information System – LLC 3215 5.7 MANAGING HARDWARE New ways of doing businesses, e.g. E-business and E-commerce, are placing heavy demands in IT resources of a company. Higher processing and storage facilities are required to cater for the increased flow of data and transactions. Moreover, the type of data which are now being communicated, like audio, video and multimedia data, require a lot of power in terms of processing speed and bandwidth capabilities. Two main factors which should be taken into account when buying hardware are capacity planning and scalability. These two important factors are explained below :  Capacity Planning is the process of predicting when a computer hardware system becomes saturated. It ensures that the firm has enough computing power for its current and future needs. It takes into account the maximum number of users that the system can accommodate at one time, the impact of existing and future software applications and performance measures such as minimum response time for processing business transactions. Although capacity planning is performed by specialists, input from the business is essential to ensure that we have acceptable levels of response time and availability. Further Readings You can refer to the following website for more information on Capacity Planning: it presents an Article on how Cloud Computing uses Capacity Planning in the enterprise: http://searchdatacenter.techtarget.com/sDefinition/0,,sid80_gci1082579,00.html  Scalability refers to the ability of a computer, product or system to expand to serve a large number of users without breaking down. For example, E-commerce and E-business need scalable IT infrastructures that have the capacity to grow with the business as the size of a website and the number of visitors increase. Organisations must make sure that they have sufficient computer processing, storage, and network resources to handle surging volumes of digital transactions and to make such data immediately available online. Unit 5 10  Management Information System – LLC 3215 Further Readings You can refer to www.searchdata.com for more information on Scalability. 5.7.1 Managing Enterprise Networks With globalisation and the expansion of businesses across different locations, a new challenge has crop up for organisations: that of managing enterprise networks. Irrespective of the location at which a particular department or branch is found, business transactions should be able to proceed smoothly. Communication should flow seamlessly from one part of the organisation to the other. Exercise 1 Try to find out some problems associated with Enterprise Networks and fill the Table 5.2 below: Problem Description Table 5.2: Problems associated with Enterprise Networks Unit 5 11  Management Information System – LLC 3215 5.7.2 The Telecommunications Plan There should be a proper telecommunications plan which states how technology can enhance business operations, increase competitiveness and meet customers' demand. Approaching enterprise networking haphazardly will cost you time and money. The telecommunications plan should include the following items: 1. An inventory of the business’ current equipment, current processes, and current needs should be made. 2. The current state of the business should be determined. 3. The organisation should investigate on the opportunities that will be made available from networking technologies. 4. The plan should be able to integrate with the overall business plan and state how it meets business needs. 5. The plan should state how telecommunications can be used to enhance the current state and business processes of the organisation and how it can bring additional value to the organisation Implementing the Plan When the telecommunications plan has been formalised, it has to be implemented. This will include the following steps:  Determine the necessary topology: LAN, WAN, VAN, or Network Services;  Determine the type of services offered: voice mail, email, teleconferencing, data conferencing;  Determine the type and level of security: private lines, dedicated leased lines, public lines;  Determine the accessibility: multiple access for a thousand workers or limited access for a small number;  Determine the utilisation: high-frequency, high-volume, low-frequency, low-volume; Unit 5 12  Management Information System – LLC 3215  Determine the cost: include development, operations, maintenance, expansion, and overhead;  Determine the installation difficulties: transmission media, hardware, software, and persware;  Determine the connectivity standards: getting all the pieces to work together. Further Reading An example of a strategic communication plan can be found at: http://columbus.in.gov/pdf/tac/2006-04- 18_Comprehensive_Strategic_Telecommunication_Plan_for_Columbus_IN_-_APPROVED.pdf It is of utmost importance to properly plan and manage hardware in an organisation to avoid disastrous effects in the future. 5.8 MANAGING SOFTWARE Software Asset Management, also known as SAM or Software License Management, allows firms to manage and maintain their software. Some of the features of Software Asset Management include:  managing of software upgrades,  installation of new software,  managing copyrights,  managing licenses of software.  managing deployment of software  managing purchase, utilisation and disposal of software. Different types of software have to be managed in a company and there might be different issues which crop up while managing these software. Some software will be run stand-alone; others will operate in simple LANs; and yet others will operate in WANs. Unit 3 provides a brief description of application software and system software. Table 5.3 provides a list of some of the different types of software together with their related management issues: Unit 5 13  Management Information System – LLC 3215 Software Management Issue Operating systems (OS) Is the OS stable? Does it provide security for different users? What are the networking facilities provided? Application software Does it provide options to support the required functionality? Can it be customisable? Is it user-friendly? Programming software Can the tools be easily used by ordinary programmers? Does it provide necessary options and help tools to create a good software? Do it provide support? Do we have enough resources from the Net? Communication software Does it provide options for security? Does it have options for compressing data before it is transmitted? Enterprise software How do we cater for version upgrades? Is support provided by vendors? Table 5.3: Management Issues for Different Types of Software Unit 5 14  Management Information System – LLC 3215 5.9 ACTIVITIES A. True/False Questions True False 1. IT Asset Management involves the management of hardware only. 2. TCO involves the cost of hardware and software only. 3. An application service provider provides online access over networks to storage devices and storage area network technology. 4. Small companies should not use IT Asset Management tools as it is a waste of time and money. 5. The factors used to manage software are the same irrespective of the type of software to be managed. B. SAMPLE TEST/EXAM TYPE QUESTIONS Question 1 The business of ZYX Ltd, dealing in textiles and fabrics, has been flourishing rapidly for the last three years. This has resulted in huge amounts of data in its database. The company often faces problems with the management of its database. The prime concerns have been security of its data as well as performance and reliability. (a) The company does not have the necessary infrastructure to support the new volume of transactions nor does it want to employ specialists in the field. Advise ZYX ltd how this problem could be solved. [5 marks] (b) According to you, what are the issues should be addressed by ZYX Ltd before recommending the use of the Internet within the company? [5 marks] Unit 5 15  Management Information System – LLC 3215 Question 2 A model can be defined as an abstract of a real system, which permits the exploration of the behaviour of the system under various circumstances. For decision making, managers may prefer using a model rather than experimenting with the real (physical) system itself. Give four reasons that justify such a decision. [4 marks] Question 3 “Online auction services such as eBay.com offer a form of re-intermediation through their Web sites to get buyers and sellers connected”. Explain what is meant by re-intermediation. http://www.ianywhere.com/avantgo/uk/case_studies.html [2 marks] 5.10 DISCUSSION QUESTIONS 1. Find out companies which provide support for Application Service providers and Storage Service Providers in Mauritius. 2. Find examples of each type of software mentioned in Table 5.2 and describe how each of these software would be used in an organisation. 3. Section 5.8 provides some of the features related to Software Asset Management. Try to explain each of these features and find out other features of Software Asset Management from the internet. 4. Find out how the law prevents illegal copying of software in Mauritius. Unit 5 16  Management Information System – LLC 3215 5.11 SUMMARY The focus on this unit has been on the issues related to the management of hardware and software in an organisation. The importance of IT Asset Management Systems in organisations has been defined. Moreover, the different factors taken into account when calculating the Total Cost of Ownership have been explained. Some organisations prefer to rent software or storage services from third parties instead of buying the same. We covered these aspects in this unit. Finally, the last two sections are reserved for discussing issues related to managing different types of hardware and software in an organisation. Unit 5 17