Who better than the reseller to keep tabs on the hardware and software within its customers' businesses? Asset management is an ideal job for a reseller, not least because it enables the reseller to point out weaknesses or shortages and supply whatever is necessary to ensure that an up-to-date system is in place.
Software vendors are keen for resellers to perform this role as it makes them reasonably confident that every copy of software is legal, and that illegal duplication is minimal. But even if you don't want to be a policeman for Microsoft, there are plenty of other reasons why you should provide an asset management service.
The first is that it is ongoing. As Infobank technical director Graham Sadd points out: 'Providing an audit is the first stage of asset management, but that is just a snapshot of a situation at one point in time. Continual update of all the hardware and software applications is what's really needed.'
Ironically, asset management is becoming increasingly necessary to client/server technology. When environments were mainframe-based and centrally managed, it was easy for IT managers to determine what was where. But once companies move over to client/server, managing control becomes increasingly difficult.
'Managers often buy hardware and software, partly because the approval process takes too long in many organisations, and will either charge it to their departmental budget or to their expenses. The IT manager has no idea what is running on each desktop,' says Sadd. So resellers which provide a client/server system should also offer asset management as a permanent feature of after sales service.
Another big force creating demand for proper asset management is the Internet. Down-loaded applications need to be registered and licence fees need to paid where appropriate. Legally and financially an enterprise's management needs to know who has what.
The third reason why asset management is crucial is because of the sheer number of IT purchases that companies make. Clive Longbottom, Meta Group senior analyst, says the situation is reaching dangerous levels.
Those companies which have inadequate asset control will be unable to respond to market forces as well as those which do have adequate asset control because the latter will have lower costs to give them an edge.
SQL Systems defines asset management as an extension of systems maintenance, providing an effective - not just efficient - report of IT investment.
Carl Spires, managing director of SQL Systems, says: 'The emphasis must not only be on keeping the asset running, but on defining what the asset is giving the customer and its return for the company.' He says asset management is but a short jump from establishing and measuring return on investment, which is what all boards and directors look for.
Colin Gallick of Utopia Technology Partners agrees that asset management is the thin end of a thick wedge. He says: 'I'm surprised more resellers don't recognise that the owner of a company's IT asset records also owns the account.'
Utopia Technology Partners provides a product which resellers install into a customer site. Gallick says industry standard margins apply to the software, but the real returns are in the services which go around it. He observes that there is an extremely high error rate when companies are left to audit their IT systems manually. 'It usually needs to be done at the weekend so as not to affect the business and is therefore something that firms are often happy to leave to a third party.'
Andrew Dailey of the Gartner Group likens asset management to 'a gorilla hiding in the closet'. He says: 'Companies know there is a need but are afraid to open the door to it.' He says that by allowing hidden costs to pass without challenge companies are secretly feeding the gorilla under the door.
Even so, many firms attach a low priority to asset management. They fail to recognise its importance or fail to see that resellers are ideally placed to provide the service. They risk corporate waste and ruin by ignoring proper asset management, not to mention legal action: it is a statutory requirement for companies to provide a fixed asset register.
It is incumbent on managing directors to ensure that all their software is properly licensed and not illegally copied. By passing the responsibility for asset management to a third party they are taking the right steps in doing so, and are unlikely to be prosecuted if any illegal software is uncovered.
Many companies are desperately in need of asset control, says John Hargreaves, director of fPrint. 'Publicly quoted companies are mismanaging millions of pounds of assets. Our audits on corporates show that the discrepancy between the number of PCs, for example, that senior management claim to have and what they actually own, varies by an average of 20 per cent.
In other words, most companies have 20 per cent more PCs than are accounted for.'
Many board directors fail to recognise that the cost of IT is different from capital outlay, and if that cost is to be reduced there has to be proper asset management. This is particularly the case where there is a changeable workforce which creates high staff turnover and transfer.
In those instances, products are often not upgraded or constantly upgraded, transferred or copied illegally, disposed of, or simply 'walk out the door', without any record of their serial numbers.
Gordon Reilly, chief executive officer with ASI, says that companies and resellers which provide asset management can dramatically reduce the total cost of IT ownership by asking the right questions. 'They should track IT assets from their cradle to their grave and ask how each piece of hardware and software got there, who uses it, whether it is changing, who is having problems with it, and what its salvage value is.'
ASI provides a business strategy application that works with PC network and systems management tools to determine the actual costs and benefits of using and supporting IT assets. The application, Assetpro, acts as a centralised data repository accepting event data from network management and systems management software, help-desks and PC tools. It calculates the cost of each event and permanently stores that information in a relational database.
Lawson Software provides asset management which can be integrated with other software, such as financial software, which UK marketing manager Mandy Downham says is necessary to gain total control and to give a complete picture. The firm offers automated depreciation using recognised methods, in accordance with government regulations. 'Managers need control with flexibility and accuracy,' she says.
Basic asset management products will list purchase dates and upgrade dates, but most companies need more than that. 'Lawson asset management offers multiple asset drill-down, and by selecting an acquisition date range, for example, all products bought within a certain time-frame can be displayed,' says Downham.
A recent report from Spikes Cavell said that users are expected to spend more on systems and asset management, and it is a trend that resellers are encouraged to use to their advantage. Users need a service which either manually or electronically allows them to track their IT purchases and, like a child's immunisation record, alerts them when upgrades or user training are needed. Julie Woods of IBM, which sponsored the research, says that spend on services will cover performance monitoring and other tools, but asset management is a high priority.
Many of the large vendors are developing specialist consultancy services to cater for the need - a sure sign that there is an opportunity for resellers too. Russell Wolak of Olivetti says: 'As the installed base of desktop computers in organisations grows in size and complexity, the structures become less disciplined. Although hardware costs have fallen, the cost of software licences, peripherals, training and support continue to spiral upwards if users purchase indiscriminately and without any form of monitoring.'
Wolak adds that resellers can offer users better value for money from their IT investment by helping them monitor and manage their investment.
Olivetti's version is called Assess IT and is sold through its third parties. It is a way in which resellers can offer asset management services without investing in the skills themselves.
As more users look for one-stop suppliers, adding services like asset management is a natural step for resellers. Customers are becoming more educated and many are able to do their own asset management, but they are also increasingly keen to outsource tedious but necessary tasks, and asset management is one that fits into that category.
As Gallick says: 'A reseller which provides asset management services is the best candidate to tell its clients when products need upgrading due to the release of a new version or because their hardware needs more memory. It is definitely the key to a permanent revenue stream for the reseller which is switched on enough to follow up actively.'
Mike Silvey, vice president of marketing at Sun reseller Micromuse, believes that asset management will be a nightmare until all the vendors provide agent software with their hardware and software products which will report to a central asset management register on changes in the products.
Silvey says that at the moment asset management is either a manual process or conducted electronically by ad hoc PC products, tools and network management products. 'A company wanting asset management needs to have a complete picture, and that includes hubs and routers as well as hardware and software.
The information needs to be delivered automatically to the monitoring software, without intervention by the user. At the moment there is no single product that offers that, and it will not be widely possible until product vendors put in the software which commands a product to automatically report on its status.'
Silvey points out that vendors know their products best and should insert the software agents which inform on upgrades and patches as they happen.
The number of available asset management tools is increasing, but few are able to be fully integrated so they cannot be a whole solution. The perfect product would encompass every single item of hardware and software and automatically report on upgrades, training, depreciation and other facts. The nearest solutions are currently driven by home-grown scripts and often rely on manual updating. 'Any manual system is vulnerable to human error, and it's not possible to buy an off-the-shelf product to monitor a complete IT system because it will not recognise all the elements,' says Silvey.
He says the situation will only change under pressure from users. 'If every customer said they would not buy an upgrade of a product unless it had the necessary software to report itself to an asset management register, then vendors might do something about it, but that's not going to happen.' It is only likely if the Government becomes more Draconian about enforcing asset management within companies.
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