Presentation is loading. Please wait.

Presentation is loading. Please wait.

IT ASSET MANAGEMENT (From Booz-Allen & Hamilton).

Similar presentations


Presentation on theme: "IT ASSET MANAGEMENT (From Booz-Allen & Hamilton)."— Presentation transcript:

1 IT ASSET MANAGEMENT (From Booz-Allen & Hamilton)

2 PERSPECTIVE ON ASSET MANAGEMENT What are the management issues and challenges we see at large multinationals? What is an asset management capability? –What are the best practices? –What benefits have been achieved through improved asset management capabilities? What steps do companies take to implement improved asset management capabilities?

3 ASSET MANAGEMENT ENCOMPASSES THE PROCESSES OF PLANNING, PROCURING AND MANAGING HARDWARE, SOFTWARE AND SERVICES Acquisition Planning For Hardware, Software and Services Supplier and Contract Management Procurement Inventory Management ASSET MANAGEMENT PROCESS

4 ASSET MANAGEMENT PROVIDES THE FOUNDATION TO OPTIMIZE THE RESOURCES OF THE BUSINESS Control over the infrastructure provides the ability to plan ahead –Capacity -- How many assets are installed? How many more do we need? –Ownership -- Where are the assets located? Can we cascade to reduce excess capacity? –Capability -- What assets will be required to support the critical business applications? Asset management standards minimize complexity in the infrastructure –Higher service levels due to a controlled number of software packages and hardware configurations –Reduced inventory of non-standard equipment Expertise can be focused on high priority business objectives rather than supporting non-standard applications and configurations

5 POOR ASSET MANAGEMENT PROCESSES WILL LEAD TO HIGH COSTS IN THE BUSINESS Extra Capacity -- especially in distributed computing –Extra desktops: hardware and software –Excess network bandwidth –Server capacity Increased fixed costs reduce financial flexibility –Long Contract Terms -- especially in dynamic services areas, e.g., telecommunication, desktop services Insufficient consideration of “total cost of ownership” –Upfront hardware costs are usually key priority –More attention should be given to standards and reduction of ongoing support costs –Decide the right level of maintenance service required to support the business

6 FINALLY, POOR ASSET MANAGEMENT CAN IMPACT AN ORGANIZATION’S ABILITY TO RESPOND EFFECTIVELY TO BUSINESS REQUIREMENTS “Just-in-time” Justification: Infrastructure and assets often justified on a project by project basis –Affects the economics of the project –Slows down the process of acquiring new equipment to meet a business need –May lead to the lowest-priced hardware solution, even if it is non-standard Planning: Often reactive following ad hoc, last minute capacity and functionality requirements to deliver new solutions

7 THE NEXT SLIDES WILL DEMONSTRATE THE APPROACH USING PROVEN CASE STUDIES AND BEST PRACTICES Summarize key case studies Demonstrate the key economic drivers and models Present current Best Practices and capabilities in the marketplace –Tools –Outsourcing services

8 BEST PRACTICES FOR EACH OF THE ASSET MANAGEMENT PROCESSES PROVIDE GUIDELINES FOR BUILDING NEW CAPABILITIES Acquisition Planning For Hardware, Software and Services Supplier and Contract Management Procurement Inventory Management ASSET MANAGEMENT PROCESS BEST PRACTICES Minimized ad-hoc requests Managed IS user demand Standardized hardware and software configurations Forecasts of user demand Requirements base planning Business driven requirements only Minimized number of suppliers Maximized service component for products and services Purchase only “right” hardware/ software Achieve economies of scale through consolidation Minimize purchasing admini- strative costs Minimized excess assets Manage equipment effectively Maximized life of assets Includes installation and disposition

9 THESE BEST PRACTICES ARE USED TO IDENTIFY GAPS IN CURRENT CAPABILITIES

10 See Overhead Slide

11 INFRASTRUCTURE STANDARDIZATION REDUCES “TOTAL COSTS” BY ENABLING HIGHER SUPPORT RATIOS STANDARDIZATION IMPACT ON SUPPORT RATIO (Greater Than 2000 Users)  40% ABC (at 40% standard) 41 - 69%  70% % Standardization I/S Productivity (Average Support Ratio*) Low Standardization leads to low productivity Note: Support Ratio = (No. of I/S Users) / (No. of I/S FTE’s) Source: Interviews, Surveys, BA&H Analysis EXAMPLE

12 INFRASTRUCTURE STANDARDIZATION IS KEY TO DELIVERING I/T SERVICES MORE ECONOMICALLY PRODUCTIVITY (Greater Than 2000 Users) SERVICE COSTS (Greater Than 2000 Users) I/S PRODUCTIVITY (Average Support Ratio)  40% 41-69%  70% AVERAGE I/S SUPPORT COST  17% 18-25 26-33  34 % STANDARDIZED SUPPORT RATIO A “Common” Standard Infrastructure Improves Service Productivity Higher Productivity Results in Lower Service Costs Note: Support Ratio = (No. of I/S Users) / (No. of I/S FTE’s) Source: Interviews, Surveys, BA&H Analysis CASE STUDY

13 STRATEGIC SOURCING PROVIDES OPPORTUNITIES FOR COST SAVINGS BY MINIMIZNG THE NUMBER OF SUPPLIERS

14 LAPTOP COST COMPARISON Purchase vs. Lease DESKTOP COST COMPARISON Purchase vs. Lease Leasing is more cost effective Leasing is more cost effective for refresh periods less than 4 years COST (NPV) 2 Years 3 Years2 Years 3 Years 4 Years5 Years REFRESH PERIOD Lease Purchase

15 PROCUREMENT BEST PRACTICES PROVIDE THE OPPORTUNITY TO SELECT THE “RIGHT” HARDWARE AND SOFTWARE TO SUPPORT BUSINESS REQUIREMENTS DESKTOPLAPTOP Cost Per Seat $2,800 $3,800 0%20% 40%60%80%100% Total Cost (per 1000 users) % Laptop Desktop/Laptop Cost ComparisonTotal Cost Impact of Laptop Mix CASE STUDY

16 PURCHASE VERSUS LEASE ALTERNATIVES MAY PROVIDE FINANCIAL OR OTHER BENEFITS

17 A SHARED SERVICES ORGANIZATION LEVERAGES IMPROVED PROCESSES, STANDARDS, AND ORGANIZATIONAL CHANGES TO ACHIEVE ECONOMIES OF SCALE SCALE CURVE FOR I/S COSTS Cumulative Company A Group B Group A Group C Group D I/S cost-curve 1001,00010,000100,000 No. of I/S Users (Log Scale) Source: Interviews, surveys, BA&H analysis I/S Cost/ User Economies of scale are achieved through a shared service organization

18 A STRUCTURED APPROACH CAN BE USED TO IMPROVE ASSET MANAGEMENT CAPABILITIES I. What is the Business Case? II. What are the Asset Management Capabilities? III. How to Implement These Capabilities? Financial Tools and Models Process Model and Tools Organizational Model Internal External Partners Technical Tools Baseline current “total” cost structure Define Business Unit service requirements High-level benchmarking Identify gaps and benefit opportunities - Service - Cost - Capability Architecture Standards Best Practices Leveraging Price - Performance ASSET MANAGEMENT APPROACH

19 HIGH-LEVEL BENCHMARKS DESKTOP EXAMPLE

20 THE BUSINESS CASE DEFINITION VALIDATES IMPROVEMENT OPPORTUNITY AREAS IN ASSET MANAGEMENT Develop a baseline of the “total” cost for asset management –Quantify “total” costs -- hardware, software, maintenance, procurement, help desk/support, installation, and other asset management costs –Include business unit and geographic specific costs –Identify key levers -- asset ratios, refresh rates, etc… Utilize high-level benchmarks to identify the opportunities –Define and utilize analytics to be used to evaluate the current processes –Compare the baseline with the benchmarks to identify the gaps with best practices Identify and quantify the benefits that can be obtained through an improved asset management capacity Define key levers and controls that can be used to manage the process improvement

21 NEW ASSET MANAGEMENT CAPABILITIES MUST BE ALIGNED WITH BUSINESS IMPERATIVES, ARCHITECTURE AND STANDARDS, AND BEST PRACTICES Business Objectives and Priorities Architecture and Standards Best Practices New Asset Management Capabilities Identify new capabilities required by the business Prioritize initiatives based on business priorities Quantify capacity and functionality requirements Align architecture and standards with business objectives Define new capacity targets Design new architectural changes Review list of standards Apply best practice to improve the process Define standards and measures to control compliance and process improvement BUILDING NEW ASSET MANAGEMENT CAPABILITIES

22 CAPABILITY GAPS CAN BE IDENTIFIED USING TOOLS AND MODELS Approach … Implementing Capabilities...

23 ONCE THE CAPABILITY GAPS ARE IDENTIFIED, AN EVALUATION CAN BE COMPLETED TO DETERMINE WHETHER TO OUTSOURCE OR INTERNALLY SUPPORT THE SERVICES A SCORECARD PROVIDES THE ABILITY TO CONTROL AND ENSURE THE ONGOING IMPROVEMENT Approach … Ongoing Improvement...


Download ppt "IT ASSET MANAGEMENT (From Booz-Allen & Hamilton)."

Similar presentations


Ads by Google