Organizing Asset Management Today

Organizing IT Asset
Management Today
Malcolm Ryder
Sr. Architect / Virtualization and Service Automation (VSA)
David Messineo
Sr. Architect / Service and Portfolio Management (SPM)
WHITE PAPER | July 2011

2
The Value of IT Assets as Service Resources
EXECUTIVE SUMMARY 3
SECTION 1: 4
Organizing assets
Re-organizing management
The new value chain
SECTION 2: 6
Aligning assets to business
Operations management
Assets as resources
SECTION 3: 10
Business impacts
Value on demand
Management transparency
SECTION 4: 12
Conclusions
SECTION 5: 13
References
SECTION 6: 13
About the Authors
Table of Contents

3
Challenge
Seen as assets, IT hardware and software items become important to the business because they
represent assurance that underlying systems for business processes will be available to the company
on demand. The options for obtaining this on-demand availability have undergone dramatic evolution
and expansion, but making sense of more options calls for increased understanding of their relative
pros and cons. Without that understanding, it is both more likely that confusion about underlying
systems will occur, and less likely that management of assets will have strong alignment to the actual
performance needs of the business’s processes.
Opportunity
The high level top-down understanding of assets that is now required will feature a familiar point of
view that asset management has the primary goal of assuring support for business processes; but it
will stress that the interest in assets is primarily in their being the materiel of environments that are
required for processing. Where the business had previously asked for a direct look at the assets and
then asked what could be done with them, now the business looks at the environments and asks
“what assets in the environment do I need to manage myself?”
IT Asset Management (ITAM) establishes the full traceability of investment in assets to the value of
their utilization impacts, providing managers with the needed decision support.
Benefits
To reach high performance, business processes need an environment of configured resources
having appropriate capacity and availability. ITAM standardizes the recognition of asset impacts in
several related contexts that make the view of capacity and resource availability easier to obtain,
the responsibility of maintaining the view easier to properly distribute, and the true types of its
effectiveness more readily measurable.
Executive Summary

4
Section 1:
Organizing assets
Re-organizing management
The need to manage assets is based in the role that the business must actually play to assure business
processing success. Most generally, the role is to be a consumer or a provider. A given company will
identify and judiciously blend its roles across different environments that it needs for supporting
business processes. Being judicious, it will first decide what the responsibilities are of the roles, and
then determine if the related competencies for management are best accessed in-house or not. It has
been determined in the past by industry analysts that the complexity of management itself can cause
nearly two thirds of operational costs associated with assets; now, reducing management complexity is
imperative for reaching the timely responsiveness to change that the business requires of IT.
Adopting the responsibilities of the consumer and provider roles is driven, as always, by the objectives
of the business. Today, the two major objectives of the business pose interesting challenges.
On the one hand, agility, meaning rapidly responding effectively to changing business needs, is the top
priority; but it is challenged by the desire to have the necessary related expertise always at hand. Thus,
change confronts staffing.
On the other hand, IT organizations have the second top priority of being able to afford the delivery
of infrastructure and support for the business needs; but IT is usually being asked as well to cut costs.
The new value chain
To understand the strategy for resolving the two challenges of rapid change and affordable delivery,
it is necessary to clarify terminology and management functions.
Supply, Delivery and Provision are not synonyms but instead are key terms that distinguish criteria
used to decide what roles to take on.
• Under Supply, IT and business executives need to come to agreement about where and when to
source the needed environments.
• Under Delivery, competencies in implementation, accessibility, and sustainability (service levels)
are essential.
• And under Provision, aligning demand to quality and demand to performance is a continual
responsibility.
These three general factors largely prefigure the likelihood that the company running the business can
make asset management support the business well. And again, the key business challenges are agility
and affordability.
In a 2011 Global CIO Survey of 209 IT executives, InformationWeek Analytics cited the top issue
among surveyed leaders as “IT isn’t implementing fast enough to meet business goals.” This
challenge of agility is especially complicated by the perennial but time-consuming objective of
improving processes.

5
Meanwhile, the number two worry among those surveyed was that “IT budgets are insufficient to meet
goals”, further complicated by the persistent mandate to cut costs.
To develop an effective stance against these paradoxical issues, Smart Enterprise Magazine advises
the approach of abstracting applications and infrastructure from their current physical dependencies.
Physical dependencies specifically point to the architectures that subscribe assets into systems making
up processing environments. And for the business, abstraction specifically means that prescribed
functions and outputs must be defined benefits that are experienced primarily through access to
provided managed environments, not necessarily experienced through attachment to certain local
facilities.
The important formula for value is that process improvement now means agility, while business cost
really means affordability. Said differently, process improvement is actually flexibility and speed of
deployment, while cost is actually efficiency of resource utilization.
The primary resource is environments. The current evolutionary phase of IT environments for
business features a combination of two dominating forms of abstraction: the internet, and systems
virtualization. In effect, each form has the same importance compared to previous phases: the ability
to place and access functionality and outputs dynamically, from anywhere to almost anywhere else,
on demand. Together they make up the foundation of cloud computing.
Cloud computing
Cloud computing is defined in Wikipedia as “a paradigm of computing in which
dynamically scalable and often virtualized resources are provided as a service over
the Internet”. It relates to multiple aspects of IT services including Infrastructure-
as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS).
IaaS leverages virtualization technologies and their automation capabilities to
provide a highly scalable IT infrastructure (i.e. servers and networks) that allow
the organization dynamic capacity and flexible pay-per-use pricing that help reduce
capital expenses on infrastructure and outsource some of the IT services for a
lower cost. IaaS relies on virtualization technologies to achieve the low cost of
management and economy of scale through automation.
Nimrod Vax, Product Management
Security Management, CA Technologies
Said differently,
process
improvement is
actually flexibility
and speed of
deployment, while
cost is actually
efficiency of
resource utilization.

6
This environmental evolution moves the traditional cause of asset value to a different mode of
management. That is, management must still cause value to grow, but in a different way.
Traditionally, and logically, IT assets have value because they are used as resources; and in
operations, effective utilization tracks linearly to the recognized value of the assets. Accordingly,
the most conventional measurement of effective value is the asset’s measurable impact on
processing success, which is usually reflected as the return on the investment in the asset.
Before now, businesses were engaged in direct management of the assets, trying to evaluate their
cost versus their lifespans.
But now the appropriate business perspective is to manage access to appropriate managed
environments whether internal or external, and the assets in a selected environment may not
even belong to the access managers.
More specifically, in light of business, a company’s most critical internal management is of access
to environments, more than internal management of the environments themselves. From this high
level point of view, Smart Enterprise further identifies two key goals for IT management: turn existing
investments into private clouds; and coordinate new approaches of delivering business function and
outputs, from external applications and services.
Section 2:
Aligning assets to business
Operations management
The clear message to IT is that managing assets now becomes even more explicitly about the
logic behind deciding what to own, borrow, keep exclusively, or share. Each decision constrains IT
in composing availability of the environments needed by the business processing. Under those
constraints, it is imperative to arrange for that availability on the best possible terms. Those terms
may need to be negotiated. As seen more and more frequently, business will then focus on availability
of environments through services, instead of through systems.
The practice of Asset Management will organize for supporting availability on demand, and this will
actually rely on a chain of related operations that is familiar but is adapted to the current times.
In this operational chain, there are four major links.
• On-Demand “Supply” focuses on a pool of computing resources, attending to scale, location, version
and duration of capacity.
• The Deployment Lifecycle (delivery) will attend to managing the incorporation of resources into
prescribed utilizations, committing and decommissioning them for defined services. Service level
agreements drive the generation of infrastructure, and coordinating the infrastructures creates
environments.

7
• On Demand “Provision” focuses on access to environments, and on delivery or removal of
environments, containing services for use by business processes.
• Performance Monitoring will attend to assessing the impacts of the environments on the processes,
in three major areas: business adaptability, employee productivity, and revenue.
For the company that is running the business, the major question is about what aspects of those
operational links it should take on internally, either as the consumer or as the provider. In either stance,
since the related operations will be internal, the decisions will dictate the need for certain internal
competencies; and there may be cross-role or multi-role positions as well. These related competencies
will form the practice of managing the assets.
The following illustration shows the business landscape in which these operations are adopted and
managed internally, In the illustration, there is a consumer side to both supply and demand, as well
as a provider side to both supply and demand. Boxed items in the illustration are all areas subject to
direct management.
Figure A
Identifying and
leveraging required
competencies.

8
Top to bottom in this model:
• Business activity with IT is seen simply, in terms of three general issues: what is used, how it is used,
and who can use it.
• Consumers and providers share mainly the concern for how things are used, and enter into
relationships with each other because of that.
• In terms of responsibilities, the three general issues map directly to conventional points of view
in managing IT assets, points which must now apply to understanding how services derive from
their environments. Competencies in managing property, resources, and systems respectively
power corresponding forms of operational policy and metrics—namely, the trio of entitlement,
performance and environment which today is most commonly discussed as the business
alignment of IT.
• But the main beneficiaries, which are business processes, don’t see things that way. Instead, impacts
are what the processes see. The relevance of the top down viewpoints depends on how they explain
probable impacts on processes.
• Those explanations are what support proactive decisions to push things in certain directions.
The resulting strategy is defined in terms of the portfolio and architecture that prescribes the
intended role and status of assets as business process resources.
• The strategy-driven portfolio and architecture directly associates to the two basic ways that resources
have meaning to a business process, namely value (what kind of difference they make) and quality
(how consistently they make the expected difference). Those areas of impact are in fact the two faces
of Risk to the business process—that is, risk that the process will not be able to perform as necessary.
• Expressed as parameters of value and quality, the support requirements of a business process define
an immediate context for evaluating assets. In that context, assets should be selected as resources
composing the environments in which processes find suitable services.
For the company running the business, a primary goal today is to create and sustain the opportunity
for the business to change with the markets as needed and leverage them successfully. Understood as
seen above, asset management must attend to how business orientated strategy should be articulated
both in the consumer mode and in the provider mode of resourcing.
Any given company or organization will need to take ownership of the different areas illustrated, as
a way to operationalize its management effort.
• The business model of the company can distinguish and drive the key operational responsibilities
to embrace.
• Maturity, affordability, or other decisive characteristics of the related competencies for operations
may be better available in one organization than in another.

9
Assets are subject to the operations mainly through those competencies. In particular, under pressure
for agility, governance through asset strategy aligns asset supply and demand.
Assets as resources
Creating resources from assets is both a consumer and provider concern, and both sides contribute
to the strategic posture of processing environments. Today, the three emergent environments are all
“cloud formations” but their distinction is in whether they are bounded operationally within the
company’s sites, external to the sites, or some of both. Respectively, those three environment
formations would be private (internal), public (external/commercial), or hybrid.
To assure consistency in how the concept of assets is applied across these formations, the following
definition is at work: Assets are items whose business value is being explicitly managed in terms of
legal, financial, and security ramifications in their possession for utilization in operations.
This definition, which includes a variety of conditions, helps to explain how it is that certain
responsibilities for managing assets may be preferable to, or more appropriate for, some parties more
than others. It also helps to explain how so many different types of items may be, conditionally, assets.
Finally, it helps to describe how the value of an asset may suddenly change: simply re-assign an asset
from one operational function to a different one.
The “resourcefulness” of the asset is a close indicator of its potential value, and asset reassignments
hinge more on agreements or permissions than on anything else, although the actual generated value
depends on the impacts produced with their involvement. Asset resourcefulness, which we can more
simply call versatility, is a contributor to operational flexibility, but that flexibility is not automatically
beneficial; the flexibility must offer support appropriate to the requirements of the target business
process.
Unfortunately, these flexible or resourceful assets have typically had that nature due to being over-
engineered or being customizable. In turn, at any given point in time they have been less cost-efficient
and more complex to maintain.
Possessing operationally versatile assets has definitely been an important tactic to pursue. But a
parallel and increasingly preferable tactic is to have flexibility in entitlements to different types of
existing assets, or have flexibility in the delivery of appropriate new assets.
All of those techniques of versatility and flexibility are common in asset management as practiced
heretofore. Along with cascading assets through repurposing, flexibility has been a target of leasing,
time-sharing, outsourcing, and other means. Virtualization and cloud computing have dramatically
innovated those approaches.
Now, with all approaches, their importance is in helping providers get their consumers to achieve
relief from dependencies that work against agility and affordability in business processing. In all
approaches, there must be management of the means, the motive, and the opportunities. Translated
to asset management, the question is, by whom is robust engineering and diverse accessibility most
likely to be needed, and most likely to be provided?
Assets are items
whose business
value is being
explicitly managed
in terms of legal,
financial, and
security
ramifications in
their possession
for utilization in
operations.

10
Section 3:
Business impacts
Value on demand
A major example of the desired progress is virtualization of environments. The role of virtualization
has emerged hugely, at the midway point between systems engineering and provisioning. Virtualization
has been turning IT teams into service administrators, who use virtualization to address requests for
functional capacity with fulfillments having notably great reductions in the construction, costs, and
complexity of deployments.
In all three reductions—construction, cost and complexity—the risk of delays are also reduced.
Consequently, standards and approvals are more likely to be obtained and pre-applied in the delivery,
smoothing the way for provision on demand. Configurations of involved assets, the acceptability of
operational expense levels, and the compatibility of resources to target environments are all benefits
of virtualization under the influence of standards and approvals.
The practical representation of the needed standards is most often a service definition, which can
be comprehensive enough to include the terms of entitlement, of performance and of component
systems. A good service definition allows the service to be presented to a potential consumer as an
offering having the combination of utility and warranty that the IT Infrastructure Library (ITIL) defines
as customer value.
As a best practice, these offerings are published in, and ordered through, service catalogs. When
virtualization is involved, fulfillments of service orders can be more highly automated, which further
increases the efficiency and consistency of provisioning.
In short, managing assets to conform to service needs is, as always, one of the main objectives under
the goal of satisfying the business. The target benefit is to accomplish service fulfillment effectively, on
demand. Service definitions give a provider a specified guide to how assets should make a difference.
The consumer invests in the service provision, and the provider invests in the assets.

11
Management transparency
Organizations that take on the role of provider may be both within the company and external to it,
dividing up responsibilities according to their relative abilities to meet the demand for dynamic
sourcing, resourcing and service performance levels.
These abilities will be constrained by such risk factors as sunk costs, non-compliance, change control,
and competition. The constraints should be decisive in determining the organization’s probability of
success with different aspects of the provider role.
Meanwhile, it is apparent that providers must manage suppliers in order to achieve control of
those risk factors. Connecting supply management to service definitions creates a foundation for
provisioning. Discovering how much supply can be covered by external parties frees up internal
people and management time. Those internal gains can then be used on improving remaining delivery,
including discovering and developing innovations that take the business beyond its current limits of
operational competitiveness.
In hybrid operations, internal and external delivery organizations will collaborate within the definition
of services, pursuing greater asset availability and economies of scale. Also, organizations today
may use and provide cloud and traditional services together. This is a situation in which an eventual
migration of responsibilities for assets can be proposed, including an actual migration of ownership
to whichever organization is the more capable or convenient for the business process.
In accordance with how the management parties divide up roles and responsibilities, the distribution
of assets will be a primary concern of the parties, because it preconditions whatever resourcefulness
assets may have. As a result, the terms on which assets are intended to succeed as resources quickly
extend from plans including contracts, to actuals including discovered current configurations and
locations in service.
Through automation of the operational processes conducted by the management roles, information
about the status of assets is more continually available, and the lifecycle of an identified asset
becomes a measurable trajectory to targeted impact within the business landscape. These trajectories
can then be compared with each other and over time, in order to make better decisions about what
assets now need to be on hand to use.

Section 4:
Conclusions
Agility is operational. Agility is about organizing operations to exploit flexibility in both deployment
and scalability, so as to achieve appropriate operational integrity on time for the necessary business
process. For agility, operations must adjust appropriately, on demand and within context; otherwise
there is low value in the operations.
But flexibility comes from having choices, and choices can lead to complexity that is counterproductive,
by making management more difficult without adding enough net value or quality. This poor outcome
is the showstopper that puts true agility out of reach of operations.
The goal of Asset Management is now to bring assets under the objectives of flexible deployment and
flexible scalability, without harming value or quality as needed in the target business process. From
that perspective:
• Business will focus on availability of environments through services, instead of through systems.
• IT will compose or orchestrate availability of the environments needed by the business processing.
• In operations, asset management will organize supply and support delivery, for creating availability
on demand.
• In doing this, asset management includes entitlements, resources and environments, making
business-level decisions to address the business requirements.
IT environments for business processing continue to evolve for greater agility. Prominently,
virtualization and cloud computing are both essentially about deployment and scalability made
available as environments on demand. Accordingly, asset management should immediately
re-evaluate the status of assets as resources in these environments.
Providing environments and/or their resources is a more appropriate activity for some organizations
to do than for others. Key factors are:
• Applying management competencies
• Lowering opportunity costs
• Avoiding reinventing the wheel with proprietary support organizations
Through examining and selecting roles as consumers or providers across traditional, virtual, and cloud
environments, organizations identify the requirements that create the basis for, and scope of, their
ownership and control of assets.
Based on those perspectives and positions, IT Asset Management is pursued in a streamlined mode
sustaining the connection of asset investments to the performance of the business.
12

13
Section 5:
References
Eliyahu Goldratt; The Goal, 1984
John Zachman, A Framework for Information Systems Architecture, IBM Systems Journal, 1987
Paul A. Strassman, Introduction to ROM® Analysis: Linking Management Productivity and Information
Technology, 1996
Dixit, A.; R. Pindyck, Investment Under Uncertainty. Princeton: Princeton University Press, 1994
Section 6:
About the authors
Malcolm Ryder is an ITSM practitioner and strategist with over 20 years of experience designing
enterprise IT service management software solutions, and delivering solutions consultatively to
individual companies and commercially to the US and UK marketplace. He is currently a Senior
Architect at CA Technologies, where he establishes requirements and blueprints for integrated
ITSM and ITAM implementations, working directly with customers.
David Messineo is an ITSM Practitioner with more than 20 years of experience developing and
deploying enterprise-level software solutions focused on IT management. He is currently a Senior
Architect and Researcher at CA Technologies where he is responsible for implementing a holistic
performance measurement framework across the CA Technologies solution portfolio. David holds
both an ITIL® Service Manager and eSCM Certification.

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