Business Intelligence for IT Asset and Configuration Management

by Andy Graham

In this new era of technology and information, businesses are now so dependent on technology that an IT department’s ability to deliver expected levels of service directly impacts a company’s bottom line. It is critical for organisations to identify, manage and optimise all IT changes so that the service levels, that businesses rely upon, can be maintained. It’s therefore no surprise that the alignment between corporate profitability and IT expenditure is at the top of the agenda for executives in most companies. The need for sound metrics that can be used to measure the cost and efficiency of the organisation’s most important IT-enabled business processes is now paramount.

Conventional wisdom will see you purchasing (or building) a configuration management database (CMDB), but this is only half the story. The challenge still exists as to how do you transform service management and asset management detailed operational data into meaningful, business-focused intelligence allowing the analysis of metrics to give you a consolidated view of your business. An organisation needs to be able to easily drill-down through the information to identify causal relationships or trends that can not be seen through static reporting. Research from META Group, for example, highlights that many server are utilised for less than 25% of a 24-hour day due to poor IT asset management.

To be successful an enterprise needs to have in place a viable information architecture that addresses the needs of IT service and asset management. In other words, by effectively managing IT change, asset and service levels you can deliver proactive IT support that will reduce the occurrence of IT failures, improve service levels and customer satisfaction, and reduce fixed and variable costs.

This article explores the business case for the implementation of a business intelligence solution for the analysis of the organisations asset and configuration management information.

The Need to Measure

Traditionally IT performance has been measured in terms of service-level agreements (SLA’s) and potentially total cost of ownership (TCO). Both these methods have great value as a contributor to day-to-day management and strategic planning, however to understand the true effectiveness of IT in business terms it is necessary to build metrics that tie granular-level business indicators with the IT platforms on which they are provided.

For example, META Group reviewed 6 retail financial institutes and identified that the IT-related costs of managing one customer account varied from $14.75 (worst case) down to just $9.80 (best case). This analysis goes further by concluding that a staggering 25% cost savings can be achieved by taking ownership of asset procurement, optimisation, and fiscal stewardship across all enterprise IT resources.

Without an analytical addition to your IT asset management system, your organisation will be:

Unable to understand costs, cash flow, budgets, in addition to providing a credible charge-back system to allocate IT costs to the business lines.

In a weak negotiating position in relation to contracts.

Unable to understand the correlation between IT and Business.

Unable to forecast and monitor the usage of their assets effectively and therefore identify IT assets that are underutilised.

IT Asset Management
IT practitioners need comprehensive insight in order to supply the business with the information it needs while at the same time enhancing operational efficiency to drive down costs and still maintaining an agreed level of service. Providing key measures on Service Level Agreements ensures clarity and transparency to all, while driving understanding of the associated costs of IT assets makes it clear where and what effect IT spending has had for the business.

Service Level Management
To be effective SLA’s (Service level Agreements) need to be monitored and measured. The ITIL states:

”Nothing should be included in an SLA unless it can be effectively monitored and measured at a commonly agreed point. The importance of this cannot be overstressed, as inclusions of items that cannot be effectively monitored almost always result in disputes and eventual loss of faith in the SLA process.”

This level of information provides benefits such as:

Quality of services and experience.
IT service continuity procedures become more focused.
A clearer view of current IT capacity.
Better information on current services.
Greater flexibility for the business through improved understanding of IT support.
Enhanced customer satisfaction.
Improvements in security.

Financial and Management of IT Services
With effective financial management, IT can contribute to financial planning. Analytical access to the CMDB allows the understanding of expected maintenance costs, license fees, license renewal dates and replacement costs. Cost recovery and expenditure profiles prove to be accurate.

IT Compliance
More businesses are falling foul of copyright laws or compliance regulations. The adherence to legal obligations via the monitoring of legal and illegal assets is now critical. It is not enough to claim ignorance through poor IT management; this is just as much a crime as purchasing pirated software.

Capacity Management
With effective analysis of your CMDB comes the ability to calculate capacity through questions such as:
What assets have we got?
What is our resource utilisation prediction for next year of even the next five years?
What is the variation between actual and forecasted capacity.

Being Pro-active
According to a recent article in ‘Information Age’, June 2005, it is possible to group companies levels of maturity within the world of IT asset and configuration management. The three stages are:
Initial Stage; companies create, through processes and tools, a correct database of all assets and devices.
Second Stage; the complete asset life cycle is captured from procurement to disposal.
Third Stage; this area is all about pro-actively using the management information available to enable effective decision making.

According to this article 60% of companies are still at the initial stage, 30% at the second stage with less than 10% of companies able to perform pro-active asset management.

Companies that strive to undertake pro-active asset and configuration management need more than just simple analysis for a given point in time, they need to compare actual versus expected expenses over time, asset retirement tracking analysis, software compliance/license expense optimization, contract expiration forecasting, and cost distribution over geographical boundaries and activities.

In Summary
This article has looked at some of the key elements behind the business case to implement an analytical capability to support the management of any companies IT infrastructure. Within a pro-active organisation the development and maintenance of this information architecture should be self funding as TCO (Total Cost of Ownership) savings in the region of 25% are achievable.

About the Author
Andy Graham is Managing Director of Koios Associates Limited, a leading information technology consulting company. As an expert in this field he was one of the founding UK team members of Business Objects and later ran Sybase’s Northern European Business Intelligence organisation. Andy can be contacted at +44 (0) 7973 571220 or by e-mail at andy@koios-associates.com.