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The rate of technology change is increasing, with an emphasis on client/server technology, faster system development, and shorter life cycles. This has led to spiraling information technology (IT) budgets in both the public and private sectors, driving the need for a re-evaluation of IT management issues. Asset management and total cost of ownership (TCO) concerns have become increasingly important due to the need to understand and control the computing environment. IT management begins with the decision to acquire hardware or software, and continues through the useful life and final disposition of the item.
Asset management covers the entire spectrum of IT ownership, from decisions and negotiations regarding purchases, to establishing life cycles, to management of the resource, and arranging for disposal of obsolete equipment. It enables agencies to track what they have, what they use, and what they need. Asset management provides control over the computing environment, allowing managers to leverage IT components and costs for maximum cost-effectiveness and efficiency.
TCO models describe the cost to an organization of establishing and maintaining a computing environment. Their intent is to quantify costs beyond the purchase price of hardware and software. The actual purchase cost of IT is one of the least expensive factors in most TCO models, although acquisition strategies must still be cost-effective. With TCO, agencies must also consider the cost of maintaining the system, the availability of staff expertise (for problem solving, development, and management), and the value of the equipment at the end of its useful life cycle.
 The acquisition decision must be made with a complete understanding of overall processes and agency needs. Both TCO and asset management go beyond purchase price to identify life cycle costs and management issues that may lead a business to prefer either leasing or purchasing as an acquisition strategy. These two subjects frame the decision-making process for acquiring information technologies.
At each step of the life cycle, asset management issues and TCO costs can be identified. Itemizing these issues pinpoints areas for agencies and universities to focus on when making acquisition decisions. Asset management practices must be in place at each step to control the computing environment and reduce leasing costs to the agency. TCO costs help to identify the full costs of IT acquisition and management. Understanding the impact of both issues enables an agency to conduct an accurate cost-benefit analysis.
Here at RAY • ALLEN we are with you every step of the way. We are able to use our years of industry experience to help you make the right decision for your business and then help you manage through the entire IT Asset Life Cycle. If you would like to know more please contact us today. |
