Planning as an organizational capability

As IT expenditures increase over time, budgets tend to become the key focus, and the ability to deliver longer term capabilities suffers further.

Planning is an organizational capability critical to managing IT assets. The organization has to focus on building the ability to successfully plan for the future.

In building planning as an organizational capability, the organization places particular emphasis on the following:

򐂰 Developing skills and expertise and strengthening the capacity of managers to lead and develop the organization.

򐂰 Improving the IT infrastructure and information management systems to support the organization’s vision and goals.

򐂰 Building closer, more collaborative relationships with both internal and external stakeholders.

򐂰 Continuing to develop planning systems so that strategic priorities reinforce an integrated approach across the organization and are linked to the organization’s objectives.

Planning should promote the vision and goals of the organization. Organizations must have powerful tools that provide strategic IT information for day-to-day operations and strategic planning. Planning enables business users to view a multitude of data and perform a rapid analysis without the need for complex database queries.

Chapter 10. Planning and refresh 177 Figure 10-1 shows the refresh chart for a 10-year period. Assumptions about the refresh policy are shown along with the chart.

Figure 10-1 Example refresh policy

An organization with an effective planning capability has the following advantages:

򐂰 Improved asset control - Automatically track assets with automated alerts.

򐂰 Better cost control - Perform powerful cost analysis to support purchasing decisions.

򐂰 Reduced waste - Cross-check usage and ownership details to avoid buying more than required.

򐂰 Lower risks - Eliminate doubts about license ownership and its compliance.

The following types of planning are generally used by organizations:

– Short-term planning

Short-term planning occurs on a year-to-year basis. Normally the data for this type of planning is based on last year’s actual expenditures. Last year’s budgeted variance is also taken into account for this kind of planning. Accordingly, a target is provided to reduce the expenditure or allocate extra funds. Finally, the data from long-term planning (such as technology refresh, upgrades, and so on) is taken into account, and budgets are provided for the current year.

– Ad-hoc planning

This type of planning occurs in the middle of the year. The data originates from the Service Management department when the downtime of some assets becomes a bottleneck to fulfilling the organizational vision and goals. When such assets are refreshed, their actual refresh plan (that is, the long-term plan) is automatically revised.

– Long-term planning

This planning occurs on a three- to five-year basis. The technology refresh and IT strategy of the organization are inputs into drafting this plan.

Long-term planning becomes one of the inputs for the yearly budget plan.

This plan also provides concerned departments with input for their respective budgets.

For example, an organization’s IT strategy designates that desktops and mobile computers be refreshed after three years, printers and network equipment after four years, and servers and storage after five years. The planning tool provided by IT should provide the number of assets to be refreshed by organization, so the concerned departments know in advance when the refresh is planned to occur.

Thus, the finance department can plan to cover the capital expenditure required to provide the number of assets planned for refresh in the next three to five years. The procurement department can make plans with the manufacturer and thus issue the required POs. The inventory department can plan for shipment deliveries and storage, and the asset manager knows which assets are being retired and which assets are planned for delivery. The asset manager can plan for the disposal of the retired assets with help from HR or the finance department (depending on how the assets are to be disposed of - through an employee purchase plan or donations, by scrapping them, or by returning them to the vendor if the assets are leased or rented). Department heads understand when their departmental assets are due for refresh and can obtain periodic or on-demand reports on them.

Chapter 10. Planning and refresh 179 Having a powerful asset management tool facilitates this scenario. When a critical asset is to be refreshed because of inputs from the service management department due to unacceptable downtime or poor services from the vendor, the change in the plan is immediately carried out

throughout the organization. The finance, procurement, and inventory departments, the asset manager, and the department heads have access to the revised plan, and their budgets are accordingly updated. The asset management tool does this automatically if the workflow is integrated with the tool.

10.1.1 Information requirements

Proper planning requires accurate and timely information. The information used as input into the planning process can originate from a variety of resources, as described in the following sections.

Service management

One source of planning information is the service management process. The downtime of an asset is monitored by the service management department as a call for service is logged to the service management tool. The service

management department maintains data on which assets are experiencing problems and whether an asset should be replaced, upgraded, or refreshed, based on the downtime data for the asset. This data is provided to the planning department, which facilitates creating plans for the current year’s budget. The asset management tool helps update this information and distributes it to different departments to update the respective plan and resultant budgets for the coming years.

Information systems management tools

These tools are another source of data for planning. The tools that maintain data on assets - which departments owns them, when the refresh date is planned, and so on - can be passed on to the service management desk when a service ticket is logged. Based on this input, the IT department may recommend the asset be replaced, refreshed, or upgraded.

Financial systems and spreadsheets

Finance drives much of the planning process. Finance department staff provides budgets versus actuals, year-to-date expenditures, and so on. The organization must capitalize many procured assets to take advantage of depreciation benefits and other tax-related items. Hence close coordination must be in place with the finance department throughout the entire life cycle of an asset so that the correct financials are reflected on the organization’s books.

Decision support systems

Based on data from the service management desk or the asset manager and the user, management can decide to refresh the asset in advance, even when the service management desk or the asset manager has not recommended the refresh. This decision takes business goals and IT strategy into account.

Reacting to external factors

One of the data sources for planning is information from external sources, which forces the asset manager or the service management desk to decide to refresh assets. For example, if a particular manufacturer or vendor has stopped production of a critical asset or discontinued support for it, the service

management desk and the asset manager can decide either to refresh the asset or to use it in a noncritical application until it is sunset per policy.

10.1.2 Tools to assist planners

To plan for an IT infrastructure that corresponds to the business vision and goals, the planner should possess sound knowledge of the end-to-end asset

management process. The planner must have the skills to understand different phases of the life cycle and the organizations and functions involved. This individual should have a working knowledge of how assets are handled

financially as well. A comprehensive tool such as Tivoli Asset Management for IT, which provides linkage between financials and contracts, can be critical to the planner’s success.

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