Next-Generation Asset Management and IT Financial Analytics: Optimizing IT Value in a World of Change

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IT & DATA MANAGEMENT RESEARCH, INDUSTRY ANALYSIS & CONSULTING

Next-Generation Asset

Management and IT Financial

Analytics: Optimizing IT Value

in a World of Change

An ENTERPRISE MANAGEMENT ASSOCIATES®_{(EMA™) Research Report}

Written by Dennis Drogseth May 2014

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Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Executive Introduction ... 1

Methodology: ... 1

Demographics ... 1

Organizational Dynamics ... 2

Functional Priorities and Technology Adoption ... 3

Managing and Optimizing Asset, Financial and Service Management Data ... 4

Service Modeling, CMDB and ADDM ... 5

Next-Generation Asset Management Extensions ... 6

Cloud ... 7

Summary—Conclusions ... 7

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Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Executive Introduction

How are IT organizations making the transition from a cost-centric, back-office operation to a value-driven business partner? The following Enterprise Management Associates® (EMA™) research report across more than 150 respondents holds at least a few clues.

Methodology:

This research involved 168 respondents in North America who were involved in IT asset management and IT service management. Data was collected in April of 2014.

Demographics

Some of the key points on demographics were:

• EMA surveyed only businesses and organizations with 250 or more employees. But beyond this there was a fairly even spread, with 17% of the businesses surveyed having more then 20,000 employees, while on the other hand 21% had fewer than 1,000.

• The five leading verticals were: manufacturing, finance/banking/insurance, healthcare/medical pharmaceutical, government, and retail/wholesale/distribution.

• High executive content: 17% were director-level or above, and 17% were C-level within IT. 11% were non-IT executives and professionals involved with ITAM services.

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Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Organizational Dynamics

One of the most critical questions pursued in this research was to what degree and in what dimensions are IT asset management and IT service management (including operational values) coming together? This was viewed as significant because once the transition from cost to value is made, IT assets need to be understood, managed and optimized in context with the delivery of IT services. In an ideal world, this would include virtually all OpEx and CapEx IT assets, from desktops, to data centers, to application portfolios, to cloud and telecommunications resources. As these assets are brought together, or in a growing number of cases modeled to show how they contribute to definable services, IT’s ability to account for its contributions to the business or organization it serves becomes real and meaningful for the first time.

Figure 1 shows that 43% of the respondents indicated that asset and service management were already being combined, at least in part, while 23% of respondents had committed plans to do so in the future. The 43% figure for combined asset and service management is about 10 percentage points higher than those indicated in past research, indicating a gradual trend in this direction.

43%

34%

23%

0% 10% 20% 30% 40% 50%

Asset management and service management are managed together

Asset management and service management are managed separately

Asset management and service management are managed separately today but will be managed

together in the future

How would you characterize your company’s existing environment?

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Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Functional Priorities and Technology Adoption

When asked about their top two service-related asset management priorities, managing and optimizing assets for changing requirements was a clear winner (Figure 2). This becomes all the more dramatic when you consider that the next two areas target lifecycle, and the fourth highlights the transition to cloud.

26% 18% 18% 18% 15% 14% 14% 13% 13% 11% 11% 11% 10% 8% 0% 5% 10% 15% 20% 25% 30%

Managing and optimizing IT assets for changing requirements Managing and optimizing IT HW and or SW assets across their

full lifecycles (introduction through retirement) Lifecycle planning of IT application services from a cost/value

perspective

Supporting the move to virtualization and cloud Improved service levels (SLAs) and delivering applications to

the business faster

Improving accuracy of inventory records Management of mobile devices More automated software asset management/license

management

Managing vendor/service providers as integrated resources Providing IT and LOB executive management with effective

financial reports

Consolidating silo-based asset management for a holistic, service-based view

Optimizing telecom-related expenses More effective analytics for overall financial optimization across

both opex and capex concerns

Linking asset management with service catalog and service request systems

What are your company’s top two (2) service-related asset management priorities?

% Valid Cases (Mentions / Valid Cases)

Figure 2: Managing IT assets to address changing requirements clearly leads in functional requirements for service-aware asset management—especially given the focus on lifecycle management and

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Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Managing and Optimizing Asset, Financial and Service

Management Data

While there is a clear and progressive trend to combine IT asset and service management, challenges in managing data still remain fairly unprogressed. Figure 3 shows that spreadsheets dominate; however, an asset management database, a positive indicator, comes in as runner-up. Average perceived accuracy was about 90% (which is probably optimistic based on other EMA research and consulting). An average of ten hours a week is spent resolving data accuracy issues.

34% 31% 29% 23% 22% 18% 18% 17% 15% 12% 12% 1% 0% 5% 10% 15% 20% 25% 30% 35% 40% Spreadsheets

Asset Management Database (versus asset management product from a vendor)

Multiple local DBs Vendor-provided asset management product Inventory or discovery tools Paper Outsourced service (SaaS) resource Federated CMS (including asset DB and CMDB) CMDB Outsourced consulting service Visio Other (Please describe)

Where is the information from your company’s financial planning, service planning, and asset management system stored?

Figure 3: Even if the trend to combine asset and service management in theory and practice shows signs of progress, data management remains something of a struggle, with spreadsheets

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Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Software asset management, or software license management, remains a critical and still very challenging requirement. Figure 4 shows that 57% believe they optimize software license management very well for most or all vendors. However, other data shows that only 64% currently track usage for desktop software.

73% 19% 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% Yes No Don’t know

Does your company have a software asset (license) management system in place?

Figure 4: Software license management remains a major challenge and an essential building block for effective IT asset management, indicating that they had some level of software license management in place. The

three most critical environments were Microsoft Office 365, VMware and HP. (Sample size = 168)

Service Modeling, CMDB and ADDM

One of the most effective ways to optimize service and asset interdependencies is through service modeling, and 62% of respondents claimed that they were at least beginning to use service modeling to link assets with owners, customers, and physical interdependencies. Moreover, 57% had a CMDB either deployed or planned (14% didn’t know).

Figure 5 shows that there is a definite relationship between having or planning to have a CMDB and linking asset and service management together.

Does your company have a CMDB or CMS currently deployed or planned? By How would you characterize your company’s existing environment?

Asset management and service management are managed:

54% 29%

17%

Together

Yes No Don’t know 72%

23%

5%

Separately today but will be managed together in the future

Yes No Don’t know 49%

33% 18%

Separately

Yes No Don’t know

Figure 5: Those with a CMDB deployed or planned have a clear edge in at least planning to integrate service and asset management for more value-based optimization of IT. Blue represents CMDB deployments current or

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Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Some other highlights for those with CMDB/CMS deployed or planned include:

• 2X more likely to have automated asset and inventory in place and update at least multiple times a day

• Significantly more likely to link multiple data sources meaningfully

• Nearly 2X more likely to track usage for desktops and reassign unused licenses • 3X more likely to have a service catalog in place

• Twice as likely to get an increase in IT budget as those without

Next-Generation Asset Management Extensions

Here, research data showed that 66% of respondents felt that application portfolio planning and optimization was important or very important. Significantly 31% had integrated portfolio planning into their asset management strategy already, and a dramatic 37% planned to do so within 12 months, suggesting that this combined view of cost and value is finally coming of age. How are they doing this? A small majority, 52%, are looking for combined input from dialog and analytics, while the remainder (primarily through dialog, versus primarily through analytics) were virtually even at 25% and 24% respectively.

Other areas of expansion worth noting include:

• 48% are already integrating Green IT requirements for power, heating and/or facilities into their broader asset management direction.

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Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Cloud

Not surprisingly, 71% of respondents were already encountering some form of cloud initiative in their environments, and of these, 64% view cloud as impacting their asset management directions either critically or significantly. Only 1% saw cloud as having no impact.

39% 38% 37% 37% 37% 35% 31% 22% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Cloud is changing how we measure costs and asset investments

Requires higher levels of automation

Changes organizational ownership in some areas of asset management

Adds new wrinkles and makes asset management more complex Adds political complications, not sure who does what/owns what

Requires more real-time awareness Takes away some asset management requirements: makes it simpler

Ups the bar on how we account for infrastructure and service usage

How has the advent of Cloud computing and/or Cloud services (qualitatively) impacted your company’s asset management requirements and strategy?

Figure 6: This data shows a wide range of impacts on asset management from cloud with changing how costs are measured and higher levels of automation taking the top two slots. But organizational impact and political complications

also scored high. A meaningful percentage felt cloud made asset management more complex than made it simpler. Not on this chart, but significant, is that 56% felt that cloud made asset management more service-centric, and

67% felt that cloud made asset management more cross-domain. (Sample size = 120, valid cases = 120)

Summary—Conclusions

Research data in 2014 shows a clear move toward a more service-oriented and service-aware approach for IT asset management and IT financial optimization. This transition is critical if IT is to evolve from being a cost center to a true value provider with a clearer understanding of costs/benefits and impact for its delivered services.

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Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

About Scalable

Founded in 2008 as a SaaS company, Scalable’s mission is to deliver operational expense reduction, efficiency and transparency to IT organizations through usage powered products that cut software costs and drive financial control of IT. Its Asset Vision® offering provides integrated inventory, discovery and normalization underpinned by forensic software usage metering while supporting the needs of today and tomorrow’s computing platforms. With an emphasis on integration to enable best of breed implementations it can readily adapt to improving current IT infrastructure performance.

Learn more about Scalable’s solutions and services for enterprise organizations at www.scalable.com or www.scalable.com/resources/blog/ You can also follow Scalable on Twitter, Facebook or LinkedIn.

About Enterprise Management Associates, Inc.

Founded in 1996, Enterprise Management Associates (EMA) is a leading industry analyst firm that provides deep insight across the full spectrum of IT and data management technologies. EMA analysts leverage a unique combination of practical experience, insight into industry best practices, and in-depth knowledge of current and planned vendor solutions to help its clients achieve their goals. Learn more about EMA research, analysis, and consulting services for enterprise line of business users, IT professionals and IT vendors at www.enterprisemanagement.com or blogs.enterprisemanagement.com. You can also follow EMA on Twitter, Facebook or LinkedIn.

This report in whole or in part may not be duplicated, reproduced, stored in a retrieval system or retransmitted without prior written permission of Enterprise Management Associates, Inc. All opinions and estimates herein constitute our judgement as of this date and are subject to change without notice. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies. “EMA” and “Enterprise Management Associates” are trademarks of Enterprise Management Associates, Inc. in the United States and other countries. ©2014 Enterprise Management Associates, Inc. All Rights Reserved. EMA™, ENTERPRISE MANAGEMENT ASSOCIATES®_{, and the}

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Next-Generation Asset Management and IT Financial Analytics: Optimizing IT Value in a World of Change

Next-Generation Asset

Management and IT Financial

Analytics: Optimizing IT Value

in a World of Change

Table of Contents

Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Executive Introduction

Methodology:

Demographics

Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Organizational Dynamics

Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Functional Priorities and Technology Adoption

Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Managing and Optimizing Asset, Financial and Service

Management Data

Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Service Modeling, CMDB and ADDM

Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Next-Generation Asset Management Extensions

Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

Cloud

Summary—Conclusions

Next-Generation Asset Management and IT Financial Analytics:

Optimizing IT Value in a World of Change (Research Summary)

About Scalable