Use the post-COVID assessment as a springboard to establish ITAM

At the start of the COVID-19 pandemic, organizations rushed to purchase and deploy new technologies (both products and services) at a record pace in order to enable home working. Given the urgency of the time, the usual due diligence process was reduced, or in some cases, bypassed altogether.

While this was the appropriate course of action at the time, now that we are starting to look towards life returning to some form of normality, companies must now look back at the decisions that were made and address any potentially excessive commitments or supplier risks that might have been introduced at the start of the pandemic.

IT Asset Management (ITAM), a division of IT which focuses solely on the management and optimisation of an organisation’s IT assets, is one of the business functions that is poised to play a big role in this post-COVID audit, and thus, in our post-COVID recovery. With its role in the due-diligence of IT spending both before the purchase and throughout its lifecycle, ITAM is well positioned to help supply chain managers to expose and mitigate inadvertent supply chain risks.

Where are the risks?
Due to the time constraints and urgency of the situation, organisations will have assumed a range of risks and costs to their supply chain, possibly unwittingly, during the pandemic.

• Associated contracts: Contracts may not have gone through the typical assessment/analysis, and comparison against the organisation’s standard and mandatory terms (business and legal) – particularly for new suppliers; and, may have been accepted rather than negotiated, without the customary reviews and approvals.
• Supplier viability: Customary evaluation against standard criteria may have been missed or done on a limited basis for new suppliers, such that not all risks were identified, let alone mitigated, with indeterminate consequences. A similar situation may exist for additional business with existing suppliers, particularly if also impacted by the pandemic.
• Overspend: The organization may be paying too much for software, hardware or services purchased in a rush at the start of the pandemic, possibly without the benefit of available or negotiated discounts; or, which may not be needed post-pandemic.
• Overcommitment: Many organizations purchased excess software, hardware or services, uncertain of future demand or supply; in some cases, that excess proved unnecessary, with the result that the organisation has unused (and unusable) inventory. ViacomCBS for example recently saved over 32% on Zoom licenses after an internal ITAM audit found many licenses were being unused. That is just one piece of software. What other savings could be out there?

  The post-COVID assessment

  Organizations should conduct an assessment of all their contracts and suppliers now to identify and reduce unnecessary costs and risks. While a particular focus should be paid to new contracts that were awarded during the period of reduced due-diligence, the viability of existing suppliers should also be (re)evaluated, to identify new or changed risks caused by the pandemic. Suggested actions include:

  • Make an inventory of all contracts established during the pandemic
  • Identify realised and future commitments, update applicable budgets as necessary
  • Compare contract terms with the organisation’s standard terms; identify and address material variances
  • Review or conduct supplier viability assessments
  • Review supplier performance during the pandemic and against the contract
  • Assess usage of products and services against contract commitments and future plans
  • For audit purposes, obtain required approvals (legal, financial, other), albeit after the fact

  Since the overall objectives of ITAM is to control the cost, reduce risks and maximize the value/return of IT investments, ITAM is the best placed to conduct or lead these assessments. In cooperation with its corporate and IT partners, ITAM oversees the business aspects of IT investments, including contracts, suppliers and financials, with consideration for the entire lifecycle, as well as total-cost-of ownership. As a result of this, it is one of the only organisational functions to already have the necessary reach across all other organisational departments, combined with its oversight of the entire IT portfolio (estate), to manage these assessments.

  Use the post-COVID assessment to establish ITAM

  Those organizations that have never looked into ITAM before may find that the post-COVID assessment is a also springboard from which to establish a more formal ITAM function going forward. While the post-COVID assessment will deliver significant value in cost and risk mitigation in and of itself, I would urge organisations to consider ITAM as an ongoing exercise, not a one-off activity.

  Beyond the post-COVID audit, good ITAM will bring many other long-term benefits, in particular:

  • Cost savings: Given that roughly a third of software is wasted or unused, ITAM typically justifies its existence by the cost savings it can deliver alone.
  • License Compliance: If a company doesn’t already have an ITAM function, they usually start one as a result of a software license compliance audit. According to The ITAM Review, 31% of IT asset managers reported an increase in software audits since the start of the COVID-19 pandemic; clearly this need hasn’t gone away.
  • Service Management: ITAM is a valuable resource in planning, costing, configuring and delivering IT services. Services are comprised of IT assets, and must consider IT asset costs, contract terms, supplier ability and risks, and more – all of which fall within ITAM’s purview.
  • Infosecurity: Historically ITAM and information security (InfoSec) have had limited cooperation and integration. By partnering with InfoSec, ITAM can help to bring much greater visibility and control over data exposures and security breaches.
  • Business agility. The more visibility you have of your assets (e.g., location, configuration, usage), the faster you can change (subject to terms in applicable contracts), and the more quickly a business can transform.

  One of the goals of the ITAM Forum is for IT Asset Management to become a de facto business practice within every organization. One day ITAM will be as common and essential to any business as its marketing, HR, or IT departments. ITAM is an essential prerequisite for a modern, digitally-enabled business. If organisations only look to ITAM to conduct a post-COVID audit of their supplier risks, they would miss out on so much more.

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  About the author: Sherry Irwin is the founder of Technology Asset Management Inc. and trustee of the ITAM Forum.

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