Many members of your IT service management team started out in information technology and stayed there. But when everyone starts out in tech, it can preclude learning about concepts from the non-technical world that can be used to simplify IT service desk or IT asset management and make it better.
IT asset management techniques can pick from many techniques that were developed over long periods of time in fields like warehouse inventory management. Best of all, you can learn about what has been proven to work, and won’t have to do as much trial and error as the people who originally developed these techniques.
IBM Managing Consultant Dwight Stewart has been in tech for a long time, but earlier in his career, he learned about warehouse inventory control and from this has drawn parallels between managing inventories in a non-tech environment and IT asset management. In a recent webinar, he talked about these parallels, specifically about ABC analysis and how it can be used to improve asset management.
ABC analysis is a variation on the “80/20 rule” as applied to assets of any kind according to their value. It’s not an acronym, but a sort of grading system, with various assets classified and assigned levels of control and tracking, as follows:
- A items are high value items that are critical to an organization. These items may account for just 20% of the IT assets in an organization, yet account for 70% of the total dollar value of assets. In an IT setting, A items might include high-end servers.
- B items are important, but do not require as tight control as A items. They may account for around 30% of IT assets, but their aggregate dollar value only adds up to around 25% of the aggregate value of all assets. Examples of B items in an IT setting might be laptops or desktop workstations.
- C items are less critical still, however C items may account for half of all IT assets tracked and they only make up about 5% of the total dollar value of assets. In IT, C items might include things like keyboards and mice – things that if you ran out of, someone could go to Target and get a replacement with a few bucks from Petty Cash.
How Can ABC Analysis Relate to IT Asset Management?
It makes sense that your organization should focus its IT asset management efforts more closely on high-value, critical items, and worry less about low-value items that could almost be considered as consumables. For your high-value assets, you’ll want to track serial numbers and other designators, as well as location and ownership. For the low-value C items, you can probably get away with recording that “a mouse” was delivered to Jack’s cubicle and not spend time worrying about the serial number on that mouse. With tighter control and tracking of high value IT assets, mistakes are less likely to involve great expense or downtime.
ABC Designation Plus Barcodes Can Simplify IT Asset Management
One way to divide your total inventory into A, B, and C categories is to start with your highest value items, and keep adding slightly less valuable items until you’ve accounted for about 70% of your total asset dollar value. That’s you’re A category. Then, start with your cheapest items and add slightly more expensive items until you’ve accounted for around 5% of the total asset dollar value. That’s your C category. Everything else can go into your B category.
You can incorporate an A, B, or C designation into barcode or QR code procedures when inventorying assets, or when you bring them into your IT asset management system as they arrive at the loading dock. The A items will be assigned tighter chains of custody and more detailed tracking. You may, for example, be satisfied that a category B laptop is assigned to “Finance,” while your new A category server needs to be tied to a specific location and a specific “owner.”
IT asset management is a big task, and if you make a mistake, you’d rather that mistake apply to a $20 keyboard rather than an $8,000 server. The ABC analysis system, long used for inventory management outside the tech sector can provide a good template for your IT asset management system to use so that your most valuable, critical assets are tightly tracked and accounted for throughout their life cycles.
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