Classification of business assets — Basic overview and properties
In simple terms, an asset is a resource controlled or owned by a corporation with the purpose of generating cash flows. Any form of capital that aims to add value to the business process falls under the category of current, non-current, physical, and intangible assets. Generally, current assets include resources that can be converted to cash easily such as stock, marketable securities, and office supplies.
IT equipment deployed in an organization also forms a part of current assets. In contrast, non-current assets comprise long-term goods which cannot be exchanged for cash easily; like land, buildings, machinery, and trademarks. Classification of capital plays an important role in determining the net worth of a company. In high-risk situations, firms can easily estimate solvency if they have an accurate database. Moreover, dividing the asset stock into operating and non-operating sections allows organizations to predict revenues and overall productivity levels.
One way to ensure streamlined business growth is to implement asset-specific management routines. In order to do this, many organizations identify and track IT assets in a robust manner. When done in the correct way, ITAM can have a direct impact on lowering hardware and software costs. Having a sense of control over IT equipment enables organizations to set a standard and achieve higher efficiency and reliability. For this, companies can classify IT assets into the following main categories:
- Hardware and software
- Communication networks, servers, infrastructure, and applications
- Mobile devices
- CCTV alarm systems
- Telephone circuits
With multiple types of devices to monitor, businesses mainly focus on collecting metadata like vendor, service provider, licensing, and procurement information. Getting maximum returns from any type of asset — be it IT or non-IT, can be achieved by establishing a clear management strategy. The choice of software that companies select can also facilitate a smooth deployment process and uncover the true value assets deliver.
Guide to compliance for IT and non-IT assets — What’s different?
In order to survive competition in the industry, companies have to meet the quality standards set by the regulatory bodies. Respective authorities have laid down certain rules that define how particular assets are to be utilized.
Starting with non-IT resources, let’s discuss common compliance rules for different market sectors.
- Taking the example of hospitals, the Healthcare Information Portability and Accountability Act (HIPPA) specifically asks organizations to designate a compliance officer to track and develop staff and equipment. To do this, healthcare institutions are required to implement medical coding for all instruments and tools deployed. Such practices help to maintain a uniform database. Moreover, hospitals have to schedule training sessions to keep all staff and doctors updated with the latest trends in the industry.
- Moving on to the construction sector which deals with utilities, property, and transport, compliance means occupational and health safety. Sometimes it also covers the manufacturers and suppliers of goods and services. As construction products are subject to rigorous testing, it becomes essential to comply with government requirements and receive certifications to function without the risk of unexpected inspections.
When it comes to IT assets, organizations have to monitor some key metrics to remain compliant. If not implemented in the correct manner, ITAM can host itself for serious penalties and potential fines from technology vendors. A major component of IT asset compliance is license management. For different types of software installed by a company, it has to have legal permission to use it.
Hardware devices should meet the necessary certifications as well. Clearly defined in the manufacturer’s manual guide, basic certification symbols help you decide how an appliance can be used. Legal compliance requirements are absolutely necessary and have to be fulfilled by both users and manufacturers.
Benefits of a cloud-based management system
Despite having different business management techniques, deploying cloud-based software has numerous benefits for both IT and non-IT assets. Being a popular choice amongst companies, automated programs help raise overall operational efficiency and enable them to achieve a higher rate of return.
Here are a few advantages of investing in a software system for tracking assets:
- Ease of access: Being instantly connected to the cloud lets you access content from multiple devices — anywhere, anytime. This means having all information at your fingertips during meetings and conferences. It also eliminates the need to be connected to a particular server at all times at the workplace.
- Improved collaboration: All asset-related information gets uploaded on a single platform on the cloud. By providing a centralized database with easy sharing of documents and folders, the management software aims to improve productivity levels.
- Reliable and secure: Companies can easily store important business information on the cloud because of its supportive backup systems. With a reliable security measure, you can even lock down stolen laptops or other devices by simply changing passwords.
- Cost savings: Outsourcing your cloud-managed services is a smart way to reduce costly network and maintenance bills. Housing an internal software house can end up being inefficient and a burden on the accounts as well.
Catering to different assets — ITAM vs asset management strategies
Mapping out the interplay of multiple resources can get quite complex, which is why organizations choose to categorize assets for streamlined management. One distinct categorization can be made between IT and non-IT assets. Doing this helps companies design and lay down appropriate measures to optimize utilization. Even though a simple asset management process covers prominent modules, there are some additional factors to consider when it comes to IT devices.
Let’s discuss how businesses can incorporate these features to cater to both IT and non-IT assets:
Barcode tracking vs auto-discovery
Hosting various capital resources for each department is an excruciating process that if not done in the correct manner may result in loss and theft. For this purpose, cloud-based software lets companies design unique labels for every type of equipment. Tags can be classified according to the function of equipment, a project, or the manufacturer’s details. Such information on the back of the tools helps to enter useful characteristics into the system.
While working with a simple asset management system, you can maintain logs of tools deployed by the company. This works best for fixed assets like furniture, machinery, and supplies. Moreover, firms can track locations by adding check-in and checkout destinations. Such practices enable real-time data and improve visibility into daily operations.
In contrast, when it comes to ITAM, software programs offer auto-discovery for all sorts of tools. What this basically means is that organizations can probe the system to identify all assets used within a network. Mainly including hardware devices like computers, laptops, printers, and software installed. By leveraging the management program to capture accurate information in real-time, companies can eliminate the need for manual data entry to the service desk. Quick discovery saves the effort spent looking for IT devices and lowers retrieval time in case of ghost assets.
Asset lifecycle vs software license management
In order to ensure the optimization of all capital resources, it is critical to monitor them throughout different phases of useful life. A key process within asset management is the precise understanding of the four stages of equipment and inventory lifecycle:
- Planning: Listed as the first step, calculated planning allows companies to verify requirements. This is done based on the existing asset base and its potential to meet service delivery needs. By organizing a complete inventory assessment, organizations are able to identify excess or under-performing assets. Regular inspections minimize untimely stockouts and ensure resource availability for daily functions.
- Acquisition: For a cost-effective procurement plan, companies should lay down their budget limitations before the acquisition of new assets. By taking into account annual expenses, firms can then decide which tools are most appropriate for business activities. Once a new stock item is bought, the first step is to record it in the official database for future reference.
- Operation and maintenance: After procurement, assets need to be installed for use. As soon as the equipment is up for operation, companies should direct their attention towards its maintenance. Frequent inspections and preventive service and repair plans should be prioritized on the asset management agenda.
- Disposal: After an asset has completed its useful life, it can either be disposed of or wherever possible can be sold at salvage value. Timely disposal is very critical in order to lower risks associated with frequent breakdowns. Instead of paying high maintenance costs, companies should consider selling off old equipment.
While the above four stages generally cover lifecycle management for non-IT assets, there are a few additional aspects that fall under ITAM.
The majority of organizations deploy multiple types of hardware to run daily tasks. Each component comes along with a warranty with specific terms laid down by the manufacturer. Sometimes organizations end up paying extra for extended warranties to qualify for well-protected items for a longer period of time.
Now imagine, losing all this information without a single trace of any vendor details. For this reason, ITAM software allows you to track warranties so that firms can renew them to retain security. Similarly, for IT software programs, an ITAM solution lets companies renew licenses before they expire. License and warranty tracking lets organizations avoid security risks and operational disruptions.
IT vs non-IT asset management key metrics
For the successful execution of daily business tasks, organizations define a few key metrics to record operational efficiency. But how can this be done? Depending on the type of capital resources and their utilization trends, you can establish principle indicators and follow them throughout the year.
A simple asset management system requires firms to monitor the following:
- Assets ‘active’ without inventory
- Assets ‘inactive’ with inventory
- Assets without a lifecycle status (used vs retired)
- Demand forecast accuracy
- Order cycle times
- Inventory turn over
- Carrying costs of inventory
- Serial numbers that have gone bad (missing, duplicate, blacklisted)
While these indicators generally cover all aspects of optimal asset usage, there are some extra metrics to consider when dealing with IT hardware and software. Incorporating these features into an IT asset tracking software will provide real-time data and improve visibility:
- A number of unnecessary or unused maintenance or support contracts (hardware, software, and telecom).
- Licenses and devices redeployed or upgraded as compared to the ones newly purchased. This helps to determine the difference in costs of separate vendors.
- Percentage of hardware leases renewed at or before the lease date along with any buyout negotiations which adds value when compared to monthly payments.
- Successful elimination of license purchases and non-standard equipment through policy enforcement.
- A decrease in cycle times for planning and executing software licenses, warranty, and maintenance support renewals.
Both large organizations and small medium-sized businesses deploy a wide range of assets to carry out streamlined workflows. Optimal utilization often results in a high rate of return on investment (ROI) and allows companies to expand even further. But to achieve this target, organizations should precisely design and implement asset management strategies.
Catering to both IT and non-IT assets can help firms increase operational efficiency and gain higher productivity levels. Having access to an accurate database lets you generate in-depth analysis reports. You can also request performance indicators for particular assets. A thorough examination of these documents allows you to identify areas of weakness and set future goals. A customized management plan that incorporates individual asset requirements enables companies to meet their targets in a much more effective manner.
AssetSonar is a leading IT asset management software with auto-discovery and integrations for better asset tracking. It allows companies to track their devices by putting in place a complete solution. Sign up for your 15-day trial today!