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Metrics for ITAM – Measuring Magnitude, Value, and Results

By Sherry Irwin, Technology Asset Management Inc.

ITAK Volume 6 Issue 8

 

One of many lessons learned over more than 25 years as an IT asset management (ITAM) advocate, educator, and consultant is the importance of metrics.  As with most things in business, you can’t manage what you can’t measure.  Lifecycle management of IT assets, licenses, contracts, vendors, and related financials – commonly referred to as IT asset management (ITAM) – is no different: metrics are a critical factor for ITAM success.

 

Metrics enable an organization to quantify and demonstrate:

 

  • Magnitude, as needed to understand work effort and to ensure sufficient resources. ITAM budget and staffing for an organization with 5,000 workstations will be less than for an organization with 40,000 workstations
  • Results against the organization’s ITAM objectives and stakeholder expectations
  • The value of the ITAM function, based on results achieved
  • The effectiveness and efficiency of the ITAM function. It is possible to be successful in meeting the organization’s ITAM objectives (results), but not necessarily in an effective or efficient manner

 

Additionally, metrics are needed to:

 

  • Gain executive and stakeholder buy-in
  • Monitor progress and results
  • Identify problems and opportunities for improvement
  • Justify additional resources
  • Compare against other organizations

 

Typically, metrics fall into one of five categories:

 

Types of Metrics
1.     Quantity How many do we have?  How many do we need?  For example, assets, contracts, people
2.     Financial What is the cost and value?  How much money was saved or avoided?  What is our comparative spend? (e.g., against budget or peers)
3.    Compliance What is the level of compliance in a specific area?  For example, policies, contracts, licenses, regulations
4.    Quality How good was the end result?  For example, as to completeness, accuracy, timeliness
5.    Duration How long does it take to achieve a desired result or perform a specific task? For example, to fulfill an approved requisition for software

 

In applying metrics to ITAM, I recommend that organizations:

 

  • Identify and obtain consensus on the organization’s ITAM objectives, prioritized if possible
  • For each ITAM objective, select two or three metrics in the applicable categories (not all categories will apply to all objectives); be sure to select metrics that are achievable with reasonable effort
  • Establish a baseline measurement for each metric
  • Establish a method and accountability for ongoing measurement and analysis/reporting
  • Establish accountability for taking action on reported results
  • As ITAM expands and matures, change or expand the metrics as appropriate

 

Note that, in defining and applying metrics, it is important to differentiate between the means to an end result versus the end result itself.  For example, an accurate asset inventory is a means by which to facilitate more effective IT support – an end result that has value to the organization; the inventory is not an end result in and of itself.

 

Representative metrics include:

 

Magnitude: Number of platforms

Number and types of assets

Number and types of contracts: total, per vendor

Number and classification of vendors

Number of requisitions, purchase orders and invoices

Number and involvement of internal clients

Asset complexity: Commodity versus specialized; services versus products

Frequency and number of asset changes

 

Results and Value: Comparative spend:  Against budget, past expenditures, business case, contract, peers

Cost reduction/avoidance: For specific portfolios and transactions

Savings/cost avoidance by redeploying assets

Level of license compliance: overall or for specific products/vendors

Asset utilization rates

Time to provision/deprovision assets

Client satisfaction as to product/service delivery

 

Effectiveness and Efficiency: Percentage of assets acquired via standard procurement process

Time to provision/deprovision assets

Asset database quality: Accuracy, completeness, timeliness; frequency of manual corrections

Percentage of assets for which installation data available

Percentage of assets for which usage data available

Percentage of assets compliant with product standards

Percentage of product titles for which license documentation exists

Time/effort to conduct a license compliance audit

Number of functionally redundant products

 

While requiring some up-front effort, such metrics will go a long way to obtaining and sustaining support for your ITAM program, at all levels in the organization. Organizations that have had the greatest ITAM success have proactively defined, tracked, analyzed, actioned, and improved on an evolving set of metrics that demonstrate value and allow for continuous improvement as the ITAM function matures.

About Sherry Irwin

Sherry Irwin, founder (in 1995) and President of Technology Asset Management Inc., has over 30 years of experience in IT asset management (ITAM), including license, contract and vendor management, across a broad spectrum of industries. She is widely recognized as a pioneer, expert, educator and advocate in this maturing discipline.

As an advisory consultant and mentor, Sherry advises clients on ITAM best practices, with a focus on minimizing costs, minimizing risks, and maximizing benefits related to IT investments. She also conducts a series of educational workshops and seminars on various aspects of IT asset management including ITAM strategy and program development, software asset and license management (SAM), and contract management and vendor management (CVM).

In addition to her consulting and education practice, Sherry is also:

* Founder (1992) and chair of the Canadian IT Asset Management Users’ Group (CITAMUG), a forum in which to share ITAM knowledge and influence industry practices.
* An IAITAM Fellow, recognized as an industry leader and advocate.
* An Accredited Training Organization (ATO) for selected IAITAM courses.
* A Canadian delegate to ISO/IEC 19770 (Software Asset Management) standards development.
* An advisor (TAC Expert) to clients of The Advisory Council (TAC).