Reduce IT Costs – Increase Productivity

January 20, 2003 by admin

Carnival season is fast approaching in Germany, and the drinking songs are seeing a boom once again. “Who’s paying for this – who ordered that” are the questions that will be coming from the crowd. But the age-old problem of settling up correctly and fairly, so familiar to the happy revelers, is also well-known when it comes to drawing up a clear total costing and efficient economic activities. Most likely to be affected are IT service providers that were previously an internal IT service department or computer center of a large company, and have become independent. A study from 2002 conducted by the market research company IDC shows that there is a considerable amount of work to be done in this area. According to the study, of the 51 large companies surveyed in Germany, only around one third (36 percent) settle costs fairly based on cost factors.
Integrated solutions for IT Asset Lifecycle management, such as those from the SAP Alliance Partner syskoplan based on standard software such as SAP, can provide support here. The application is centered on an Installed Base of IT equipment, in which all IT assets are managed with specifications, configuration data, contract data, and information on locations and users. The Installed Base represents the information platform for all processes, such as order management, procurement, asset accounting, cost accounting, billing and central service management. The Installed Base is run as a configuration management database based on ITIL (Information Technology Infrastructure Library). ITIL goes back to an initiative by the UK government, and has since become something of a standard in IT service management. In addition to the management of assets, IT Asset Management involves configuration management for hardware and software. System changes are also continuously recorded in this way. The reason for such a comprehensive definition of IT Asset Management is that all key processes must be integrated in the computer center, so that it can work efficiently as a profit center and provide proof of services rendered.

How do businesses introduce IT Asset Lifecycle Management?

Implementation comes before application: most IT providers introduce solutions for IT Asset Lifecycle Management in a number of separate projects. Depending on the current business priorities, activities could first focus on settlement of performance, budget controlling, customer service, the centralization of IT purchasing, or another area. However, it is important not to view these focus areas in isolation, but rather to always take a holistic approach to an IT Asset Management Solution when designing the products and selecting the tools. In these projects, consulting partners act as the interpreters between the sales team and the technical experts in the company, and they enter the business processes. One central element during implementation is the creation of the Installed Base, which must be done at an early stage, independent of the focus area. Here, it is necessary to integrate technical information from system management – IBM Tivoli or Microsoft SMS, for example – with SAP applications. In this way, information about IT assets can be constantly updated. Integration is carried out with the help of the Network Object Administration Handlers (NOAH).

Initiate projects and budget costs

Once a company has decided on an integrated IT Asset Management solution, the process design takes center stage: it is necessary to draw up a solution concept across a few business process scenarios. These scenarios are end-to-end business process chains which put the individual process steps into an overall context. Typically, the complexity of a business can be described with between 5 and 15 carefully selected scenarios. Consequences such as organizational changes can be defined clearly with the use of a prototype. A coordinated project plan forms the basis of the final calculation. In a second step, companies implement the basic processes, and then the special processes, which may differ from industry to industry. The system is then rolled out in the subsidiaries and affiliated companies.

Reduce implementation costs – involve employees

The implementation costs depend on the size of the company and the degree of diversity, such as the number of stores. For a company with 2000 to 8000 assets, for example, syskoplan estimates a project duration of three to five months for implementation at 20 person days. The consulting firm can only carry out a detailed calculation of costs after an analysis of the particular company concerned. SAP experience in various departments of a company will have a positive effect on this calculation. Usually, SAP applications are already in use in Accounting and Purchasing. Often, however, the necessary experience is lacking for the Service Management side of the SAP system, for example for the creation of the IMAC processes on the terminals (IMAC: install, move, add, change). To help reduce costs, it is advisable to provide selected employees with training during the project phases. In many cases, the actual roll-out in the locations and affiliated companies can then be carried out without external support.

Money well spent

The operating costs for an integrated solution amount to 50 to 400 Euros per asset. This is an investment that leads to considerable savings, because it provides clear information for the first time on who needs which services, and on which activities were carried out. Often, simply identifying blocks of costs that are not assigned to a cost factor can result in savings. For example, during implementation of a Lifecycle Management solution for a medium-sized company, one consultant identified a Datex-P cost block that could not be assigned to any customer. This immediately resulted in a saving of around 15,000 Euros per year.
Ideally, IT Asset Management solutions are operated without additional personnel costs. One example of this can be seen at ZF Friedrichshafen AG, for which syskoplan implemented an application to bring greater effectiveness and professionalism to the Support department. Peter Banholzer, Manager of the Support Center user service at ZF says: “For us, the greater effectiveness and professionalism brought to Support and the resulting constantly updated documentation was the driving force behind implementing an integrated IT Asset Management solution. Thanks to the system integrated by syskoplan, we have been able to increase throughput at no additional personnel effort – a very positive side effect.”

Herbert Pfeifer

Herbert Pfeifer

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