Case Study: Centralizing ITAM – Mecklenburg County Creates Centralized IT Asset and Procurement Division

By Matthew Newlon

In 2005, Mecklenburg County, North Carolina, consolidated all information technology (IT) purchasing and asset management into a centralized IT Asset & Procurement Management division (APM). This division consisted of an IT purchasing and contracts manager, IT buyer, and IT asset coordinator. I began working with Mecklenburg County a few months after the creation of this division, and was hired as the IT asset coordinator. This gave me the unique opportunity of experiencing and assisting in the creation of a centralized division. In this article, I will share my experiences. I will also detail the positive benefits that centralization of these services has brought to the County.

Failures of a Decentralized Approach

The creation of a centralized IT Asset & Procurement Management division (APM) was included in the process of consolidating all countywide IT services into one department, Information Services & Technology (IST). Before this consolidation, there was a blended IT organization throughout the county, with most departments having their own IT personnel. This caused many negative issues in regards to IT effectiveness.

Information was not shared between the different departmental IT divisions. Technology had begun to be developed in silos, rather than being developed and used countywide. Also, this blended service model created an environment of constant finger-pointing and arguments over IT services. One departmental IT group would blame another group for the failure or non-timeliness of a project’s completion and success.

It became increasingly difficult for the IT department to control the outcomes of projects. If these groups worked in a silo, or didn’t communicate effectively, then the IT department could be blamed for the failure of a project. There was no accountability for these projects. A lot of time was wasted trying to get these separate IT groups aligned with a common objective.

In addition, in this modern world of technology, there are many areas of IT specialization. These smaller blended IT departmental groups were beginning to try and specialize in all of these specific areas, which was very unrealistic. It caused these departments to have inadequate knowledge in many areas of IT, which only a large IT department could effectively manage and support.

Also, IT funding for the different county departments was not equal. A large department, such as the Department of Social Services, had more funds to allocate to new technologies, projects, and IT support than other less funded departments. Some of these less-funded departments were receiving “hand me down” IT equipment from higher funded departments, instead of having their own proper funding for these types of technologies.

Employee climate and satisfaction surveys were conducted every year in order to internally evaluate county departments and services. The majority of the surveys showed that feelings about IT services were “mixed,” and that there were many IT services that were rated as “needs improvement.” County management and department executives began to have concerns about the effectiveness of County IT services and the IT department.

Consequences of Decentralized IT Asset and Procurement Management

During this time, IT purchasing and asset management was carried out by each department individually. Many departments assigned these responsibilities as part-time duties for staff that were specifically trained in other areas of expertise. IT procurement was carried out by the finance or administrative divisions in most departments. Employees in these divisions did not have the technical knowledge and procedures to analyze the terms and conditions of software licensing and contracts, in order to prevent over buying or under buying of software. Also, because they did not have technical procurement training, processes were not put in place to leverage the proper IT hardware discounts. Countywide, it became very inefficient for non-technical employees to carry out IT purchasing. Many problems and issues began to arise because there was no countywide standardization enforcement of IT hardware. The County had standards, but there was no centralized IT procurement division to enforce these standards. IT support teams began to have too many different types of hardware to specialize in or service.

IT purchasing record keeping was hit-or-miss throughout the county. This made software licensing compliance on a countywide level extremely difficult to gauge and substantiate. IT Desktop Services did not have one point of accountability to contact in order to make sure that requested software installations were compliant with county purchases. They also did not have a group to contact specializing in software licensing, who would know what software applications required the purchase of licenses, and which applications could be installed without a license. Many times software was installed without approval of any software purchasing record keeping division. Because there was no procurement staff trained in the nuances of software licensing, the chances increased that full licenses were purchased when only upgrade licenses were needed, and that software licenses were over-bought because the terms and conditions of installation were not understood.

Because software purchases were done by each separate department, there was also no countywide software media library. In most cases, software media was held by individual county employees or was kept by IT Desktop Services technicians to hold for installations. This approach caused the over buying of software media when possibly only a software license was needed. Other possible consequences were the loss of media, having media taken outside the county and being installed on a non-county owned computer, or installing one licensed media package inappropriately on multiple computers throughout a division. Responding to software manufacturer audits was very difficult and time-consuming.

For example, there were many costs associated with the county’s last Microsoft audit. The IT department had to gather license purchasing information from 22 separate county departments. Many employee hours had to be used by each department in order to track down the actual amount of licenses installed, and the purchasing records to prove the legality of the county’s installations. Because these departments did not have procurement employees specifically trained in software license purchasing, compliance, and recordkeeping, many purchase documents could not be found. It was also difficult to determine where the licensed software was installed because software location inventories did not exist.

Inventory of IT hardware was also the responsibility of each separate department. IT physical verifications were not required so many location inventories were simply guesses. The county’s discovery tool only picked up equipment attached to the county network at a certain time, so many pieces were missed and much of the end location information was not timely or not specific enough for business decision making analysis. This made planning for computer refresh cycles much more difficult. Because each department kept its own hardware inventory, all of this information was gathered separately, and later pieced together, to analyze the data and decide what was needed for upgrading countywide applications, such as Microsoft Windows and Office upgrades. The decentralization increased the opportunities for the over buying of IT hardware because there was no countywide data to trigger redeployment of spare or unused equipment.

Gaining Control and Improving Services through Centralization

County management decided to bring in a consultant to conduct an assessment of the organization and to make recommendations for improvements to the delivery of IT services. The consultant was tasked with identifying the most appropriate IT structural model for the county and providing guidelines for that implementation. The conclusion of the study was a recommendation to centralize all IT services into one department, the Information Services & Technology (IST) department. The drivers for this consolidation were; a centralized IT philosophy, an enterprise and strategic IT focus, the integration of the currently separate IT systems, the enforcement of standards and uniform operating methods, IT cost and budget savings, creation of new and expanded services and a strong customer service focus.

The IT director believed that county management and executive commitment, responsiveness to the customer, and a high service level with established service level agreements, would be the keys to success for centralized IT services.

An Information Technology Executive Committee was created to begin planning this consolidation in 2003. In 2004, a task force was formed to develop a services business model, and the IT director designed the organizational structure of this new department. By 2005, IT services had been consolidated and the county began seeing the benefits of centralization. Unneeded staff and expenses were reduced due to the elimination of duplicate services. The consolidation of Desktop Services, Technology Service Center Team (Helpdesk), and Applications divisions brought many operational improvements. New technologies, such as virtualization, storage, and imaging, could now be efficiently researched and used, because now there was a large department in place that could allocate the appropriate expertise to these areas.

Funding for IT technologies began to come from a county enterprise technology reserve fund, ensuring that all departments received equal funds in order to purchase the proper technologies. Employee climate and satisfaction surveys were conducted again in 2009, and this time 95% of the surveys received rated IT services as “exemplary.” Finger-pointing and political squabbles were reduced because IT projects and services could be managed as one team, with one point of accountability. County management began to have very high confidence in the effectiveness of county IT services and the centralized IST.

Creating a Centralized IT Asset & Procurement Management Division

An integral part of this IT consolidation strategy was the centralization of IT purchasing and asset management. The IT director requested that an IST Asset & Procurement Management division be created in order to provide these services countywide. The IT director knew that the centralization of this division was an important factor for complete IT consolidation, and this was one of the first groups to be created.

In order to create the proper policies and procedures for a centralized IT Asset & Procurement Management division (APM), a highly trained staff was needed. Prior to the centralization of IT services, the Department of Social Services had begun using a member of its internal IT Desktop Services to fulfill and manage all IT purchasing and asset management for the department. To further this employee’s expertise and knowledge, the employee began training with the International Association of Information Technology Asset Managers (IAITAM), and also began training in North Carolina purchasing laws and statutes at the University of North Carolina’s School of Government. This made this employee a perfect fit for the original position of IT Purchasing and Contracts Manager. An employee who had previously purchased IT for the county’s area mental health department was brought into the consolidated IST in the role of the IT Buyer. This employee’s mandate was to be trained in North Carolina purchasing laws and statutes which ensured that all IT purchases adhered to the guidelines put in place by the state.

I was hired as the IT Asset Coordinator. It was imperative that I receive IT software licensing and IT hardware asset management certifications from IAITAM, in order to provide the county with knowledge of software licensing nuances and IT hardware asset management processes.

Once trained staff was put into place, the next step in creating a centralized APM from the ground up was to develop the procedures and policies necessary to be successful. Because IT purchasing and asset management were centralized into one division, this made management of IT assets from purchase to disposal a much more streamlined process.

It was important for the new division to use systems that IST already had in place. IST used a helpdesk ticketing system to track all customer requests which are called or e-mailed into the Technology Service Center Team (Helpdesk) through incidents and work order tickets. Because this process of contacting IST with IT related issues was so well known throughout the county, it was decided to have county employees to contact IST for IT purchasing quotes and requests. This change made it easier for county employees to adjust and adhere to the new IT purchasing procedures. When a request was received, the Helpdesk assigned the incident ticket request to APM. By using this system to process all IT purchasing quotes and requests, it was possible to track and report on the quantity of requests. It was also possible to create service level agreements for the requests to ensure that customer needs were being met in an effective and responsive manner.

Another important aspect of the IST consolidation was the movement towards an ITIL version 3 process model. By implementing these types of APM procedures during the division’s creation, the processes fit well within the service operation request fulfillment. The county’s ITIL Strategic Planning and Implementation Manager felt that APM fit nicely into the model because the division enjoyed and adhered to processes, which could feed information to other IST divisions that would be helpful for support and overall customer service.

From this point forward, APM reviewed all IT purchase requests and ensured that all requests complied with the IT standards put into place by IST. An authorization procedure was put into place using the county’s financial management system. If an IT commodity code was used for a county purchase, then APM’s IT Purchasing and Contracts Manager had to approve the purchase before it could be processed through the system. This approval eliminated much of the ghost IT purchasing in the county and helped to enforce the newly created IT purchasing procedures. It was also another step to ensure compliance with IT standards. As soon as the county had a division to enforce compliance with standards, the IST Desktop Services Manager noticed positive results. The use of IT standards assisted the manager to develop the highly trained staff. The staff had an opportunity to focus on training and earning support certifications for specific types of equipment.

Because only one centralized division processed all IT purchases, this division was able to create strong and long lasting relationships with IT vendors. Vendor scorecards to measure performance were implemented at the enterprise level. The result was the county received more IT discounts and cost reduced services than had previously been possible. The county’s buying power was increased allowing the county to leverage volume hardware discounts for computer refresh cycles. The county was also able to enter software volume licensing agreements with software manufacturers resulting in a reduced cost for individual software licenses for the separate departments.

The current IST helpdesk ticketing system included a basic Configuration Management Database (CMDB), which could also be used as an Asset Management Database (AMDB). Because this newly created division needed to use systems that IST already had in place, this system was modified to be a purchase and asset repository. The process began with the IT Buyer entering the IT asset inventory purchase requisition information into the repository at the time of purchase. When the purchase was received, the serial number and equipment warranty information was entered into the repository and attached to the proper purchase requisition. The IT asset is added to the county inventory immediately, initiating the asset management lifecycle for the asset.

Utilizing Partnerships through Unintrusive Procedure Improvements

One of the major hurdles that APM had to overcome was a lack of resources and staff to manage the IT asset location inventory. We turned this negative into a positive by creating and utilizing partnerships throughout the newly consolidated IST. Partnerships were created with the Technology Integration and Server Operation Teams, Network Services, and Desktop Services. IT hardware is shipped to these divisions, and then these groups provide APM with the serial number and warranty information for the hardware at the time of receipt. This information is then entered into the asset repository.

The process of getting the end location information for the assets to APM is done through the helpdesk ticketing system. These partner divisions carry out and monitor all of their work through this system. They create a work order for the installation of this type of equipment and attach it to the purchase requisition in the purchasing and asset repository, since this repository is part of the work order ticketing system. This work order is then assigned to a technician for the installation. It is mandatory to input the inventory end location information into the ticket before the ticket can be closed. Once the ticket is closed, the ticketing system has been modified to assign an auto-generated ticket to APM with this end location information. This information is then connected to the asset in the asset repository. APM and these divisions use this system for all IT inventory new installations and moves. Since this system was already being used by the divisions, it made the process of reporting inventory installations and moves to APM much more efficient for the groups and did not add many additional steps to their work processes. Once an inventory item is sent to the vendor who holds the county disposal contract, a ticket is assigned to APM with this information and the item is retired from the asset repository. APM compares this information to monthly reports received from the disposal vendor, to ensure that the retirement information is accurate. This completes the life cycle for the asset.

The IT Director realized the need for a countywide IT physical inventory verification project. Since this was such a large project, the IT director went to the executive management of the county to get buy-in from all of the departments. Once APM had top management support, we began to plan and carry out the county’s first exhaustive IT physical inventory project. APM did not have the staff to carry out such a large project or the budget to hire contractors to collect this information. We partnered with Desktop Services again to collect this information. Desktop Services provided us with all of the necessary end location information for the county’s IT hardware and APM entered this data into the asset repository.

The IT Purchasing and Contracts Manager compared the process of collecting the IT inventory information to painting the Golden Gate Bridge, saying “By the time you finish painting it, it is time to start painting again.”

In order to best utilize the Desktop Services technicians’ time, we decided to carry out rolling inventories for all future IT physical inventory verifications. The county has multiple locations in which inventory is kept and to keep the collection as smaller projects; a different location is inventoried every month. Employees with mobile assets are asked to bring in these assets on a specified day so that they can be physically verified as well. This approach ensures that each location is physically inventoried every year, but does not monopolize too much of the technicians’ time by trying to carry out the entire project at once. The Desktop Services Manager views this new responsibility as a positive addition to their work. Because technicians are sent to all locations for inventory verifications at least once a year, it gives the technicians a chance to get to know their customers better and assists in personalizing their services for each department.

Getting a Grip on Software Installations

Software license purchases are also entered into the purchasing and asset repository with end location information received after installation. The end location information is then connected to the asset in the repository, just like hardware. Once an employee contacts the Helpdesk to request the installation or transfer of a software application, an incident ticket is assigned to me, as the IT asset coordinator. This gives me an opportunity to verify the proof of ownership for the requested software license by checking the repository to ensure that the proper software license purchase records exist. If the license is verified appropriately, I create a work order to have the software transferred or installed. I then transfer the software end location information in the asset repository appropriately. If the employee does not have a license, then I assign an incident ticket to the IT Buyer in order to provide the employee with a quote for the requested application. Using this process ensures that software is not being installed improperly and increases the IT director’s confidence that the county is compliant with all software license terms and conditions as well as copyright laws. By using a centralized software license purchase requisition repository, I am able to assist the IT buyer by ensuring the proper licensing is purchased. For example, if an employee requests a new version of a software application which only requires an upgrade license because APM has a record that the employee is assigned a previous version, then I can make sure that a full license version is not incorrectly purchased for the employee. By having the time to research software license terms and conditions, I can also advise county employees on how specific licenses can be installed and prevent the over buying of licenses.

APM receives weekly termination reports from County Human Resources. If an employee is terminated, I have access to all of the employee’s software license records so that I can harvest those software licenses in order for the former employee’s manager to install those licenses elsewhere. Or I can create an unused license pool for the manager so that the licenses can be reassigned to another employee within the department in the future. This again prevents the over buying of licenses for a department, an example of another positive result of keeping a centralized repository of all software license purchasing records. I also keep all county-owned software media in an enterprise county software library. This step eliminates the over buying of media due to loss. It also helped to lessen the chances that media is installed without the properly purchased licenses.

Conclusion

We found that centralizing both IT procurement and asset management into one division made it much easier for us manage IT assets. Centralization of these two tasks streamlined our processes, which led to more effective IT asset life cycle management. The key factor we found that led to our success was teamwork. We depend on a strong team philosophy between the IT procurement side and asset management side of this division, so that we can properly assist each other in order to respond to our customers’ needs appropriately. With IT services centralized countywide, it was easier for us to develop and utilize partnerships within the new consolidated IST. It is also important for us to remain flexible in regards to our procedures and policies, as our customers’ needs continue to change and as our responsibilities continue to grow.

We feel we have had great success developing the division up to this point, but we still have many areas that we hope to improve. Some of our future plans include researching and investing in bar code technologies, carrying out the county’s first comprehensive internal software audit, and putting resources into a new CMDB/AMDB repository. Creating a centralized IT Asset and Procurement Management division from the ground up is a daunting task, which went well because proper planning, procedures, policies, and staff were implemented at the beginning.

For additional information, please contact Mecklenburg County Asset & Procurement Management at APM@MecklenburgCountyNC.gov.

Information for this article was gleaned from the personal experience of Matt Newlon (IT Asset Coordinator), with interview input from: Jerry Pinkard (IST Director); Richard Cook (IST Information Security Manager); Robert Howard (IST Desktop Services Manager); Dan Traweek (ITIL Strategic Planning and Implementation Manager); Lloyd Murray (IST Desktop Services Lead); Karl Beil (IST Purchasing and Contracts Manager); Amy Miller (IT Buyer)

About the Author

Matthew Newlon is the Asset Manager for Mecklenburg County Government North Carolina.