In the absence of Business Intelligence supported by insightful Business Analytics, making important decisions is like throwing darts while blindfolded, hoping they will hit the target. Chances are you are going to miss, and this will have a negative impact on your business.
Business Intelligence (BI) and Business Analytics (BA) provide critical information about how your organization manages and optimizes its IT assets, and will guide you to make the most prudent decisions for your business. The problem? Many ITAM programs fall short with respect to BI and BA, and therefore do not produce the information organizations need. What is the root cause and what can organizations do to change this situation?
The Perfect Storm
IT Asset Management has never been easy. Recent industry trends such as the adoption of virtualization and the constant shift in software licensing models have compounded the ITAM challenge. These trends have aligned to create a condition of perpetual risk, or The Perfect Storm.
Revolutions in Technology and Vendor Reaction
Technology is changing more rapidly than ever, and these changes impact how vendors sell and license hardware and software. At the forefront is the adoption of virtualization, which renders obsolete the concept of “one machine, one license,” and facilitates much easier and more rapid deployment of software. Hardware vendors have accelerated development of technologies that capitalize on virtualization, pumping up memory and cores to handle growing virtualized workloads. Cloud computing and Software-as-a-Service (SaaS) models have similarly complicated measurement of software deployments, with some licenses based on per-user or per-device, and still others defined as “enterprise.”
In order to be compensated fairly, software vendors are defining and implementing new licensing metrics that are by necessity more complex as the licenses capture the value their customers derive from their products. So as technology advances, licensing models continually change; one leading software vendor made eight changes to license terms and conditions in less than two years.
How can organizations keep up with these changes? In a climate characterized by ever-evolving technology, the velocity of change makes it difficult for organizations to remain current and compliant, and vendors capitalize on these revenue-generating opportunities.
Because companies can easily spiral out of compliance without even knowing it, vendors have been performing more and more software audits in search of “low-hanging fruit” – non-compliance situations that provide immediate revenue without having to sell “net new” licenses. According to Gartner, Inc., 40% of all mid-sized and large businesses can expect an external software licensing audit before the end of 2011. In other words, every organization is at risk and should be equipped with accurate Business Intelligence and Business Analytics on their IT assets.
The Gap in ITAM Programs
ITAM tools such as auto discovery, software license management, contract management and the asset management repository can only do so much in terms of generating data, and should represent only 20% of your ITAM program. The other 80% is process, which is largely managed and run by people.
For example, auto discovery can locate a virtual instance, but can it identify the virtual cluster that the server belongs to? If not, your organization may be licensing inaccurately and could be well under-deployed, which puts your company at great financial and legal risk. People are a critical ingredient for managing your overall ITAM Program.
Business Intelligence and Business Analytics
Having access to accurate information in real-time helps your organization make pro-active decisions that will impact your business in a consistently positive way. It’s the combination of Business Intelligence and Business Analytics that provides your organization with the detailed analysis it requires. How do you set up your ITAM program to produce this analysis?
First, let’s review the definitions of Business Intelligence and Business Analytics, and differentiate between the two. Business Intelligence (BI): BI refers to computer-based tools and techniques used in identifying, extracting and analyzing business data. BI provides historical, current and predictive views of business operations.
To further illustrate, here are some examples of the types of questions that BI can answer for an organization.
- What percentage of the software licenses in our enterprise agreement have been burned down?
- How many server clusters do we have?
- Are we harvesting and re-using software licenses when hardware assets are decommissioned?
But no matter how thorough, Business Intelligence alone cannot support good ITAM decisions.
Business Analytics (BA): BA refers to the skills, technologies, applications and practices for continuous iterative exploration and investigation of past business performance. BA is the subset of BI based on statistics, prediction and optimization, and provides insight to drive business planning. BA is what people bring to the process.
To further elaborate, here are some examples of the types of questions that BA will answer for an organization.
- What are the recent IT asset buying patterns?
- What type of hardware do we need for our server farms?
- How much budget do we need for our enterprise software contract renewal?
BI does not always provide all the information we need, as it is largely based on what tools bring to the process. You can’t build the human factor into the tools; certain interpretation and analysis must be made by people. The bottom line is that BI and BA must be married to produce the detailed analysis needed to support good business decisions. Let’s take an example of your company launching a new application platform. An important decision must be made – which hardware platform will give you everything you need and be the most cost-effective?
Analysis and trending are required to make the best decision possible. Who are the top vendor candidates, and which platform will meet all the requirements while being the most cost-effective to license? If you analyze your licensing cost across the top three hardware manufacturers, the differences can be significant and eye-opening.
In the absence of analysis and trending, making this important decision would be like throwing a dart blindfolded, with just a slim hope of hitting the target.
Let’s look at another example of how the combination of BI and BA can help your organization make pro-active decisions and stay ahead of the curve.
One of your major software vendors has announced a new licensing model. The first step is to understand the change in licensing, and then analyze what software licenses you have today and conduct a conversion analysis. What will the conversion mean to your organization? Are the existing contracts favorable for your organization, or are you going to have to pay more to the vendor?
Having information at your fingertips about new licensing trends, software deployment and usage would enable your organization to stay ahead of the curve and save money at the same time.
What can you do to marry BI and BA within your ITAM Program to improve the quality of the decision-making process?
Get Your “House” in Order
Have you ever bought a house, or know someone who has? Before purchasing a home, it is important to assess everything about it and identify any problems or defects that need to be fixed. You hire a home inspector, who meticulously examines and evaluates the condition, discovers safety hazards and shortcomings, and prepares a detailed report on the findings. You work with the seller to produce a plan to repair the defects. Then you repair the house, move in and maintain it.
Much like the home buying process, to ensure that your ITAM process and tools are generating good Business Intelligence and strong Business Analytics, you need to thoroughly evaluate, plan improvements and execute your plan. This process is often separated into five discreet steps:
Assess your existing ITAM Program. The first step is to evaluate your current ITAM program to understand where you are today and how your processes and tools must be modified to provide BI and BA. Evaluate people, process, policies and tools. Through this assessment you will gain a clear understanding of how IT assets are tracked, managed and optimized. The results will serve as the foundation for determining where you need to improve your program.
- Analyze your findings. The second step is to determine what needs to be improved in your ITAM program based on your discovery in the assessment. You identify existing inefficiencies, gaps and risks in people, process and technology. Do you have dedicated Business Analysts who are focused on interpreting and analyzing data produced within your ITAM Program? Do the processes built around BI provide the Business Analysts with enough information to perform analysis that leads to good business decisions? Through this second step, you will gain an in-depth view of your issues: risks and gaps in how hardware and software are tracked, managed and optimized. The findings serve as the foundation for where you need to improve.
- Design your Future State ITAM Program. The third step is to design a detailed playbook outlining how to improve process, tools, technology, organizational job functions, data and governance. This detailed plan will provide the methodology by filling in the missing links to avoid future gaps and risks in how assets are tracked, managed and optimized.
- Implement the solution. The fourth step is to execute the playbook. Implement new and revised processes and execute recommendations on the use of tools, as well as organizational and staffing changes. After executing the plan, your organization will benefit from a greatly improved ITAM program with new efficiencies in all areas. The new efficiencies will include a focus on the people factor and the marrying of BI and BA within your ITAM program, leading to better business decisions and cost savings.
Maintain your ITAM Program. Finally you will need to maintain your program. You can go it alone; however some organizations choose to outsource their ITAM program to a third party who can manage it in the cloud. This reduces costs in hardware, software and people.
What are the results of a sound ITAM program? Visibility into all business initiatives that impact IT assets such as mergers, acquisitions and divestitures, compliance, audit, risk management, virtualization and consolidation, and capacity planning, to name a few. The Business Intelligence and Business Analysis derived from your “new and improved” ITAM program will help your organization make better-informed decisions. Instead of throwing darts aimlessly, you will be hitting the bull’s eye every time.