The Evolving Face of ITAD – The Impact of a Growing Portfolio of Asset Types

By Ed Stukane, PlanITROI

Many would agree that advancements in technology have made life easier for most consumers, business employees and managers. Access to information is at our fingertips. Collaboration among co-workers, regardless of their locations in the world, is simpler than ever. Communications has improved dramatically and we take for granted that our smart phones will always connect to desired networks, and our images and data will be shared almost instantaneously.

Before we address what this tech device evolution means to the IT Director responsible for asset management and disposition, it’s helpful to step back for a moment and think about the device evolution means for today’s middle school aged children. Why? Because it is in those formative teenage years that our children really become tech savvy, and as managers we gain a good look at the future of work behavior. These students are writing papers based on research they have found online, they are emailing teachers seeking clarification to a question, they are collaborating with their peers, they are texting on smart phones as if it was an Olympic event and downloading apps left and right. When friends come to visit in person, or online, the video game consoles fly. The games are no longer elementary school learning tools. There are races to be won, enemies to be conquered and treasures to be gained.

These teens have technology expectations and those expectations drive tech usage behavior. Which is why, and rightly so, many of these teens are now beginning to assume they will have tablets, if they do not already, to work and play with once in high school.

Now fast forward a short six to eight years and this generation of future business employees will own even more sophisticated mobile devices. They will also assume they will have wireless access to company networks. More meetings will involve the corporate “face-time” like capability, and a smart phone will still likely be used with consistency, along with a tablet and a laptop. These new employees just might not be working in a central office and may be part of an increasing number of remote workers.

As we look at the future, enter today’s IT asset disposition manager. Fifteen to twenty years ago an ITAD manager was more concerned with simply making room for the new PCs that would be arriving. Asset lifecycle management was not a common term and disposition was equated simply to asset removal. Even formal recycling plans were not part of the ITAD lexicon, and asset value recovery was hardly known. Interesting how the responsibilities, and ITAD options, have evolved for the ITAD manager.

Data Security and Multiple Mobile Asset Types

End-of-life data security management has become more rigorous, even without the multiple devices moving about a company. ITAD managers have always requested that hard drives be wiped according to Department of Defense standards. Some enterprises are undertaking the data erasure procedures themselves, or asking that the data security be undertaken onsite. Still others are removing the drives before an ITAD services provider takes the equipment and requesting that drives be shredded onsite. Capturing the serial numbers for tracking and reconciliation purposes has become a more standard practice.

Mobile devices and BYOD in the enterprise are creating other data security requirements. In a survey conducted by Device Analytics, “83 percent of companies that allow employees to use their own devices in the workplace have policies that require those workers to install security software on their devices as an added layer of security. According to another of the survey’s findings—86 percent of the IT decision makers in the United States, United Kingdom and Germany said that their top concern about devices connecting to the corporate network is smartphone security.”

The Device Analytics survey also indicated that “almost half—47 percent—of enterprises that allow workers to use their personal mobile devices to connect to the corporate network have encountered some sort of data breach. In many cases, such data breaches were met with immediate changes in security policies—45 percent responded by further restricting data access rights, while 43 percent instituted requirements that employees install security software on their devices.”

ITAD managers now need to review the data sanitization protocols to be provided for all devices. They should understand how the smart phones will be wiped and how tablets will be data erased. Realizing that the procedures will vary among devices and the device models is important. Managers should make sure that the ITAD services providers have audited procedures, used acceptable and approved data erasure software and/or proven security wiping hardware devices that can wipe multiple drives at a time. Confirmations and certificates of data destruction should be expected.

For the devices that the enterprise does not own, the IT asset manager must still be heavily focused on data security requirements. Those data security requirements go beyond the obvious needs while the devices are being actively used and accessing the company network.

BYOD and Refresh Cycles

According to a recent survey by Forrester Research, “Seventy-eight percent of enterprises are instituting BYOD programs and sixty percent of respondents are including smart phones in BYOD strategies. Forty-seven percent include tablets and laptops.” This means that ITAD managers are not only tracking who has which devices, but which devices are owned by the enterprise and which are owned by the employee.

The days of just managing the PCs’ refresh cycle, which may have been once every three to four years, are over. The pace of change when it comes to mobile devices, and device ownership, is also significantly impacting the predictability of asset refresh cycles.

Consider the consumer purchase behavior as it relates to smart phones. Phones often turn over within two years. Tablets may utilized a little longer, but as we have seen with the iPads, when the next generation is released, the number of early adopters increases and the earlier generation of the tablets is moved into the disposition process.

Laptops are still primarily being refreshed on three to four year cycles. Desktops, which are shrinking as a percentage of all computing devices in an enterprise as laptops and tablets gain, are being refreshed every four to five years on average.

There is Money to be Returned on Today’s Retired Devices

Once an IT asset manager has all his/her concerns regarding data security and environmental compliance protocols addressed, they should turn an eye toward asset value recovery. In our mobile society mobile assets such as laptops, tablets and certain smart phones do hold more value in the secondary market then that 5 year old desktop

The maximum value for a laptop is obtained when it is fully refurbished, has a new genuine OS – primarily a current Microsoft OS such as Windows 7 re-installed, a new warranty, new support documentation and customer support. Laptops that move through a retail channel for asset value recovery always return more money to the enterprise than devices resold through wholesale channels. We are not speaking about $5.00 to $40.00 more, but often $80.00 to more than $120.00 per unit. Multiply that by thousands of units and the financial returns is significant enough for procurement managers to begin incorporating the ROI into IT financial plans.

With more tablets being provided to employees, IT asset managers are realizing that even more money can be returned. As noted above, tablets, particularly iPads are being refreshed on shorter time frames. The remarketing values of tablets resold with warrantees, are high, higher than most three year old laptops. Below is a recent screen shot of iPad2s being sold, with refurbished units, on Amazon. Note the narrow price differential.

Smart phones, particularly certain iPhone and Android based models as opposed to some Blackberry models, also represent an asset value recovery opportunity. The ITAD manager that may be responsible for the phones owned by the company should inquire with its asset value recovery ITAD services provider to obtain a valuation analysis for the smartphones. While they are at it, it would be wise to obtain a current and future valuations analyses of all IT assets under management.

In summary, ITAD as a responsibility within an enterprise continues to evolve. More devices, more security requirements, increased environmental responsibilities, and the knowledge that greater financial returns can be had, will continue to drive how asset disposition is approached. Add on top of it is the BYOD that is here to stay and one can understand how ITAD efficiencies and benefits will be realized by those enterprises where ITAD has become increasingly more proactive and less reactive in nature as part of IT operations.