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  IT Disposal Best Practices for Maximum ROI

  
  Jeff Guthier 8:20 am on October 20, 2009 | 0 Permalink | Reply
  

  Part 3 of a 3-part Series

  • Proactive Asset Life Cycle Planning -Leverage the ITAM processes you currently have to streamline your ITAD programs.  ITAM solutions begin with an Asset Profiler that allows the IT Manager to record the “birth” of the asset into the company network of assets.  This profiler will then proactively monitor the changes to that asset as it evolves and goes through upgrades and maintenance.  This is business intelligence that enables the IT Manager to remain in control of the network and strive for that .9999 uptime. That same proactive approach to maximizing ROI on capital expenditure naturally extends to IT Asset Disposition (ITAD).  In fact, in today’s economy, it is necessary to have the business intelligence for planning the decommission of your assets based on current remarket values, technology refresh roadmaps and ability to supplement capital expenditure budgets for acquisition of new assets.  The data required to do this already resides in your ITAM database.  It simply needs to be looked at from an ITAD perspective, and managed with equally powerful and easy to use tools to support your business models and decision making.
  • Know the Value of your Assets before you Decommission -IT Managers should be able to sit down with their CFOs knowing the financial impact of asset tech refresh and decommission.  This includes current book value or lease buy back value as compared to current remarket value.  All laid on top of depreciation curves to identify the best point in time for replacing your assets.
  • Know the Assets that fall below your Preferred Technology Curve -Dynamically monitor your assets as they are upgraded and maintained against your preferred technology curves.  Know which assets are lacking processor speed, disk capacity, memory, or anything quantifiable that would influence a tech refresh decision.
  • Know in advance if you will Remarket or Recycle your Asset – By combining business intelligence on market valuation, book value and technology curves you can proactively plan your assets for one of two options:  Remarket or Recycle.  This greatly simplifies your downstream ITAD requirements and puts control of asset ROI profitability back into your core processes.
  • Remarket assets yourself in a Trusted B2B Community -Maximize your ROI on assets with market value by utilizing a closed B2B community of Sellers and Buyers.  Buyers that are not brokers or auction site dwellers.  Your trusted high return buyers should be value added resellers, integrators and warranty repair providers that have a business need and revenue model to purchase your asset at a premium.

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  Common Weaknesses in Today’s ITAD (IT Asset Disposition) Processes

  
  Jeff Guthier 7:44 am on October 7, 2009 | 0 Permalink | Reply
  Tags: IT Asset Disposition (2), ITAD (2), recycling, remarketing

  Part 2 of a 3-part Series

  • ITAD Processes are Reactionary – They are not the core competency of the company, so assets come out of use and are moved to the path of least resistance; internal storage, storage off-site, storage at consignment house. Once you decommission an asset without a plan to maximize the ROI, you are already headed down a process of increased overhead and costs to your company.

   • ITAD Processes are Redundant – Consignment models are the most common ITAD service offering. The very beginning processes force redundancy for companies to log the assets they are sending to a consignment house, where the first step is to inventory the assets and report back any discrepancies. Then both companies maintain an on-going inventory of those assets to their final disposition.

  • ITAD Processes are non-Transparent – The true overhead costs of consignment programs is not known to the owner of the asset. Final ROI of the ITAD program becomes blurred in the cost to inventory, tear down, recycle and maintain proper documentation. The recovery value of recycling or remarketing is often settled via a back end revenue share after the cost of doing business. The financials are easily and quickly distorted leaving the asset owner knowing they could be doing better, but not sure how. The Broker will provide the asset owner with a seemingly easy way to dispose of assets by offering pennies on the dollar for a pallet or truckload of assets. The asset owner doesn’t know the true value of their assets, but the Broker knows exactly which “golden nuggets” on that pallet or truck are going to yield high ROI.

  • ITAD Processes are Fragmented – A complete ITAD program may require the consolidation of several downstream partners. The consignment house uses a local recycler which uses a national refiner. Each time the asset changes hands it enters into a different tracking and reporting process that somehow must be maintained in the original asset owner’s back office systems. The internal IT and document control to manage this is another cost of the program.

  Stay tuned for Part 3 of the series, Recommended Best Practices for ITAD

  Visit http://www.servoterra.com to see how they’ve addressed these common weaknesses with a new SaaS solution.

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  What is ITAD and how big an issue is it for companies?

  
  Jeff Guthier 3:48 pm on September 30, 2009 | 0 Permalink | Reply
  
   

   Part 1 of a 3-part series 

   “IT Asset Disposition (ITAD) is a means for the proper disposition, removal and recycling or remarketing of assets, while ensuring compliance to local and national data security and environmental regulations.”

  This is a significant issue for companies of all sizes and in all industry verticals as it is not their core competency and is considered a sunk cost just to maintain compliance.  They are often left to create internal processes that tie to ITAD service partners and then staff to support those programs.   Companies are good at IT Asset Management (ITAM); managing acquisition cost, maintenance and uptime of their IT Assets.  They usually have solid data security policies and programs in place, even if it means removing hard drives prior to the asset leaving their possession.  And, they are aware of being environmentally and socially responsible.  These are all core to maintaining a sustainable business. ITAD becomes secondary and reactionary.

  Having first learned of RoHS and WEEE as a member of a leading mobile phone supplier’s Global Environmental Team, it was apparent that legislation and responsibility placed on the OEMs for take back and tracking of eWaste was creating a large, yet highly fragmented, industry for ITAD.  It was equally clear that large OEMs were more concerned about brand image and the negative PR associated with their equipment ending up in landfills across the world, then they were with the cost to maintain take back programs and implementing 100% destruction and recycle policies.   It occurred to me that a properly maintained “reuse” program could help off-set some of those costs and have a larger impact on protecting the environment.

  A colleague of mine  (now COO/Co-Founder of ServoTerra) had since moved on and ended up at a local California certified collector recycler of eWaste.  He had seen the industry and market potential and was brought there to take a local brick and mortar based collection facility into the board rooms of large OEMs and Contract Manufacturers to build a global reach including WEEE take back programs and remarketing of assets.  I joined him there to develop the back office processes and infrastructure to support an operation on that global scale.  This is where I learned the just how fragmented the offerings are in ITAD from Consignment, to Broker, to OEM Trade-in programs and the many challenges of linking those processes to downstream recycling and refining to include data security and certificates of destruction reporting. 

  Stayed Tuned for PARTS 2 & 3 to include common weaknesses in todays ITAD processes and Recommended Best Practices.

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  IT Financial Management and it’s Role in the Asset Life Cycle

  
  Jeff Guthier 1:49 pm on September 21, 2009 | 1 Permalink | Reply
  Tags: Asset Tracking, IT Asset Disposal, IT Asset Management, IT Financial Management, ITAD (2)

  A question was recently asked in one of my online communities, “how common/important is it for an organization to align it’s IT asset management (asset names, tags, descriptions etc…) with controllership depreciation schedules?”

   An astute consultant argued that it was very important and commented that if you are correctly tracking the receive date of the IT asset, it is very easy to track the depreciation schedule in most cases. Knowing this makes it easier to perform global adjustments to assets within the database. Before disposal, one of the entry criteria should be “has the asset been financially depreciated” and either store, reuse or dispose of the assets accordingly. He also added the following questions an asset manager should be able to answer:

   The age of the current IT Assets (by platform/model)?

  • The ability to report and identify “Where” the Asset is within its expected Lifecycle. This is key for future IT finance budget planning.  Maintaining this attribute also allows for the close collaboration between the cross-functional groups of Procurement – IT Finance and Accounting and as a result places the IT Asset Management team in a stronger SOX supportive role where it should be.

   While I agree absolutely with the consultant’s comments, there is one piece missing in this scenario. The actual final asset life cycle management piece is knowing the current market value of the used asset and leveraging that against the depreciated value to maximize the replacement ROI of the asset. This brings the Total Cost of Ownership to its natural conclusion and enables the IT professional to bring value added decision making to the CFO and CPO.

  Forrester recently published a report finding IT Financial Management Software to be the next fastest growing market in this space.

  “Forrester defines IT financial management as:  The discipline of planning, budgeting, monitoring, and controlling the use of a firm’s total IT budget (operations/maintenance and new projects/investments).  IT financial management software provides an application that allows companies to support and automate the process of IT financial management. This is done by applying general cost accounting principles to IT.

  The phenomenal growth of the IT Infrastructure Library (ITIL) as the de facto standard for IT service delivery and IT service support processes has raised the bar for internal IT department process maturity considerably. Most internal IT departments today can be considered to be in the stable stage, rather than the chaotic stage of a few years ago. The obvious next step for IT then is: Run IT like a business, just like service providers do — and that’s what IT financial management is all about.”

  ServoTerra addresses this need by providing out of box, forward thinking solutions. Asset owners are enabled to make value added business decisions which impact all stake holders throughout the corporation. We extend best practice requirements from ITIL into the ITAD arena. Our application completes the necessary enterprise suite of solutions around asset acquisition, asset management and final asset planning for profitability and disposition. We mitigate risk by connecting the asset owner directly with the buyer or recycler/refiner as the asset is being decommissioned; eliminating the changing of hands through mid-level services in the ITAD (IT asset disposal) space. So, the risk vs. reward calculation becomes more about control within world class business processes and decisions and not as much about finding gold nuggets.

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