Using Technology to Control Technology

ow many computers does your agency own? How about fax machines? How many copies of Microsoft Word or whatever word processing software is standard for your organization? How old is the average PC?

If your managers cannot answer these questions with precision, you work for a typical agency. For many agencies, information technology represents the largest category of assets, but little is known about those assets. Equipment dies and is replaced without much notice, upgrades are routine and unmemorable, and items are bought locally at dozens of locations nationwide with haphazard record keeping.

The situation is hardly better in the private sector. Large corporations routinely misplace hundreds of PCs, misjudge the amount of fees they
should be paying for software licenses and contract main-
tenance, and allocate IT resources inefficiently. A study by software and services supplier Micropath Inc. of Bellevue, Wash., found that the average corporation has 22 percent more PCs than the records show.

Agencies and corporations pay the cost. According to two respected IT research and consulting organizations, International Data Corp. and the Gartner Group, large organizations can shave between 5 percent and 35 percent from their annual IT expenses by improving asset management.

It's not just a question of money. Unrecorded assets are difficult to manage. Fragmented IT inventories were one of the first problems agencies encountered when they began to tackle year 2000 remediation. For example, the Air Force's first effort to assess the extent of its millennium problems overlooked 5,000 computer systems, says Robert J. Lieberman, assistant inspector general for the Defense Department.

"Our past sins in lax IT management have come back to haunt us," Lieberman told a conference audience in May. Without a clear picture of the hardware, software and communications links on which DoD relies, the department's managers were handicapped in planning and budgeting for the necessary testing and remediation work.

Lieberman said one positive outcome of the Y2K experience has been the first good inventory of DoD

systems ever compiled. But hard- ly a day goes by without a change in that inventory, as new software and computers are acquired and old ones decommissioned or updated.

New Tools

To better control IT costs and keep their inventory records current, federal agencies and large businesses are beginning
to acquire new IT asset management tools. For example, the Federal Deposit Insurance Corp. is installing a software system to track 32,000 pieces of hardware--desktop PCs and servers, laptops, printers, fax machines and the like--nationwide.

"We had a very fragmented approach to managing our inventory," explains Janet Roberson, the assistant information resources management director who is heading up the project. Much of the asset management responsibility rested with the agency's local offices, and there was little consistency or uniformity in the reports that reached headquarters in Washington.

With the help of Innovative Logistics Techniques Inc., a contractor in McLean, Va., FDIC took inventory at all its locations, placed a bar-code sticker on each item and entered the information into a database. While they were at it, contractor and FDIC employees checked every computer for Y2K compliance. By last December, they had a clear picture of what PCs had to be replaced to ensure they would keep operating accurately after Dec. 31 of this year.

Although Y2K was one of the agency's concerns, Roberson says the top issue was getting control of IT costs. The new system tracks the purchase cost of new equipment, its maintenance history, its configuration and so on. With the data in hand, she says, "we can move forward toward a total-cost-of-ownership way of looking at all our assets. We're not there yet, but we're moving in that direction."

"Total cost of ownership" is the buzzword associated with the discovery, a few years ago, that maintaining and repairing computers, training users, supporting networks and other operating expenses far overshadow the purchase price of the hardware and software. With better data about operating costs, systems managers can make better decisions about, for example, the optimum time in their life cycle to upgrade computers, before maintenance becomes a burden.

Fewer Disappearances

Costs also are held down when fewer pieces of equipment simply disappear, as happens in most large organizations. In the past, the lack of good records made it difficult to hold anyone at FDIC responsible for disappearing items.

Such disappearances need not be thefts. Sometimes, for example, a field office discards a broken computer because the repair bill would be excessive. Without a means of easily recording that disposition, the equipment seems to have disappeared.

In fact, Roberson says, the difficulty of managing the 3,000 laptop computers used by the agency's bank examiners triggered FDIC's interest in getting a better tracking system. Now the field offices will be held accountable for the equipment their employees use. The offices, in turn, have been freed from paperwork and some other responsibilities.

The contractor, Innovative Logistics Techniques (also known as Innolog), receives new computers and related equipment on behalf of the agency, configures the laptops in accordance with FDIC standards, enters the necessary information in the asset management system, and ships the systems to the field offices. This area is one where asset management has sizable potential to cut costs, IDC reports. When repairs are needed, Innolog makes arrangements with the supplier for warranty service.

That leaves the field offices with less work but also less autonomy. Purchases no longer may be made locally, and configuration decisions are made centrally. Software updates can be delivered over the agency's network with little human intervention. The change has not been entirely welcome throughout the field offices, Roberson acknowledges. She calls it "a radical change in the culture and the environment" at FDIC and says that for all such changes, "the people part is the biggest challenge."

The new system already has begun to generate some savings, Roberson says. For example, in the past year FDIC began to manage central stores of items such as mouse pads and add-in memory chips. The agency was able to get volume discounts for the first time as its needs became predictable. What's more, these items are now readily available on short notice.

Plan Ahead

The system also will give Roberson and her staff the solid data she needs to develop a realistic budget and defend it. Computer and software upgrades can be scheduled. For example, when the agency decided to replace its slow 50-MHz and 100-MHz Pentium systems, it could determine how many new computers were needed without polling the field offices one by one.

At FDIC, Innolog implemented a software package called Maximo from PSDI, a Bedford, Mass., company. Maximo can track many kinds of assets, as can some of the competing products on the market. They include AssetCenter from Peregrine Systems Inc., which recently launched a subsidiary, Peregrine Federal Systems Inc. of Bethesda, Md., to serve the federal market, and Argis from Janus Technologies Inc. of Pittsburgh.

Other products, such as IT Ledger from NetBalance Inc. of Gaithersburg, Md., MC/EMpower from MainControl Inc. of Vienna, Va., and NetCensus from Tally Systems Corp. of Lebanon, N.H., are designed specifically for IT asset management. Such products can take advantage of new capabilities built into today's PCs that record in the computer's memory when it was acquired, its location, what software has been installed, and similar information. Once set up, such systems can use the agency network to update inventory records automatically.

For FDIC and other agencies, says Christopher Losa, director of integrated solutions at Innolog, it will make more sense to use these "auto-discovery" capabilities when nearly all the computers have that feature. With a significant number of older machines that don't report in automatically, auto-discovery isn't helpful.

Purchases of IT asset management systems will double in the next three years, IDC market researchers predict. Some of those dollars will be spent on enterprise resource planning systems, which can include asset management modules, and others will be spent on systems management products from Computer Associates International Inc., Tivoli Systems (an IBM Corp. subsidiary) and Hewlett-Packard Co.

The Army recently bought licenses to install 435,000 copies of Tivoli's enterprise management software. Once installations and commands acquire the product, they will be able to inventory PCs and networks worldwide from one or more central locations while keeping abreast of system operations and bottlenecks, says Peter J. Jacobs, a vice president of Telos Corp. of Ashburn, Va. The Army's Small Computer Program has contracted with Telos to install the management system under the licensing arrangement.

No Hands

Army installations also are using other asset management tools. For example, Fort Richardson, Alaska, and two other Alaska installations have installed software called BelAsset from Belarc Inc. of Maynard, Mass., to monitor hardware and software on 700 desks. Michelle Tonsmeire, an industrial engineer at Fort Richardson, says the product has saved time for the computer support staff. "If someone needs RAM [memory], you can easily find out what they're running, how much they have and what kind it is, without going out there" to open up the computer and check what's inside, she says.

The primary motivation for acquiring the asset management system was not to control costs or save time, Tonsmeire says, but to comply with Executive Order 13103 on computer software piracy, which President Clinton signed in September 1998. It calls for agencies to ascertain that they are authorized to use each software program installed on their computers.

At the Justice Department, there was another motive: the need to improve financial management. The department is installing Janus' Argis system nationwide in 300 U.S. attorneys' offices to track all items costing $1,000 or more, including IT, firearms, vehicles and more. At mid-year, with just 72 of the 300 offices using the system, there already were 82,954 records in the inventory. Because of the emphasis on improved financial management, the Justice system will have strong links to the department's accounting systems.

Staffing pressures, software licensing and Y2K concerns, and a pending new federal accounting standard requiring agencies to track the costs of all their internally developed software--not just purchased programs--contributed to the decision to use an asset management system, according to a mid-level manager whom Justice officials allowed to be interviewed only if her name would not be published.

IT accounts for about 80 percent of the inventory in U.S. attorneys' offices, the manager says, and the ability to manage the computer operations centrally will save substantial sums. On the other hand, the system gives each local office the ability to see and update its own inventory records, which she says is the only way to achieve accountability. Central management of so many items from Washington is impossible, the manager says.

Contracting Out

Agencies that don't want to install a distributed asset management system have an alternative for getting a handle on their desktop IT assets: outsourcing. Under the "seat management" programs that have developed some momentum recently in federal agencies, contractors are standing by to provide asset management, along with other PC and local network support services.

Asset management, help desk and repair services are the primary components of seat management, a bundle of services that can be tailored to the needs of an agency. Seat management usually means that an agency will end up leasing PCs and standard commercial software, rather than buying them, so it has fewer assets to manage.

Asset management and ancillary services, such as disposal of unwanted PCs, can be acquired from an array of IT contractors. More companies are entering the arena. For example, Dell Computer Corp. recently added to its General Services Administration schedule contract a bundle of asset management and related services called "CareFree Services." For an extra fee, computer buyers can get system customization and installation, electronic asset tagging and other services. Pedro Ferro, director of marketing for Dell's federal unit, says outsourcing is a trend, and his company is responding to customer needs.

As more computers come with built-in management features, there may be less need for these kinds of services, but software vendors are betting that the pressure for better management of IT assets, whether it's done in house or outsourced, will continue to mount.