An Asset or a Liability?

An Asset or a Liability?

I found one big surprise in the recent IDC Australia "Forecast for Management" survey. Very few organisations utilise leasing as the main method of financing the majority of their IT investments. In fact the survey revealed that less than 17 per cent of Australian and New Zealand CIOs use this approach.

I find it surprising because leasing IT investments provides an opportunity to handle one of the biggest challenges facing CIOs, namely the rapid obsolescence of the equipment they acquire. In fact when I was a marketing manager I tried to assess this phenomena for mid-range Unix systems. I discovered then that the life span for a computer model was about 18 months.

With leasing, the contract terms can allow the upgrading of a system, usually through extending the lease and maintaining the monthly payment level. One would assume this would appeal to CIOs dealing with the angst normally associated with board submissions justifying new capital equipment, especially if the last such submission is still relatively recent in the board's minds.

The desktop would seem an area ripe for leasing arrangements. At InTEP management group meetings, I regularly hear members say how they feel themselves on some sort of technology treadmill in a constant cycle of upgrading either the PC hardware or the software releases. Many question whether this effort brings any business benefit to their organisation.

To their credit, and no doubt spurned on by the network computer debate, many IT vendors are waking up to the opportunities presented by these challenges. In particular I have encountered three organisations that have recently established desktop asset management services. In effect, what they are promoting is the concept of outsourcing the management of the desktop. Leasing is usually an integral part of these solutions.

In essence the vendor acquires the desktop environment and the responsibility for its management. For many organisations this simple exercise helps install a new discipline in desktop management. As part of the process of acquiring these systems the service provider undertakes a comprehensive audit of the desktop systems and helps establish a central asset register. Often this can provide management with data not previously available such as a machine's location; to whom it is assigned; which department pays for it; and its software licences.

As such, this process can help instil a culture of user accountability for desktop assets. Since the lease invoice can be itemised to a departmental level, the onus on documenting PC movements lies with those users. It is their responsibility to highlight whether a PC has been transferred to another department. In large organisations it can also highlight whether these assets might have been pilfered.

This approach also affords an opportunity to track the service record of systems. Unreliable systems can be moved out of critical operations, and the organisation has an objective bargaining chip to use in upgrade negotiations with suppliers. Moreover, if a common desktop environment has been established, the service provider can be delegated to acquire any new equipment rather than having IT staff tied up in these administrative processes.

With "Forecast for Management" also highlighting that average staff numbers are set to fall in local IT departments, clearly extra pressures are going to be placed on those that remain. If, as they report, one of the main challenges for CIOs is aligning IT with the business then this can only really be achieved by eliminating the distraction of non-value activities. While some CIOs may look to the network PC as a solution to the time demands presented by the desktop, it is likely that others may well choose outsourcing desktop asset management as their preferred solution.

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