What Is Hardware Asset Management? And Why Is It Important?

With cloud and mobile taking up so much space in IT discussions today, it's easy to forget about the bedrock of our digital operations - IT hardware. This fundamental component, often overshadowed by its more glamorous counterparts, remains the powerhouse orchestrating the relentless flow of data, supporting mission-critical applications, and ensuring the uninterrupted rhythm of daily business operations.

And if you have IT hardware (and every business does), then managing those hardware assets becomes critical to maximizing efficiency. This is where Hardware Asset Management, or HAM, comes in. Hardware Asset Management helps organizations monitor and manage their physical computing devices. This meticulous management ensures optimal acquisition, usage, and disposal, minimizing risks and maximizing benefits.

Yet, despite HAM's well-understood benefits, a recent Deloitte survey unveils a striking reality. Only 38% of organizations have a fully implemented IT asset management software. Alarmingly, 24% have no program at all.

With this in mind, let's dive into everything you need to know about Hardware Asset Management and why it's important in an increasingly complex cyber landscape.

What is a Hardware Asset?

A hardware asset refers to the physical components of an organization's IT environment. This encompasses computers, servers, networking equipment, printers, and other tangible equipment crucial for operational efficiency. For instance, a company may have hundreds of laptops, servers to host applications, and networking devices, ensuring seamless communication. Each of these items is a hardware asset.

Unlike virtual software assets, hardware assets have a physical presence and require different management strategies, such as tracking, maintenance, and eventual disposal. Proper management ensures these assets deliver maximum value throughout their lifecycle while reducing associated risks and costs.

For example, point-of-sale systems are hardware assets critical for daily transactions in a retail setting. In manufacturing, hardware assets could include specialized machinery controllers. In every scenario, these assets form the backbone of the operational IT infrastructure, whose health and performance are crucial for business success.

What Are the Different Categories of Hardware Assets?

Hardware assets fall into different categories. Let's take a look at these.

End-User Devices: This is the hardware used directly by employees for their daily tasks. It includes desktop computers, laptops/notebooks, tablets, smartphones, SIM cards, USB drives, and external hard drives.

● Network and Telecom Hardware: This is the support equipment that helps support digital and analog communication. It includes routers, switches, load balancers, firewalls, modems, telephone systems, video conferencing systems, and cables & connectors.

● Data Center Equipment: This category encompasses all hardware essential for data centers to run smoothly. It includes servers, storage devices like SAN, networking equipment, power supplies, cooling systems, racks, and security devices like cameras and biometric access systems.

● Peripherals: These are the support equipment in office environments and remote setups. It includes monitors, keyboards, printers, headsets, webcams, projectors, and cables & adaptors.

What is Hardware AssetManagement?

Hardware Asset Management (HAM) is the disciplined approach to managing an organization's physical IT assets from acquisition to disposal. It's a systematic process aimed at optimizing the lifecycle of hardware assets, ensuring effective deployment, operation, and eventual decommissioning.

At its core, HAM involves several key processes. First, it tracks and inventories hardware assets, ensuring that organizations accurately understand what assets they possess, where these assets are located, and how they are being used. For instance, a well-structured HAM system can swiftly find a particular server among hundreds in a data center, or a specific laptop assigned to a team member in a large corporation.

Second, HAM oversees the maintenance and support of these assets, ensuring they operate efficiently and meet the organization's needs. For example, it ensures timely repairs and upgrades, which is critical in settings like hospitals where the functionality of medical devices directly impacts patient care.

Lastly, it manages the disposal and replacement of hardware assets, guaranteeing that outdated or non-functional equipment is retired and replaced in a timely, cost-effective, and environmentally responsible manner.

How Do Companies Approach Hardware Asset Management?

Companies approach HAM differently based on their size, industry, and operational requirements. For example, it's common to see smaller companies using spreadsheets to track and manage their hardware assets. However, this manual method quickly becomes ineffective and cumbersome as the organization scales. It poses challenges in real-time tracking, accuracy, and can lead to data inconsistencies, making asset optimization and compliance monitoring daunting tasks.

Why HAM on Spreadsheets Doesn't Work

Let's look at some examples of why tracking hardware assets on a spreadsheet can quickly cause problems.

Let's consider a mid-sized company, FlowCorpTech Inc. (not a real company), which initially uses spreadsheet tracking for managing its hardware assets. As the company grows, the number of assets multiplies, spanning several departments and locations. One day, a critical server experiences a failure, and the IT team scrambles to resolve the issue. They refer to the spreadsheet to find warranty information and realize that the document hasn't been updated for several months due to oversight. They're now unsure if the warranty is still active or has expired, leading to delays in resolution while they scramble to gather the correct information.

Moreover, analysts discover discrepancies between the physical inventory and the spreadsheet data during an internal audit. The spreadsheet shows 50 laptops, but only 45 are accounted for during the audit. There's no trail to ascertain if the missing laptops are misplaced or stolen, or if it's merely a data entry error.

Additionally, IT procured a batch of new assets, but the details were not updated promptly in the spreadsheet, leading to under-utilization of these resources. Some assets remained unallocated for weeks, hampering productivity and incurring unnecessary costs.

HAM Software

Conversely, many organizations, recognizing the limitations of manual tracking, leverage dedicated HAM software to streamline and automate the process. HAM software provides a centralized platform that automatically tracks, monitors, and manages hardware assets throughout their lifecycle. Unlike spreadsheets, these tools offer real-time insights into asset utilization, location, and status.They facilitate quicker decision-making accurate reporting, and ensure compliance with regulatory standards.

For instance, HAM software can automate the discovery and inventory process, effortlessly capturing details of all hardware assets across multiple locations. It can schedule maintenance activities, monitor warranties, and provide alerts for asset-related actions such as upgrades or replacements, making the asset management process less prone to human error and oversight.

Furthermore, HAM software allows for seamless integration with other enterprise systems like procurement, finance, and IT service management, providing a holistic view of the assets from procurement to disposal. This integrated approach enhances operational efficiency and provides actionable intelligence for better cost management and strategic planning.

What Are the Benefits of Hardware Asset Management?

  1. Cost Optimization: HAM helps avoid over-purchasing and under-utilization of hardware assets, ensuring resources are optimally allocated and thereby reducing operational costs.
  2. Compliance Management: It ensures compliance with various regulatory and contractual obligations by providing accurate asset information, aiding in audit readiness, and reducing legal risks. For example, a healthcare provider can ensure that all hardware assets comply with the Health Insurance Portability and Accountability Act (HIPAA) standards.
  3. Improved Operational Efficiency: By providing real-time insights into the asset lifecycle, HAM enables timely maintenance, upgrades, and replacements, thus minimizing downtime and     boosting productivity. For example, a manufacturing company can reduce downtime in their assembly line through proactive maintenance schedules set by their HAM system.
  4. Asset Lifecycle Optimization: HAM facilitates informed decision-making on asset procurement, utilization, and disposal, ensuring maximum value extraction from each asset throughout its lifecycle.
  5. Risk Management: By tracking asset location, status, and responsible users, HAM helps identify and mitigate risks associated with asset misuse, theft, or loss.
  6. Enhanced Decision-Making: With accurate and up-to-date asset data, organizations can make better-informed decisions regarding asset investments, technology refreshes, and infrastructure improvements, aligning IT strategies with broader business goals. For example, a HAM system may flag that server resources are underutilized. With this information, the company can reallocate resources instead of purchasing new servers, saving them money.

How Does Hardware Asset Management Help Cut Costs?

In many ways, some of which we've already covered. However, here's a specific example so you can see how HAM leads to real-world savings. Consider a firm with 1000 computers. Without HAM, they might purchase 100 additional computers annually, costing $80,000, assuming more assets are required. However, with HAM, accurate tracking could reveal that only 50 new computers are needed due to underutilization of existing assets, thereby saving $40,000 in a year.

Final Thoughts

Hardware Asset Management is a critical tool for organizations aiming to optimize their operational efficiency and cost management. By precisely tracking hardware assets, HAM supports informed decision-making, ensures optimal asset utilization, and helps maintain regulatory compliance. The cost savings realized through HAM go beyond merely reducing procurement expenses—it also aids in avoiding legal fines and adopting a lean operational model. In a rapidly changing technological landscape, adopting HAM is a sensible move for organizations looking to stay competitive, compliant, and cost-effective.