Life Cycle Asset Management

Most information systems and technologies, once installed, are treated as sunk costs – and as assets to be milked indefinitely to recover those sunk costs. This leads to retaining technology and applications far beyond their original purpose and design. Along the way, the systems lose touch with business needs, and the queue of maintenance and enhancement requests grow endless. In extreme cases, prolonging the lives of obsolete systems consumes the majority of available IT resources, yet delivering minimal business return and in fact robbing the business of resources that could be deployed profitably. It’s like running on a treadmill instead of toward a destination.

Lifecycle Management

Instead, the business and IT must together adopt an asset management approach. Start with the expected life cycle of an application or technology, and then along the way determine when to repair, repurpose, replace or retire it – and when to reallocate IT resources. And let sunk costs be sunk: if the resources used to maintain the old asset can generate higher business return doing something else, then redeploy them. Effective asset management results in a continuous focus of IT resources on business value.

Many projects that have consumed many IT organizations for the past several years represent a failure in asset management – the applications were neither kept healthy nor retired until doing so became an absolute business necessity under a fixed deadline. In a sense, more information technology asset management has been done in the last few years in the name of reducing costs than had been done in the previous 30. The good news is that these culling cost efforts have given many corporations a relatively fresh foundation of assets, plus recent experience in the value and challenges of asset management. Don’t lose this momentum. Instead, asset management must be an ongoing business activity. That way, precious IT supply will not be wasted on the false demand of obsolete assets.

Article by Shaun White http://www.sacherpartners.eu Contact Shaun for more information

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From Sunk Costs to Life Cycle Asset Management

Most information systems and technologies, once installed, are treated as sunk costs – and as assets to be milked indefinitely to recover those sunk costs. This leads to retaining technology and applications far beyond their original purpose and design. Along the way, the systems lose touch with business needs, and the queue of maintenance and enhancement requests grow endless. In extreme cases, prolonging the lives of obsolete systems consumes the majority of available IT resources, yet delivering minimal business return and in fact robbing the business of resources that could be deployed profitably. It’s like running on a treadmill instead of toward a destination.

Lifecycle Management

Instead, the business and IT must together adopt an asset management approach. Start with the expected life cycle of an application or technology, and then along the way determine when to repair, repurpose, replace or retire it – and when to reallocate IT resources. And let sunk costs be sunk: if the resources used to maintain the old asset can generate higher business return doing something else, then redeploy them. Effective asset management results in a continuous focus of IT resources on business value.

Many projects that have consumed many IT organizations for the past several years represent a failure in asset management – the applications were neither kept healthy nor retired until doing so became an absolute business necessity under a fixed deadline. In a sense, more information technology asset management has been done in the last few years in the name of reducing costs than had been done in the previous 30. The good news is that these culling cost efforts have given many corporations a relatively fresh foundation of assets, plus recent experience in the value and challenges of asset management. Don’t lose this momentum. Instead, asset management must be an ongoing business activity. That way, precious IT supply will not be wasted on the false demand of obsolete assets.

Article by Shaun White http://www.sacherpartners.eu Contact Shaun for more information

Read Full Post »