Experts project global information technology spending to reach $4.5 trillion this 2022. Assets, including devices, data centers, and software, would account for 38%, or $1.71 billion. The rest would go toward IT and communication services.

Considering how much money goes toward assets, it’s a must for your business to track them. You can do so through a process known as IT asset management (ITAM).

This guide covers the crucial facts about ITAM, including its definition and why you need it, so be sure to read on.

What Is IT Asset Management?

ITAM is a set of business practices involving IT-related inventories, contracts, and finances. It starts with creating a directory listing all hardware, software, and network assets. Your organization can then use the data to decide how to use, allocate, and maintain your IT assets.

Why Does Your Business Need ITAM?

ITAM helps you maximize returns on asset investments, reduce losses, and minimize risks. It also assists you in complying with regulations and even brings environmental benefits.

Aids in Proper IT Budgeting

A survey found that the average small or medium-sized business spends $10,000 to $49,000 a year on technology. That’s already a lot, but 52% of the participants said they think they spend too little on their tech. On the other hand, one in five believe they’re overspending.

Since ITAM catalogs assets, it helps you learn where your IT budget goes. Your organization can then determine if it spends too little or too much on IT.

Prevents Unnecessary Asset Purchases

A company without in-depth knowledge of its assets is at risk of redundant technology. For instance, it may pay for several applications with the same or similar functions.

By contrast, a business that knows its assets can make the most use of them. So, it’s less likely to make duplicate purchases, helping ensure that no budget goes to waste.

For example, let’s say you know your organization handles 20 terabytes of data at any given time. However, you also know your business pays for 25 TB of cloud storage. That knowledge alone can help you avoid buying more space that you don’t need at the moment.

Minimizes Downtimes

A 2020 analysis found that three in four surveyed organizations had an IT outage in the last three years. About 30% even said the problem left them with a ‘significant impact.’ Moreover, 75% of those who’ve had a downtime said better management could’ve kept the issue at bay.

That further proves the importance of IT asset management since it involves maintenance. That includes prompt software updates and hardware and network repairs. You can also use ITAM for 24/7 asset tracking to catch and fix issues before they occur.

Tracks Risky Legacy Systems

Another of the top benefits of IT asset management is that it lets you monitor legacy systems. That again comes from the detailed asset inventory it provides.

The term legacy refers to any outdated technology still used in a business. It can take the form of hardware or software that no longer receives updates. Manufacturers or developers no longer support them, either.

Unfortunately, outdated technologies are more susceptible to malware. One reason is that they don’t get security updates anymore. In contrast, 450,000 new malware and potentially unwanted applications get created daily.

Reduces Cybersecurity Risks

Cyber threats can also target personal devices used in the workplace. Organizations that are especially at risk are those with BYOD (bring-your-own-device) policies.

Most personal gadgets, after all, don’t use the same industry-level security measures. A 2020 report even found that infections of Internet of Things (IoT) devices grew by 100% from the year before. Most infections occurred in Windows computers, but the most targeted were Android devices.

If an employee uses a compromised device, hackers can breach your company’s network. That can then allow criminals to steal sensitive data or launch a ransomware attack.

ITAM can help reduce such threats since it lets your business account for all devices used at work. Your IT department or managers can then prohibit using unsafe or non-compliant gadgets.

Helps With Regulatory Compliance

Do you have clients who live in the European Union and whose data you process in the United States? If so, the General Data Protection Regulation (GDPR) likely applies to your business.

The GDPR is a set of data privacy and protection policies for EU residents. Violations can result in hefty fines of up to a staggering €20 million or over $22 million.

The Health Insurance Portability and Accountability Act (HIPAA) is another data-related regulation. It applies to companies handling protected health information (PHI) in the US. It also has rules governing the privacy and security of patient data.

Don’t forget the Canadian Personal Information Protection and Electronic Documents Act (PIPEDA). It’s similar to the GDPR, meant for data privacy and security. It applies to US businesses handling the data of clients living in Canada.

One way to comply with those regulations is to secure your IT assets from cyber-attacks. That makes ITAM vital, as it helps you track and protect your data storage and networks.

Assists in Proper Equipment Disposal

Once an asset reaches the end of its useful life, it’s time to retire and dispose of it. That includes canceling support agreements, software license renewals, and deactivating devices. You can check out this resource on safe device deactivation for more info.

However, you can’t just throw IT products in the trash bin because they’re hazardous wastes. They contain toxic elements, including cadmium, mercury, lead, and polybrominated flame retardants.

Incorrect disposal can lead to e-waste getting tossed in landfills. Once they decay, they can release toxic compounds polluting the air, land, and water.

Since ITAM lists end-of-life assets, it helps you coordinate with proper disposal facilities. They include asset recovery, data backups, data destruction, and materials recycling.

Manage Assets From Start to End

As you can see, IT asset management is like the alpha and omega of your tech investments. It’s a journal of their life cycle, detailing their condition, upkeep, and if it’s time to retire them. You can then use that data to keep them up to date, safe, and secure.

All that makes ITAM crucial, for, without it, your business is at risk of hefty losses and penalties.

Did you like this article? If so, you’re sure to find our latest posts just as informative, so feel free to read them now!

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