Very often, the case is that we get very much excited by new things, be
that a book, a collection, or a techie gadget. The level of excitement is
significantly high that as time passes by and these things get older, the same
level of excitement significantly dwindles down. The same is the case for
businesses in terms of their information technology (IT) tools and equipment. Once
they were new during which the business seems very excited about, but as new
models come out, the business gets restless to check and find out the newer
models that others may have.
The same situation holds true in managing IT assets wherein the procurement
and the earlier use get the prime time attention and the end-of-life activities
(storage, retirement, disposal) get only residual attention, mostly of those
who end up with no choice. The same hypothesis was validated in the study
conducted by Forrester Research, Inc. in 2009.
Yes, depreciation and obsolescence of IT assets are an inevitable and a
natural phenomenon but IT assets eventual leading to these conditions should
not be taken aside. The study of Forrester (2010) presents business' exposure
to a number of hassles and liabilities once this stage of IT life cycle is not
proactively attended to. These include penalties, fines, and competitive
advantage loss because of regulatory and legal noncompliance, data security
breaches, environmental mishaps, disclosure of business secrets, among others.
In the face of technological innovation, life cycle of IT assets can be
significantly reduced making the task of monitoring end-of-life IT assets more
challenging. Life cycle reduction is beyond the control of the business, but
how to manage these IT assets must be a primordial concern equally important as
procurement, financial management, and operations pillars. If such is the case,
businesses must be more strategic in its response to these challenges.
Forrester (2010) presents recommendations in managing end-of-life IT
assets. Topping the list is the assessment of those involved in managing these
IT assets. These are people, processes, technology, and service providers. Once
these are properly managed, the business is a step closer to realizing IT
operating and capital costs reduction, data security risks and legal
liabilities mitigation, and business continuity and disaster recovery
improvement.
Though the study focused on European businesses (developed countries),
we can make use of the recommendations as the findings may mirror the state of
similar businesses in some parts of the world, where manufacturing businesses
composing a majority. In fact, if the level of end-of-life management is not
that defined, we can expect an even worse level for some developing countries
in Africa, Asia, and South America.
This advocacy may not be welcomed similarly across countries but one
thing is for sure. Experience is the best teacher and sometimes it is learned late.
I just hope that businesses start to think about this and not wait for
irreparable consequences that have huge financial consequences. Along this
line, should this advocacy gets across, businesses have to develop a structured
accountability and responsibility measures of these IT assets by creating
dedicated units for this purpose. If it will be less expensive to outsource,
the business has to develop criteria in choosing service providers. Following
the 12 best practices of outsourcing in previous article, setting up a criteria
will prevent the selection of wrong service providers. Similarly, the principle
that the service provider is an extension of the business handling a particular
process will increase the level of consciousness that work done by the service
provider reflects the work done by the business consistent with the agency
theory.
Personally, I am glad that this time has come, when we have to take
end-of-life IT assets management seriously. This is a clear manifestation that
the effect of IT to businesses has been getting more pervasive each day. I am
more than excited to make use of the instrument developed to assess internal
end-of-life management capabilities (people, process, technology, and
providers) of business in the Philippines and compare and contrast the findings
with that of European countries'.
