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'.
I totally agree with the comments of Sir Florenz Tugas. If I may add, however, the detailed presentation of Forrester Consulting gives us the idea that European organizations have not yet matured in their IT asset’s end-of-life management. They considered it the least important (55%) as far as the life cycle of their IT assets is concerned.
ReplyDeleteConsider this as purely human nature. Peel a banana, eat the sweet flesh, and…there are many ways to dispose of the peeling. Throw it anywhere and probably hurt someone who may happen to step on it; put it in your pocket, you soil your pants; carry it home, what for? It will just rot and invite fruit flies; throw it inside a garbage can…well, somehow you have chosen the “mature” way” of disposing it.
Yes, I am talking of the possible ways on how to manage EOL (end-of-life) of IT assets. The same consulting firm found out that 22% of all IT assets (page 17) are stored or destroyed when they reach their end of life. Somehow, the results of the study of Forrester Consulting will influence not only the Europeans but also the rest of the countries with extensive IT assets to devise ways to reduce costs by way of adopting appropriate ways of ending the life of their aforementioned assets.
Let's leave Europe for a while and try to visit the warehouse (bodega) of a particular school in the Philippines. Do we find any old monitor with other IT paraphernalia? How many items do we find there? I suppose I would find a number of different IT equipment since a “normal” bodega will naturally be so cluttered with old furniture and fixtures like tables, ergonomic chairs, etc. which, to some extent, are still reusable (recyclable). Perhaps these old things can still be sold (as a way of managing end-of-life of IT asset) and the proceeds used to buy filing cabinets which are needed by many departments which have just been relocated. In this way, the old costs could somehow be recovered through these replacements.
Lastly, I would be honest in sharing this. My old laptop is already out of order because the body is half destroyed. If I attempt to force open it, the whole thing will fall apart. I want to transfer the data stored therein but the connections have already been cut and there is no guarantee that the precious personal information store inside are still okay. One co-faculty in our department suggested that I totally destroy the unit to protect all the data therein. I have not decided yet on the manner of destruction. Shall I throw it into the Pasig River? Someone might fish it out! Burn it perhaps? It might burst into flames and spread the poisonous elements it contains like cadmium, lead, and mercury. Get a hammer and attempt to pulverize it. Well, not really a bright idea because I might be hurt by some flying debris. Then what? Any suggestions, please? After all, I have not yet “matured” in dealing with my laptop’s end of life.
Totally agree, making it more personal, throwing "old" stuffs can be very difficult. We often think, we might still need them in the future. This is the reason why we have to manage our "disposals" properly. Since regulatory and legal noncompliance can be costly, the more we need to be extra cautious in the way we "dispose" these assets. Truth be told, managing EOL IT assets is easier said than done as decisions involve perspectives of several stakeholders.
DeleteI totally agree with the insightful sharings of Sir Florenz and Sir Doods. Just wanted to highlight one of the key findings of the Forester Study that relates to an organization's bottom line. When organizations do not have mature ICT end-of-life asset management, the Total Cost Ownership (TCO) in maintaining and disposing such ICT assets increases overtime. An organization will have to maintain a storage facility and an inventory system for the depreciated ICT equipment until such time that they are able to dispose them properly (whether to destroy, recycle, donate will still cost the company) subject to environmental regulations. The level of effort of course depends on the size of the organization. For most organizations, the selling point to implement a more mature end-of-life asset management would be on the impact to their operational objectives - cut costs and increase profit.
ReplyDeleteI look forward to having many of our public and private organizations realize that it does make sense for them to pursue a mature end-to-end IT Asset Management, not only for profits sake but also for environmental considerations.
On a personal note, I myself have retired several personal ICT eqpt/peripherals (PCs, routers, printers, laptops, diskettes, CDs, cellular phones, palm pilots, etc.) that are still in storage at this time, gathering dusts and hogging space in the attic.
Maybe our group we can come up with some basic guidelines in properly disposing personal ICT equipment, do advocacy on this end-of-life asset management practice and hopefully contribute to a green ITAM in the country, however, small or insignificant it can be for now.
I completely agree with Ms. Agnes' proposal of coming up with guidelines on disposing personal ICT equipment. We can champion this advocacy in the Philippines. I have seen bins for ICT disposals at school a couple of years back though but I am yet to see guidelines institutionalized as such. Making this end-stage of ICT value chain mature will strengthen the core. As the saying goes, the entire (ICT value chain) is as good as its weakest link (chain).
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