Understanding inventory, configuration and IT asset

management

Introduction...............................................................................................2
Defining inventory, configuration and IT asset management ........................2
Primary success enablers ........................................................................3
Inventory management ...............................................................................4
Building the right foundation with an accurate inventory count ....................4
Saving time while instilling process control ................................................4
Technology enablers ..............................................................................5
Best practices ........................................................................................5
Configuration management.........................................................................6
Showing depth and relationship among assets ..........................................6
Reconciliation: the heart of configuration management ...............................6
Configuration management for proactive IT management ...........................7
Technology enablers ..............................................................................8
Best practices ........................................................................................8
IT asset management..................................................................................9
Lifecycle management ............................................................................9
IT asset management for process automation and IT efficiencies ..................9
Technology enablers ............................................................................10
Best practices ......................................................................................10
Evolve your IT operational practices with HP OpenView solutions..................11
For more information................................................................................12
Introduction
It’s common knowledge that enterprise IT organizations face a deluge of efficiency, cost constraint
and compliance issues every day. Sometimes it seems like dealing with these issues takes precedence
over what IT is responsible for in the first place―delivering business services that directly support and
empower the variety of automated processes that drive the core business.

If delivering business services is the core responsibility of an IT organization, doing so requires having
the right building blocks in place—specifically, the IT assets that comprise those business services.
Laptops, servers, routers, hubs, databases, applications… there are dozens of classes, hundreds of
types and a seemingly endless variety of building bocks that comprise the corporate infrastructure. All
are connected, all are related and all are responsible for supporting the people, processes and
transactions that power a company’s business.

So it seems like common sense that these IT assets should be managed, from the day they are
requested and procured, to when they are deployed, throughout their entire lifecycle right through to
retirement and disposal. And yet, more than 80 percent of corporate enterprises still do not have a
centralized and automated way to manage the physical, operational and financial status of their IT
assets, much less the relationships that those assets have to one another.

That’s where inventory management, configuration management and IT asset management come into
play. Together, these three IT disciplines form the cornerstone to a well-managed enterprise
infrastructure. Together, they empower business service delivery and support.

This white paper explores the distinctions among inventory, configuration and IT asset management,
what you should know about them, what processes define each of these disciplines, and how they
each contribute to improved IT efficiencies, cost containment and mitigation of compliance risk.

Defining inventory, configuration and IT asset management

First, a note on nomenclature. Although some analyst definitions might vary, the core processes
described here are consistent with industry best practices. Let’s look at how each of these disciplines
is defined:

Inventory management is about capturing the basics—what assets are on hand, where they
reside and who owns them. It’s about maintaining an accurate, up-to-date view of owned hardware
and software assets, so that at any time you can see an “actual state” of the components that
comprise your infrastructure.

Configuration management adds a relationship dynamic, such that you can associate each item
with other items in the inventory. In configuration management, classes and components, upstream
and downstream, and parent/child relationships establish relationships between each CI
(configuration item). Furthermore, it involves processes around planning and identifying CI structures,
having a controlled environment for changing CIs and being able to report on the status of CIs.

IT asset management (ITAM) is a much broader discipline, adds several dimensions of

management and involves a much broader base on stakeholders. First, it introduces the financial
aspects of assets, including cost, value and contractual status. In a broader sense, ITAM also refers to

2
the full lifecycle management of IT assets, from point of acquisition or procurement through
disposition, which together account for a comprehensive “expected state.” Taken together, ITAM is
designed to manage the physical, contractual and financial aspects of those assets.

Inventory, configuration and IT asset management build upon one another. It’s best advised to
undertake inventory management before undertaking configuration management or ITAM, although
some processes in configuration management and ITAM can be implemented simultaneously,
depending on the process and organizational maturity of your organization. But this is not to say that
you shouldn’t consider all three when specifying requirements―on the contrary. Embarking on
inventory, configuration and IT asset management requires planning and forethought. All three should
undergo careful requirements planning to minimize overlap in functionality or data collection
requirements as your processes broaden and mature.

Undertaken in an evolutionary approach, building a centralized inventory repository with

configuration information forms the basis for a CMDB (configuration management database). A
CDMB is a logical entity with key integration points, and it supports and enables processes in service
delivery, service support, IT asset management and other IT disciplines. The CMDB should hold the
relationship among all system components, including incidents, problems, known errors, changes and
releases.
White Paper
The CMDB also contains information about incidents, known errors and problems, and corporate
data about employees, suppliers, locations and business units.1

The CMDB enables powerful insight into the current and ever-changing profile of the infrastructure.
Tightly integrated with service management processes as advocated by ITIL (the IT Infrastructure
Library), inventory, configuration and IT asset management can be powerful and highly leverageable
activities that help IT organizations reduce costs, improve service and mitigate risk.

Primary success enablers

There are three primary enablers to success for implementing one or all of these disciplines:

A single, centralized and relational repository: If having a simple inventory list were your
only objective, then a relatively simple database might suffice as a centralized repository. But, implicit
in configuration and IT asset management are the relational attributes of assets to components,
contracts, operational status, financial impact and upstream/downstream relationships. Because the
data from all three build upon one another, starting with a repository that’s capable of managing
complex relationships will save time and money in the long run.

Organizational alignment and defined processes: These three disciplines touch many
organizations. Within IT, the applications delivery group, infrastructure, desktop support and network
operations are just a few of the groups that will rely on inventory and configuration information. IT
asset management extends tangible benefits to people in contracts, procurement and finance, thus
alignment with cross-organizational people and processes makes sense. It behooves you to align
requirements and understand all processes that will influence the initiatives, helping you to benefit
from a coordinated implementation of tools, technologies and interdepartmental processes.

Scalable technologies and infrastructure: Significant leverage is gained from deploying

inventory, configuration and ITAM on an enterprise-wide basis. Cost, benefits, service impact and risk

1
CCTA, Best Practices for Service Support, © 2000

3
mitigation benefits are highly leverageable. Therefore, planning and executing with enterprise-class
scalable tools and technologies are the right things to do.

The value of inventory, configuration and IT asset management extends throughout the IT organization
and by extension the customers that IT supports. Well conceived planning and implementation will
improve quality of IT services to the business community, reduce costs of those services and mitigate
financial, operational and risks associated with IT systems and the business processes they support.
Structuring your goals, processes and tasks, and using a CMDB strategy as a fundamental success
requirement, will pay dividends throughout your implementation.

Inventory management
Building the right foundation with an accurate inventory count
The goal of inventory management is to have a complete, up-to-date and accurate view of all network
components, including PCs, servers, printers, hubs, routers, switches and software―everything that
comprises the IT infrastructure. At a minimum, inventory management should tell you the device class
and what’s installed on the device. Thus, for any give time frame, inventory management provides the
“actual” state of all infrastructure components. This means that you know what you have and where
it’s located―across the entire enterprise.

Implementing automated inventory management is foundational―and critical―to configuration

management, IT asset management and all service management disciplines. By delivering a clear
view into network assets, it delivers a host of direct (as well as indirect) benefits.

Saving time while instilling process control

The most apparent benefit is the time and effort saved from doing physical inventories. In addition to
recovering this time in the IT organization, automated inventory practices reduce the interruption to
business users, otherwise caused by physical inventory, which can have a sizable impact on business
unit productivity.

With a consolidated inventory, the service desk sees an immediate benefit simply by knowing the
components of an asset related to a call or incident. In fact, analysts claim that the first nine minutes of
a service call are spent trying to correctly identify the profile of the asset in questions—time that could
be otherwise spent directly solving the problem.

Improving the utilization of existing assets is another benefit. Enterprise organizations typically have
more hardware and software assets on hand than they really need. Inventory management lets you
examine what you actually have so you can begin to make smarter choices about re-deploying
existing assets before procuring new ones. Statistics show that enterprise companies have 12 percent
more hardware assets than they actually believe they have. Systems that are idle or otherwise go
unused can be re-purposed, which reduces spending on new asset acquisition. A solid, automated
inventory practice can immediately curb the tendency to spend before re-using existing assets.

And, when it comes to compliance regulations such as Sarbanes-Oxley, having an accurate and
demonstrable process in place for inventory satisfies control environment requirements and also
supports other control processes. Importantly, with an accurate inventory you can be more confident
that you’re paying taxes appropriately; taxes are commonly overstated due to lack of asset visibility.

4
Technology enablers
If the assets that comprise your network were static, inventory would be a painless one-time project.
But of course that’s not the case. Laptops are constantly on the move, servers get decommissioned,
and software changes constantly. Inventory management has to keep up with the change, and that
means you need an automated inventory management practice that accommodates frequent and
regularly scheduled updates.

Taking inventory is the first step in establishing visibility into the infrastructure and provides the basis
for populating a CMDB (configuration management database). Although often initiated with a
physical inventory, using automated tools to discover all components on your network saves enormous
time and effort and provides an immediate view into the actual state of your infrastructure.

Determining the right level of asset detail you will need requires planning and forethought. Large ITOs
(IT organizations) might want to see hardware inventory details, such as memory, disk and BIOS
information. For network devices, they might track network equipment, such as hub, routers and
switches, down to the operating system level.

Determining the level of software specificity is very important, because it is this data that will be used
to determine if you’re meeting software license compliance obligations. At a minimum, an inventory
product should collect all registry and non-registry files and be able to recognize version, release and
patch levels. This provides a baseline to enable more sophisticated software asset management
capabilities that can reconcile files against titles as well as against licensable applications.

Best practices
Here’s a short list of best practices to consider in starting an inventory management initiative:

Get organizational buy-in: Although inventory may not involve the variety of stakeholders that
configuration and ITAM do, starting early in the process always helps. Ensure processes are well
defined so that inventory accuracy is maintained. Set policies on frequency of discovery scans and
inventory processes. Make sure stakeholders from all departments see reports on a regular basis so
that they continually buy into a centralized inventory process and configuration management
practices.

Set up a centralized, relational CMDB-based repository: Ensure that there’s a centralized

repository―one that’s capable of serving as a CMDB―to hold inventory items and eventually
financial and lifecycle aspects of those assets with ITAM processes. It’s all too common to see different
divisions, branches or business units taking their own inventory and storing it in their own way. As we
look deeper into the value propositions associated with inventory, configuration and ITAM, having a
single, centralized repository will pay very large dividends.

Establish a baseline: Good inventory practices start with an accurate baseline. An accurate
inventory of installed hardware and software forms the foundation of a solid ITAM program. This
baseline identifies in ITAM which assets need to be redeployed, reused or retired.2 Doing a physical
baseline is a necessary step to make sure you have all connected and non-connected IT assets in your
repository.

Go deep, then go wide: A winning strategy for companies is the start of an inventory practice
around one asset class, such as servers. This way, you can put processes in place to capture and

2
Patricia Adams, Gartner, 2004 – “Management Update: Conduct a Baseline Inventory to Better Manage Your IT Assets”

5
reconcile the detail you need and test the processes though regularly scheduled updates to ensure
they are thorough and yield the right results. Once successful, the same processes can be
implemented for PCs, network equipment and detailed software inventory.

Have a process owner: Inventory management needs a single process owner who can consider
the needs and requirements from all stakeholders and assure accountability throughout the entire
process.

Configuration management
Showing depth and relationship among assets
Configuration management takes inventory management to the next level by introducing the notion of
relationships among the assets. Adding additional levels of asset detail depth to the CMDB,
configuration management describes relationship detail for each CI, delivering a more robust
informational basis for incident, problem, change and release management.

As described within the ITIL framework, configuration management provides a logical model of the
infrastructure or a service by identifying, controlling, maintaining and verifying the versions of CIs in
existence.3

The goals of configuration management are to account for all IT assets and configurations, provide
accurate and up-to-date information on CIs to support service management and IT asset management
processes, and to provide a sound basis for incident, problem, change and release management.

In effect, the configuration management discipline aims to fully support efficient delivery and support
of business services. Thus, configuration management practices result in a complete, up-to-date and
accurate account of the status of every CI and reflect this directly in the CMDB. The CMDB, in turn,
becomes the master source of the state of the infrastructure upon which actionable reports, analysis
and decisions models can be built to address compliance, performance and cost containment
measures.

Reconciliation: the heart of configuration management

A key configuration management dynamic is reconciling what is found with what you believe you
have on hand―the reconciliation of the “actual” versus the “expected state.” This is accomplished by
having your discovery data compared with your current repository of data and by having any
unexpected discrepancies become immediately apparent.

There are two potential causes of reconciliation discrepancies: either an asset enters the infrastructure
without going through a change process (e.g. rogue software is installed), or a change process was
not properly closed, resulting in an actual asset status that’s different from the expected state.

This, in fact, is where the practical value of configuration management lies, because by managing the
actual versus expected state of your assets, you’ll get immediate and specific detail on any new
hardware or software assets that may have unexpectedly entered in the environment. You can take
corrective actions immediately, enabling quick remediation for potential security or compliance
breaches.

3
CCTA, Best Practices for Service Support, © 2000

6
If discovering and remediating individual CIs weren’t enough, you also have to consider the
upstream/downstream effect of disruptions caused by discrepancies or unexpected activity.

Configuration management holds this upstream/downstream relationship of CIs so the ITO can better
understand the true impact of change, service costs, service delivery and unforeseen service
disruptions. Because service disruptions can happen at any point in a chain of hardware and
software dependencies, implementing configuration management practices is really the only way to
proactively manage the data required to quickly resolve an outage. System availability issues can get
quite complex with distributed applications, so the impact of one change to one element of a service
can have a domino effect on CIs that are down the line. And, as the scope, frequency and number of
changes increase, automating the configuration of systems enables IT organizations to improve the
success of repeatable tasks that are often subject to human error.

Thus, establishing and documenting configuration management processes is a critical component to a

successful managed infrastructure. Ultimately it keeps the CMDB intact so that dependent processes
are as efficient as possible in support of business services.

Configuration management for proactive IT management

From a strategic view, configuration management plays a pivotal role in supporting all other service
support and service delivery processes as well as asset management processes. At its core,
configuration management is about enabling proactive and service-oriented processes by actively
recognizing and reconciling actual and expected states, taking action to rectify the situation or fulfill a
requirement, and updating the CMDB to reflect the true status of the infrastructure.

A host of benefits result. First, you can reduce software overspending to a considerable degree by
having a software use monitoring process in place. Usage reports tell you which applications can be
uninstalled from one machine and re-used on another. And, importantly, configuration management
manages and reports on this process to maintain software compliance controls.

Through software distribution and patch management processes, you can control the distribution and
installation of applications in a managed environment. Coordinated with change and release
management, software distribution provides staff efficiencies and mitigates risks associated with
manual software distribution.

Having CI relationships exposed through network topology mapping and application mapping lets
you see, understand and take action, based on upstream/downstream and parent/child asset
relationships.

For example, knowing that there are 100 business users on a payroll system that depends on a
particular router and hub, which is dependent on a particular server, allows better management
decisions around planned changes. Moreover, this visibility allows the service desk to achieve better
response times for unplanned outages. Mitigating this risk is critical both for productivity purposes as
well as for process control required for compliance and governance practices.

Configuration management also facilitates trend and impact analysis for change and problem
management, key ITIL processes that contribute to lower service interruptions and greater system
availability.

In fact, business continuity and disaster recovery strategies are fully reliant on the degree to which
your current infrastructure state is documented. Configuration management processes and the CMDB
play a big role in having documented network status right at hand.

7
Technology enablers
A variety of technologies can be used to enable configuration management processes. Building on the
foundation of discovery and inventory applications and processes, a reconciliation engine is the
cornerstone of configuration management. As requests for change cycle through the IT organization,
the reconciliation engine allows you to constantly monitor the actual state of each CI to the expected
state based on the change management process. The extent to which you catch discrepancies
associated with change management processes, as well as rogue hardware and software entering the
network, determines the level of risk you impose on IT infrastructure management.

Relationship mapping of business service components is central to configuration management. Thus,

network topology and software mapping capabilities become crucial components of configuration
management. Through these technologies you can build and maintain a relevant picture of how all
assets are related. These are strategic in nature, because they allow you to see the forest through the
trees, or said differently, the “network through the assets.” With a relational repository in place, both
agent and agentless technology can be used to populate the CMDB with asset location, dependencies
and relationships and characterize assets in the context of business services.

Software distribution and patch management are central to configuration management, because they
enable consistent deployment of applications and software components. With automated discovery
tools, version and patch levels are identified for proactive management of the current software state.
The value of this becomes quite apparent in the heat of the battle when a virus strikes: understanding
which machines are vulnerable based on their application profile makes all the difference.
Automating the entire software distribution patch management process puts you in a highly proactive
stature. The combination of a centralized configuration management process with software
distribution and patch management makes it possible for IT to define and manage a Definitive
Software Library or DSL, which in turn increases the stability and predictability of what gets installed
and updated within the infrastructure.

Intrinsically tied to incident, problem, change and release management, establishing integration
points to these and other service management processes drives more value. An integrated solution is
essential. Although configuration management processes can be called out as distinct, in practice they
are intricately tied to so many processes that they should be considered foundational to any service
and asset management solution.

Best practices
Gain consensus around a federated CMDB strategy: All CI details should be in a single,
federated CMDB, a robust and relational repository that can easily integrate with other systems. This
single point of data access simplifies how people find and use the information for various processes,
and it’s more efficient to administrate.

Define an appropriate level of CI detail: Gathering and documenting the right level of detail is
an important task. Start with defining those associated with critical business servers first, then add
definition to secondary services. Many companies set the definition of a CI to be recorded at a level
of detail justified by business needs―typically to the level of “independent change.”

Define how the CMDB data is maintained: Clearly document the process flows to reconcile
between the CMDB’s expected state with inventory management’s actual state. Additionally,
document the service support processes that modify the operational state of a CI and define the
criteria necessary to commit operational state back to expected state.

8
IT asset management
Lifecycle management
IT asset management is often characterized as the discipline that covers the financial aspects of
inventory management. Whereas the financial aspect is a distinguishing element of IT asset
management, it is much broader in its scope, benefits and deliverables. IT asset management
disciplines include contract management and entitlements, costs and depreciation values, asset
leasing, maintenance and ownership status associated with each asset. IT asset management also
covers vendor management, service standardization and catalog and request management. IT asset
management has also become a pivotal discipline for meeting compliance requirements, as it enables
fiscal transparency, process control and documentation, and software license management.

Taking another, more operational view, IT asset management extends inventory and configuration
management by layering in processes that manage each asset throughout its complete lifecycle. For
each asset, there is a beginning (procurement), a middle (moves, adds, changes) and an end
(retirement). Managing this lifecycle requires a full appreciation of each process associated with the
stages of the asset lifecycle. These processes can be automated through an integrated system that
leverages inventory and configuration management systems.

IT asset management for process automation and IT efficiencies

The goals of IT asset management are:

• To establish processes that optimize the cost and the utilization of each asset

• To ensure that the supply meets the demands of the business and that IT assets directly support
specific business productivity requirements in the most efficient and reliable way possible

• To mitigate risks associated with governance practices, compliance requirements and business
continuity

These objectives can be met through core IT asset management processes:

Request management: A standardized order and approval process gives business users the
ability to order assets and to have those assets be approved though a workflow that reflects controlled
management criteria for asset acquisition.

Stock/inventory management: Stock and inventory management can fully expose existing
available asset inventory. Having a centralized capability to check stock across multiple physical
locations helps reduce the cost of unwarranted purchases by re-purposing existing stock.

Procurement: Integrated with request and stock management, procurement support allows requests
that cannot be fulfilled through existing inventory to be included in bulk purchase orders. Upon asset
delivery and acceptance, the purchase order and the individual request detail can be checked to
ensure that only requested (and approved) items are received. Alternatively, issuing the asset request
in a standardized, electronic way to corporate purchasing groups or employees―such as through an
ERP system―helps ensure that delivered assets are associated with the requester and associated cost
center.

IMACs: Installs, moves, adds and changes comprise the bulk of day-to-day work in an IT operations
organization. Standardizing and automating these processes provide tremendous efficiencies.

9
Recognizing the costs, productivity levels and cycle times associated with various IMAC types can
help establish baselines for workload distribution and can also be used for chargeback systems. For
example, IT can show exactly how many IMACs per department were conducted with specific detail
on each one, illustrating the exact resource used by any given business unit.

Software asset management: Software license contracting and utilization is a complex subject
and requires specific, defined processes to manage it effectively. Typical issues around software asset
management include overspending for the sake of meeting compliance requirements, underutilizing
license grants and entitlements, and having a lack of standardization for software titles, which causes
unnecessary support.

Contract management: Lease and maintenance contract management present considerable

opportunities to save money and increase efficiencies. Automating the cycle of lease returns results in
reduced fines and the ability to actually locate and return assets on time and in the requisite physical
state. With maintenance contacts, systems can ensure that contracts cover only those assets that are
actually in production. In- and out-of-contract repairs can be better reconciled with contract terms,
saving time and money associated with unwarranted costs.

Financial management: Key elements of IT asset financial management include cost center
budgeting, service and product pricing, and chargebacks.

Technology enablers
Effectively managing the physical, contractual and financial aspects of assets results in better cost
containment, improved services and improved risk management. The single most important enabler to
accomplishing these benefits is implementing a robust, relational repository. Of course, having the
repository in place when you build inventory management and configuration management disciplines
is the perfect set-up, lending a much faster implementation cycle for IT asset management processes.

Even more so than inventory and configuration management, IT asset management requires powerful
relational capabilities because of the inherent need to relate physical, contractual and financial status
of assts throughout their lifecycle. Fundamentally, every physical change to an asset affects its
contractual and financial status. For example, if a PC changes ownership, the cost center charge is
affected.

When a new application is installed on a PC, a software license contract needs to be related to the
installation. If a server crashes, the financial status may change so that it’s written off the books, and
operational records need to show that it’s no longer in service, and the associated maintenance
contract is updated.

The relationship among an asset, its owner, location, software licenses, physical status and financial
value is not difficult to track, but if a system does not automatically make adjustments to the various
attributes upon a change, records quickly become old and irrelevant.

Best practices
The biggest challenge of IT asset management―centralizing and controlling the lifecycle of each
asset―is also the biggest opportunity. Once an inventory is established and configuration information
is available, common best practices can result in significant cost-saving opportunities as well as
service improvements.

10
Ensure stakeholder alignment: Going beyond central stakeholders in IT operations, IT asset
management has stakeholders in contracts, procurement, finance and compliance. Because each
department is involved in discrete parts of the IT asset management lifecycle, defining cross-
departmental processes upfront helps meet multiple goals.

Establish IT asset management project milestones: Implementing IT asset management

requires careful coordination between IT and process owners. Best practices call for setting project
milestones for process definition, software implementation, integrations, training, testing and rollout.

Set specific operational and financial goals: Most ITOs initiate IT asset management projects
to gain specific, measurable results in three areas: cost control, risk mitigation and service level
improvement. Specific operational and financial goals can be set to show incremental progress
against each of these, using metrics around IT budget impact assessments, service quality levels and
decreased risk of compliance irregularities.

Standardize on hardware configurations and software license titles: Instituting

standardized practices means selecting fewer hardware configurations and software titles, which
enables significant volume purchase leverage and also reduces the burden on the service desk.

Establish periodic reviews of software usage: Set standards for how long an application
remains unused before recalling it for re-deployment on another system. There may be different
thresholds for different types of applications or different job types. For example, you might set a three-
month usage threshold for Visio or a four-week threshold for a CRM client application.

Conduct internal audits: Regularly review asset management practices to ensure cross-functional
processes are supported by automation as much as possible. Document these processes so that you
can show proactive resource control in the face of an audit.

Evolve your IT operational practices with HP OpenView

solutions
HP OpenView solutions provide enterprise customers a consolidated view into assets from a physical,
financial and contractual perspective. Assets are managed throughout their entire lifecycle,
maximizing investments, improving service quality and mitigating risks associated with corporate and
regulatory compliance issues. Contact HP for more information about its complete line of IT
management solutions.

11
 For more information
www.managementsoftware.hp.com

© 2006 Hewlett-Packard Development Company, L.P. The information contained

herein is subject to change without notice. The only warranties for HP products and
services are set forth in the express warranty statements accompanying such
products and services. Nothing herein should be construed as constituting an
additional warranty. HP shall not be liable for technical or editorial errors or
omissions contained herein.
4AA0-6093ENW, June 2006