Companies Throw Money away with Their Old assets

IT asset management comprises the entire lifecycle of hardware and software-from requisition to deployment and management to retirement and disposal. But some companies fail to harvest the value that remains in their assets at the back-end of that life cycle, industry sources say."Typically, companies use their assets for about four years," says Patricia Adams, principal analyst with Stamford, Conn.-based Gartner Inc. "When they retire them, they'll sometimes stick them in a closet rather than pay someone to take them off their hands." As a result, companies are essentially throwing money away, by neglecting to recover reusable software, by paying for storage space they don't need, and, in some states, by paying property taxes on equipment they no longer use.

In addition, companies often don't recover the full value of their IT assets when they dispose of them, according to Paul Baum, CEO and founder of PlanITROI Inc., a Denville, N.J.-based firm that specializes in IT asset retirement.

PlanITROI has written checks in the amount of $100,000 to $2 million to the CEOs and CFOs of Fortune 500 companies that have used the company's asset retirement services. The company is able to do this because the value of the assets often exceeds the cost of the retirement services.

In addition, Baum notes, the insurance industry has an additional incentive to pay more attention to how it disposes of its IT assets-namely, laws such as the Health Insurance Portability and Accountability Act (HIPAA) and Gramm-Leach-Bliley, which require the companies to protect personal information stored on hard drives and to document that disposal.

Baum advises insurers to make sure they receive detailed reports from their asset retirement firm-reports that list serial numbers along with how and where each device was retired. "Most corporations-I would say 60% to 70%-do not receive a report from their recycler, independent contractor or OEM that says 'this asset was dealt with in this way,'" Baum says.

In addition, when a hard drive is erased by a firm such as PlanITROI, Baum says it's also important for insurers to receive a map from their service provider showing the data on each drive before it was removed as well as after. "Before a disk is wiped clean, it has a distinct map of all the information on it," he says. "After you wipe it clean, that map is the same for all disks that are erased to the Department of Defense Level 7 standards," he says.