Governments cut costs, grow savings managing wealth
- By Ethan Butterfield
- Apr 07, 2006
In the search for better, cheaper, more efficient government services, some states and municipalities are turning to asset management, an IT concept that offers an enterprise view of an organization's holdings.
State and local governments are following in the footsteps of the private sector, which for years has used asset management systems to drive savings and manage large volumes of resources, both technical and nontechnical.
Without a single IT system to track a government's complete inventory of assets ? from computers, servers and systems to vehicle fleets, land and buildings ? the threat of overlooking and under-reporting assets is high, industry experts said.
An asset management system, linked to other state IT systems such as enterprise resource planning, lets a state administer all of its holdings governmentwide. Often, asset management is done ahead of an IT consolidation or outsourcing project, as the state and IT contractor grapple with cataloging holdings of various agencies that need to be incorporated into one system. This lets the state save tens of millions of dollars.
"The heart of [asset management] is the savings implications," said Bob Cucchi, IBM Corp.'s public sector asset management executive.
Today, several large state agencies, including the California Franchise Tax Board, Iowa Public Safety Department, North Carolina's Information Technology Services Office and Oklahoma Central Services Department, are considering asset management implementations, according to Federal Sources Inc., McLean, Va.
Asset management systems are fairly new to state and local governments, said Jim Krouse, director of state and local market analysis with market research firm Input Inc., Reston, Va. Ten years ago states were only talking about acting like the private sector; now they're doing it, he said.
The data collected in implementing an asset management system can yield a performance profile for IT equipment and products, prompting governments to reflect on when they buy particular products and whether the purchases make sense.Standalone approach
While implementation sometimes is done as part of a larger project, asset management systems also can be deployed on their own, said Cucchi, who oversees an asset management system implementation for the Georgia Technology Authority.
"The approach was to eliminate inefficiency, of which we found a whole bunch, then the savings would follow," he said.
In February, IBM landed an eight-month, $2.9 million contract to implement Bedford, Mass.-based MRO Software Inc.'s software to track and manage Georgia's IT, fleet and facilities inventory.
IBM and MRO will train Georgia employees to run the system, giving the state more control over its assets. Georgia's new asset management system will save it an estimated $25 million in the first year, according to an IBM statement on the project. Much of the savings will come from consolidating multiple asset management efforts by disparate agencies into one, Cucchi said.
Total savings for the state would not be known until the implementation is done and all assets are accounted for.
Not every asset management system covers all commodities. As part of its longstanding outsourcing contract to manage Anaheim, Calif.'s IT operations, EDS Corp. also manages the city's IT assets. The city's previous process involved physically counting computers, servers, printers and other IT assets, said Jeff Rapini, EDS' technical operations manager in Anaheim. Among the city's biggest concerns was that equipment kept disappearing, he said.
EDS' solution, featuring server-based tools from Microsoft Corp. and Hewlett-Packard Co., has solved the problem.
"We have daily asset tracking," Rapini said. "If a device leaves the network, the network knows immediately."
Such tracking capabilities help protect sensitive data. EDS is testing the use of radio frequency identification chips to help track and manage Anaheim's IT equipment, which could prevent theft of important information, Rapini said.Risk reduction
Other systems integrators have significant asset management projects under way with state and local government. As part of a three-year, $13 million ERP contract with Denver's Regional Transit District, Ciber Inc. of Greenwood Village, Colo., will implement an asset management solution from Maximus Inc. of Reston, Va., to manage fleet operations and maintenance.
BearingPoint Inc. of McLean, Va., also has asset management offerings. The company announced a partnership with MRO to pursue asset and service management work.
Without an asset management system, a state or local government could miscalculate its true worth, Cucchi said. They need a comprehensive enterprise solution to manage what they own, he said. Governments that don't have a solution risk inventory and accounting errors, because solutions often are trapped in silos.
"You're not going to capture the appropriate picture, and that could have significant ramifications if you're doing a statewide business requirements analysis for some other type of system, such as an ERP system," Cucchi said.
Staff Writer Ethan Butterfield can be reached at firstname.lastname@example.org.