Kevin Garten of TPI's Financial Analysis Services Group will be "blogging about the bottom line" this week.
Does asset ownership dictate who performs asset management? Not anymore. In the days of yore, asset management in an outsourcing contract was made on the basis of ownership. Today, it's based on configuration.
Originally, asset management was in reference to logging, tagging and tracking of the physical asset itself from cradle (purchase) to grave (disposal). When it came to providing asset management in an outsourcing contract (be it an ITO or BPO sourcing arrangement) the decision was made on the basis of asset ownership.
As a result, clients pushed all ITO and BPO asset ownership onto service providers to get out of the related overhead task. Clients also hoped to get out of that other laborious task called capital planning and approval. The wishful thinking especially revolved around client dedicated equipment. But clients never divorced themselves completely from involvement in the service provider's equipment provisioning process simply due to the fact that client approval is a necessity. So much for wishful thinking.
But a lot of things have changed in the provisioning of IT and BPO services. Nowadays, asset management deals not only with the physical cradle to grave tracking of yore but the tracking of software loaded on the asset, release management as well as the inter-asset interactions, connections and transactions. Assets can now report on their own status and perform rudimentary diagnostics, and that's a product of the complexity and interconnectivity of technology.
The primary change, however, came with the advent of configuration database management. To effectively provide ITO and BPO services in today's environment, a service provider must supply configuration asset management, which has profoundly impacted what a service provider must track with regards to assets.
Without asset tracking, service providers won't be able to supply the quality of service expected by clients. Configuration database management has thus become a staple in the statement of work.
Good news for clients: you can now own the assets and get out of the asset management business too.
