The Provance Blog

The Provance Blog will provide you with expert advice, insights and opinions in regard to IT Service Management, Microsoft, Microsoft Dynamics 365 and Microsoft System Center.  

The Cost of Excess IT Inventory

Inventory carrying costs can be significant. Without significant volume purchase economies, costs can quickly mount. As this applies to IT assets, certain items will always be required to be in inventory based on long lead times, or as a critical component. Other IT assets however are not as prone to supply disruptions and have rapid availability. While some safety stock is required to ensure that the organization operates efficiently, carrying large IT inventories adds additional costs beyond just the asset purchases. Excess inventory introduces hard costs for warehousing, utilities and salaries, obsolescence, shrinkage, and lost proof of ownership. In addition, further soft costs are incurred through reduced ability to adapt to changes in technologies. 

Software assurance costs will continue, and will be required to keep the software current. With an active Information Technology Asset Management (ITAM) program, you will significantly increase the visibility and control of your current inventory. Your ITAM systems can connect your Human Resources or Identity Management tools (such as Active Directory) to your IT inventory to match employees to resources and identify existing availability. 

With an active ITAM program you will have details of assets in storage, by location to allow you to quickly verify your inventory position. The Provance IT Asset Management Pack for System Center Service Manager (SCSM) will also compare Software License Entitlement with Licensed Installs to determine the availability of software inventory and allow you to eliminate redundant orders. Managing Cloud licensing and portal access can be and even bigger waste if these resources go unused. Managing these assets by their user base, with contract expiry alerts will help to control these ongoing costs. An ITAM program is a must for IT inventory control, and cutting associated costs. An ITAM program will provide better information and processes and better allow your holdings to match your requirements.

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