IT assets are the backbone of any modern organization. However, as businesses grow and adopt various productivity-enhancing technologies (like cloud computing and mobile devices), keeping track of these assets can become a challenge. This can lead to non-compliance with regulations and license agreements. That’s where IT asset management (ITAM) plays a crucial role, helping organizations stay organized and compliant.
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Understanding the Cost of Non-compliance
As a result, losing track of IT assets and failing to comply with regulations and license agreements is a huge problem because the cost of non-compliance is getting higher every year. According to a study by the Ponemon Institute and Globalscape, the average cost for organizations that experience non-compliance problems has increased by 45% since 2011, reaching $14.82 million.
One reason why the cost of non-compliance is increasing is that organizations today need to keep track of not only local and national industry regulations but also international regulations like the EU’s General Data Protection Regulation (GDPR).
There’s a lot that organizations can do to achieve and maintain regulatory compliance. One critical practice that has received far less attention than it deserves is IT asset management, which is about more than just creating a list of all software and hardware IT assets an organization uses.
What Is IT Asset Management?
IT asset management is defined by Techopedia as “a combination of business processes and practices that encompass financial, contractual, and inventory processes to support life cycle management and enable strategic decision-making for the organization.”
Simply put, IT asset management helps organizations utilize existing assets to their full potential, and it also helps them acquire the assets that can meet their needs best by informing their decision-making.
Without IT asset management, it’s easy for software and hardware IT assets to exist within the organization outside the control of the IT department or provider of managed IT services. Such assets are referred to as shadow IT. More than three in four respondents (77%) to Entrust Datacard’s survey of 1,000 IT professionals agreed that it would become a major issue at their companies if left unchecked.
Shadow IT is making many experts nervous because it creates an environment where malware thrives. Compliance with industry regulations and software licenses is virtually impossible due to shadowy assets being unpatched, misconfigured, or used in violation of their terms of service.
For these and other reasons, all organizations that care about compliance and don’t want to risk regulatory fines should embrace asset management as soon as possible.
Why is Asset Management Critical for Compliance?
As we’ve already touched upon, IT asset management is critical in helping organizations of all sizes achieve regulatory compliance. Let’s take a closer look at what makes it so valuable.
1. Regulatory Compliance
Jane Disbrow, an analyst at Gartner Inc., highlighted the critical importance of asset management when she asked, “If you don’t know where all your laptops and software are located, how can you tell regulatory bodies that customer information is being kept private?”
Indeed, organizations whose assets exist in the shadows have no idea where sensitive customer information is located and how it’s secured. Some employees might take it home with them on USB flash drives or store it in their personal cloud storage services. Asset management helps shine a light on these shadowy information flows to avoid costly data breaches.
2. Cybersecurity Vulnerabilities
Cybercriminals are looking for unpatched software applications, poorly secured cloud services, and outdated hardware devices with known vulnerabilities. They don’t hesitate to take advantage of them whenever they can.
Because of the cloud computing boom and the proliferation of bring your own device policies across organizations of all sizes, it has become challenging to keep track of software and hardware assets without an IT asset management system—let alone keep the same assets secured.
3. License Management
In 2024, small business IT spending on software is expected to be part of a global surge, with overall software spending projected to reach $1.03 trillion, up 13% from 2023. This rise reflects the increasing reliance on cloud solutions, automation, and security enhancements to boost business efficiency and resilience.
However, despite this growth in spending, many organizations still face challenges with managing their software licenses. According to the International Data Corporation (IDC), 56% of software audits result in unexpected charges due to under-licensing, often leaving businesses with hefty fines.
By implementing IT asset management (ITAM), businesses can better track and manage their software usage, ensuring compliance and avoiding these additional costs. ITAM helps optimize license spending based on actual needs rather than unreliable estimates, which are particularly risky under the Software as a Service (SaaS) model.
Simplifying Compliance with IT Asset Management
Managing complex regulatory requirements and tracking an increasing number of software licenses can be overwhelming, especially without the right tools in place. Fortunately, adopting IT asset management doesn’t have to be difficult.
If your business lacks in-house expertise, Teal can help. As a trusted technology service provider for small and medium-sized businesses, we deliver best-in-class IT asset management solutions that streamline compliance and optimize your software usage.
Contact us today to see if we’re the right partner to empower your organization.
