What is Hardware Asset Management (HAM)? Why is it Important?

Managing hardware assets, manually, from the time they are purchased to the time they are disposed of is a tedious, cumbersome task that is susceptible to many errors. These manual and scattered processes are often inaccurate and difficult to manage.

Manual data keeping means that asset information is stored in silos, which raises the overhead expenses, increases the likelihood of asset theft and losses, and makes it hard to comply with the organization’s standards and regulations.

To establish an effective and successful IT infrastructure management, an organization needs dedicated software for hardware asset management that helps in streamlining the entire process.

To help you better understand what hardware asset management is, we have covered the following topics in this blog:

1. What is Hardware Asset Management (HAM)?
2. What is the Hardware Asset Management Lifecycle?
3. What are the benefits of Hardware Asset Management?

What is Hardware Asset Management (HAM)?

Hardware asset management is the process of managing physical IT components like desktops, laptops, servers, etc. throughout their lifecycles from procurement to retirement.

With the hardware asset management process, you can get real-time details of your hardware asset inventory, a bird’s-eye view of the asset life cycle, and an overview of how assets are used in your organization.

Hardware asset management is a critical part of IT asset management. It must be integrated with the organization’s overall scope and must be aligned with other ITIL processes.

Few of the core tenets of Hardware Asset Management is to control costs, restrict excess purchases, have a complete insight of IT inventory, and always be audit-ready.

With the employment of the right hardware management processes, the time spent in requesting, repairing, maintaining, and acquiring hardware assets can be significantly reduced. As a result, an ITSM team is free to focus on more value-producing tasks.

Primary Components of Hardware Asset Management 

1. Hardware Inventory 

Hardware inventory is a record of all the hardware assets like:

• Workstations
• Servers
• Networking devices
• Peripherals

It acts as a fundamental database that is used for managing, tracking, and optimizing hardware resources.

2. Asset Identification and Tagging

This includes tracking and managing various hardware assets by assigning barcodes and asset tags. These unique identifiers help you to locate and identify these assets in a jiffy during maintenance and audits.

3. Lifecycle Management 

We’ll talk about life cycle management in detail in the below section. In a nutshell, it involves overseeing hardware assets from acquisition through deployment, usage, maintenance, and eventual decommissioning.

4. Maintenance and Repairs 

As the name suggests, this includes everything from regular scheduled maintenance, repairs, and updates that ultimately enhance the performance and functionality of hardware assets.

5. Software Asset Integration 

This one includes integration of both HAM (Hardware Asset Management) and SAM (Software Asset Management) by tracking software licenses, versions, and usage in conjunction with hardware assets.

6. Reporting and Analytics

Reports and analytics give you key insights which offer greater visibility into asset:

• Utilization
• Cost
• Compliance Status

What is the Hardware Asset Management Lifecycle?

Hardware assets, like software assets, have a complicated life, which needs to be handled in a somewhat different manner. Every asset, no matter how large or small, expensive or cheap, goes through five main stages.

The stages are as follows:

1. Procurement

Procurement is the first step in the asset life cycle, and it involves the actual purchase of the asset to satisfy both the company’s requirements and the budget.

Typically, the purchase is made after understanding the requirements discovered from gathered data, and then projections are prepared to validate the actual purchase.

The processes involved in this step are:

• Creating purchase orders
• Initiate Pre-determined purchase order workflow
• Associate with cost centers for budgets
• Acquire approvals for purchase order
• Adding purchased assets to the IT inventory

2. Deployment

The asset is deployed in this stage of the lifecycle. Preliminary checks are performed to assess for physical defects, engineering issues, design problems, and whether the asset has been installed properly and securely.

Following these steps, the asset is finally utilized to meet the requirements for which it was purchased.

The activities incorporated at this stage are:

• Deploy assets, modify status from inventory to in-use
• Assign software to a hardware asset
• Map relationship

3. Maintenance

Due to the constant usage of an asset, wear and tear is a common occurrence, so maintaining the asset becomes extremely important. This is why maintenance is the third step in the lifecycle.

When an asset is being utilized, the primary goal is to maximize the asset’s productivity. So the performance of an asset is constantly monitored for any issues that might suddenly occur when it is being used.

In this stage, any kind of patch repairs, updates, compliance audits, and cost-benefit analysis are possible.

The processes included in this step are:

• Schedule scans
• Get audit history and complete ownership tracking
• Software compliance
• Calculate asset depreciation
• Ascertain the asset’s total cost of ownership

4. Support

With the increasing age of an asset, maintenance and support help to extend its productive life. In this stage, amendments and updates are performed to bring the asset up-to-date, rendering it to become productive for the overall IT efficiency.

The processes involved in this stage are:

• Contract maintenance for assets
• Notifications to technicians about expiration dates
• Dependency mapping in CMDB to identify the impact
• Software license agreements and management

5. Retirement & Disposal

An asset must be disposed of at the end of its useful, productive life. Before its disposal, the relationships are reviewed and processed so that it does not affect the organization or the environment.

This stage includes removal of any business-critical information on the asset.

It is then disassembled part by part, with all pieces that can be reused being retained and those that cannot be reused being scrapped.

If the asset contains any components that may pose an environmental threat, they are classified as hazardous and eliminated.

The activities incorporated in this step are:

• Changing the status from in-use to expired/disposed
• Un-allocating the software assigned to the disposed asset

What are the Benefits Of Hardware Asset Management (HAM)?

1. Save Costs

Properly managing hardware assets throughout its lifecycle can help save money. One of the reasons being, when assets are properly serviced and maintained, the chances of their failure reduce.

Disposing of an asset when it reaches the end of its lifecycle, can also help you save a lot of maintenance costs.

2. Improve Asset Procurement and Utilization

Hardware asset management can help you make the most of your organization’s inventory by leveraging underutilized assets.

Getting full insights into the inventory and understanding what is available can aid you to draw inventory from the existing stockpiles rather than making purchases that affect the budget.

3. Enhance Security and Compliance

With the employment of a HAM solution, you can get a comprehensive and precise view of hardware assets that can help you identify assets that need maintenance or are nearing retirement so that they can be repaired or disposed of before they become a security threat to your organization.

By keeping track of your asset inventory, you can detect any assets that have not been approved to ensure compliance to align with your organization’s policies. This will not only help to swiftly isolate vulnerabilities but also help during compliance auditing.

4. Amplify Control Over IT Inventory

Hardware asset management can help you get a better understanding of your hardware assets so as to establish transparency and better control over your IT inventory.

You can monitor the hardware inventory information to verify that they are in the correct place by using ITAM features such as asset discovery and request verification.

5. Prevent Asset Theft

Asset tagging, allocating and retracting ownership, location tracking, and routine maintenance are all part of HAM.

Hardware asset management enables you to accurately track and document information like hardware warranty details, contract agreements, licensing renewal and compliance, and maintenance status to reduce risks and avert asset theft.

6. Boost Efficiency

With hardware asset management in place, IT teams can concentrate on more value-producing work by leveraging automation of redundant and inefficient processes.

Tracking hardware inventory can also help them identify asset issues before they even occur, which might cause delays or disruptions in operations.

HAM vs SAM

	HAM	SAM
Nature of Assets	HAM deals with tracking, monitoring, and management of physical tangible assets like computers, mobiles, servers, networking equipment, etc.	SAM involves tracking, managing, and monitoring of intangible assets like digital programs, applications, software licenses, subscription, etc.
Lifecycles	Stages of HAM include procurement, deployment, maintenance, upgrades, and disposal or retirement.	Stages of SAM include acquisition, deployment, usage monitoring, license compliance, and retirement.
Cost Management	Involves budget allocation optimization by tracking costs related to hardware acquisition, maintenance, and repairs.	Minimizes unnecessary expenses by cost-effective utilization of subscription and software licenses and subscriptions.
Compliance and Licensing	Ensures compliance with hardware manufacturer agreements and warranties.	Ensures compliance with software licensing agreements.

Best Practices for Effective Hardware Asset Management 

1. Use a Tool to Manage Hardware Assets 

To manage hardware assets efficiently, consider using a tool instead of a spreadsheet. Spreadsheets can get confusing and consume a lot of time, leading to human errors.

Whereas tools purpose-built for hardware asset management help you organize and keep track of IT hardware in a much easier and more efficient way.

2. Begin with Simple Data and Lifecycle 

Trying too many things early on is a recipe for failure, and this applies to hardware asset management as well. One of the best practices during the initial stage of hardware asset management is to work with one device at a time.

For this, you can start with the most critical device.

3. Regular Audits and Reconciliation 

Conduct regular and periodic audits for reconciliation of the physical inventory with the recorded assets in the database. This helps you identify discrepancies and take corrective actions.

Challenges of Hardware Asset Management

1. Absent or Manual Inventory Management 

One of the major hardware asset management challenges arises when there’s lack of a well-organized inventory system. With this, your organization won’t have answers for questions like:

• What hardware assets are present?
• Who is responsible for hardware assets?
• How are assets being maintained?

Companies trying to resolve these issues often resort to methods like makeshift tools and spreadsheets. But these methods are no substitute for purpose-built solutions.

Another related challenge is the manual approach to inventory management. This approach is highly impractical and also prone to inaccuracies in asset tracking. Apart from this, it demands a significant amount of time in asset discovery and cataloging.

2. Hardware Change and Obsolescence 

IT assets, whether hardware or software, come with a limited lifespan. Over time, hardware wears down and software needs updates for newer versions.

This sounds like a trivial issue. But things become way more complex for bigger organizations where these assets are in thousands. In such cases, not having a proper ITAM and HAM tools can be an invitation for chaos.

3. Service and Support 

The IT team won’t be able to offer the service and support if they don’t know what assets are involved. In such cases, hardware asset management protocols play a crucial role by keeping information about:

• Asset history
• Asset configuration

This information will eliminate the need for spending time on researching every time there’s a service call. This boosts the resolution time, making the IT team more productive and efficient.

Hardware Asset Management: Future and Trends  

As per FMI’s projections, the global market for hardware asset management which was at US$ 24 billion in 2022 is expected to reach US$ 26.17 billion in the year 2024.

According to the same report, HAM is expected to grow at a CAGR of 13.2% from 2024 to 2033, reaching US$ 92 billion in 2033.

These numbers show the booming market for hardware asset management. Now, let’s have a look at some top trends.

1. Cybersecurity and Data Privacy Compliance 

Cybersecurity threats are on the rise, and they are not going to slow down anytime soon. This calls for increased focus and emphasis on adopting effective cybersecurity measures in hardware asset management.

These measures mainly focus on protection of sensitive data associated with hardware assets. Secondly, it also focuses on ensuring compliance with the respective data privacy regulations.

2. Sustainable IT 

There are multiple legislations that call for sustainable IT practices to protect the environment. Some of those legislations like Digital Fair Repair Act directly affect hardware asset management.

It requires electronic device manufacturers to offer third-party repairs and consumers with tools along with instructions to repair the devices. These practices make IT hardware assets more serviceable.

It also extends their life by a significant amount. In the coming days, we might see organizations adopting sustainable IT to improve their hardware asset management.

3. Cloud-based Asset Management 

We are already seeing many organizations moving their hardware asset management to cloud. This will become even more prevalent in the coming days. Cloud allows organizations to have a centralized storage for:

• Asset data
• Remote access
• Real-time access

This helps organizations to establish streamlined collaboration, improve efficiency, and higher cost-effectiveness.