In today’s competitive business landscape, optimizing IT asset management (ITAM) is crucial for enhancing operational efficiency and achieving cost savings. This white paper presents a comprehensive Return on Investment (ROI) calculator designed for organizations seeking to improve their IT asset management practices. By focusing on both capital expenditures (Capex) and operational expenditures (Opex), this model illustrates how enhanced hardware (HW) asset visibility and accuracy can lead to significant financial benefits.
IT Asset Management Efficiency
IT asset management is an essential practice that involves the oversight and risk management of IT assets across an organization. Effective ITAM strategies ensure optimal asset utilization, compliance, and governance, while minimizing risks and costs associated with IT assets. However, achieving a high level of IT asset visibility and accuracy can be challenging (IoT Inventory).
This article introduces a ROI calculator that quantifies the potential savings and efficiencies gained from improved ITAM practices, the potential savings will be significantly higher when taking into account the possible damages from a cyber attack, but as you will see below, even when putting security aspects aside, the ROI is positive and clear.
ROI Calculator Model
The ROI calculator is divided into two main sections: capital expenditures (Capex) and operational expenditures (Opex) savings (Capex vs Opex). It incorporates variables such as hardware cost, depreciation period, maintenance cost coefficients, and the annual cost of Full-Time Equivalents (FTEs) associated with ITAM tasks.
The model calculates annual savings from improved budget allocation, Hardware inventory accuracy, maintenance cost savings, and operational efficiency gains.
Capex Savings Calculation
- Hardware Cost (C1)
- Depreciation Period (P1)
- Improved Hardware Budget Allocation (P2)
- Improved Hardware Asset Inventory Count (P3)
- Annual Capex-Related Cost Savings (T1): (C1/P1)*(P2+P3)
Opex Savings Calculation
- Maintenance Cost Coefficient (O1)
- Improved Accuracy of Hardware Asset Count (A0)
- Annual Maintenance Cost Savings (T2): C1*O1*A0
- Host Count Based Cybersecurity Expense (O2)
- Improved Accuracy of Host Count (A1)
- Annual Saving on Security Products (T3): O2*A1
- Annual Cost of Full-Time Equivalent (FTE) Associated with ITAM (C2)
- ITAM Process Streamlining Effect on FTE (A2)
- Annual Saving on FTE Resources (T4)
ROI Calculator Case Study: A 5000 Employee Organization
The model applies to a hypothetical organization with the following parameters:
- Capex: A total annual Capex-related cost savings of $300K was identified.
- Opex: The model calculated Opex-related annual savings of $200K across maintenance, cybersecurity, and FTE resource optimizations.
The total annual cost benefits were estimated at $500K, with an investment in enhancing ITAM practices estimated at $150K.
This results in an ROI of 3.33, indicating that for every dollar spent, more than 3 dollars are returned in value.
ROI Calculator for IT Asset Management
The ROI calculator for ITAM demonstrates that investing in better asset visibility and accuracy not only enhances operational efficiency but also offers significant financial returns. Organizations looking to improve their ITAM practices can leverage this model to make informed decisions and justify investments in ITAM solutions.
About Sepio
Sepio is at the forefront of ITAM innovation, providing solutions that offer unprecedented visibility and accuracy in asset management. By optimizing ITAM practices, Sepio helps organizations unlock significant cost savings and operational efficiencies.
For further information on implementing this ROI calculator within your organization or to learn more about Sepio’s solution, please contact us.
