A new approach to asset management, which takes a more holistic, service-based approach to the information technology (IT) environment, is slowly gaining traction in the IT space.

This approach, dubbed next-generation asset management (NGAM) by Enterprise Management Associates (EMA), represents the convergence of asset, service and financial management. Rather than viewing IT assets as individual components with a discrete lifecycle, NGAM considers all components of the IT organization as contributors to IT services.

NGAM quantifiably demonstrates the quality, performance, costs and value associated with IT services, and "offers a way to change the perception of enterprise IT from a cost center to a provider of critical services to the business," says Dennis Drogseth, vice president of EMA.

In its recent report on IT management trends that will come to the fore in 2008, EMA predicted that IT organizations will be faced with increasing demands to run IT like a business, which will drive convergence between traditional lifecycle asset management and other IT management disciplines like service planning, chargeback and demand profiling, change and configuration management, and capacity planning.

"If you have a product, you calculate that asset's costs, whether they are infrastructure or operational or outsourced, as they apply to the delivery of the product," says Drogseth. "In NGAM, we see the industry moving to a parent-child relationship in IT, with service as the parent, and all supporting assets relevant to that parent as affiliated enablers."

NGAM also provides demand data, and gives companies a better view of who is using their IT services.

"Another component to that, which is a radical new idea for IT, is understanding relevance," says Drogseth. "You not only look at the cost of services, but the business value they bring and their relevance to competitive growth. There are now technologies that look at demand and consumption that can show a more direct relationship between revenue generation and IT services."

The NGAM approach encompasses service accounting, telecommunications resource management, change and configuration management, capacity planning and security. This goes beyond the scope of traditional asset management programs, and requires support for, and integration with, Configuration Management Database (CMDB) systems, change and service management systems, and service accounting systems.

This also requires investments in asset management capabilities to support lifecycle management from procurement through retirement or disposal. The scope of asset management will also have to be broadened to include outsourced services, service level agreements, and the IT services that are delivered to business customers.

Asset management software providers are beginning to address these capabilities. HP, Microsoft, PS'Soft, N(i)2 and Computer Associates now support various components of this approach.

According to Drogseth, recent market indicates that only about a third of IT organizations are now combining service planning and asset management, and another third are considering it. In a recent survey of 290 mid-tier and enterprise organizations, EMA found that:

* 30% of companies say they are organized separately by domains (network, systems, telecommunications, etc.) for asset management

* 21% manage applications and systems together, while network and telecommunications are separate.

* 18% have integrated network systems and applications, but manage telecommunications separately.

* 28% say they have a central asset management and financial planning organization that covers all of IT.

* 34 percent say that asset management and service planning are managed together.

* 29% manage services and assets separately, but are planning to bring them together at some point in the future.

"We don't view this as the way people are really practicing IT today," Drogseth says. "But this is what IT asset management needs to evolve toward."

NGAM closely mirrors asset management trends in other segments, like manufacturing, which have taken this holistic approach to measuring the cost and value of operating assets (like plants and equipment) within the context of creating an end product. In the case of IT, this "end product," however, would be the service provided to end users by the technology assets.

There has also been a trend toward more unified and cohesive configuration management databases that provide information on service relationships, topology and performance-related information.

"That adds a whole other dimension," says Drogseth. "Assets have often been viewed fairly statically as objects that you purchase and then retire. With NGAM, they are looked as a performing contributor. Its wellness and relevance to defined services, how it is configured, an compliance issues, are all relevant to the lifecycle management of that asset.

"Ultimately, this is about being able to bring value to the business," Drogseth continues. "How do I optimize to support business competitiveness from a cost perspective? In order to understand how to optimize, you have to think about relevance and impact, and you need to have the tools to help you assess those."