That simple question is at the heart of effective hardware asset management. The growing popularity of cloud services obscures the reality that technology is ultimately made up of physical equipment. As Andrew Blum explained in his 2012 book Tubes: A Journey to the Center of the Internet, the Internet depends on physical infrastructure. What does this reality mean for today\u2019s IT managers?\nSeveral trends are drawing increasing attention to hardware asset management. Security threats remain a significant risk for many industries, yet physical security leaves much to be desired at data centers and other facilities. Second, executives and corporate directors are looking for greater clarity regarding technology spending, and that includes spending on hardware. Fulfilling audit requirements and demonstrating effective oversight are two more reasons for adopting a structured enterprise hardware management program.\nAligning with best practices: ISO standards\nManaging IT assets is no longer an anything goes process. \u201cThe ISO 19770 standard, originally applicable to software, was expanded to all IT assets in 2015,\u201d says Sherry Irwin, president of Technology Asset Management, a consulting firm based in Mississauga, Ontario. \u201cMany organizations focus their hardware strategy on reliability and having backup equipment.\u201d\nAnalytics is an unexplored option for improving hardware asset management. \u201cI don\u2019t see many organizations that have an enterprise-level analytics on their hardware, and the varying data provided by hardware manufacturers make this challenging,\u201d Irwin says. Applying IT\u2019s analytics to managing assets is an excellent way to demonstrate leadership.\nSoftware to manage hardware assets\nMany organizations continue to rely on spreadsheets to manage their technology assets, so IT leaders have an opportunity to improve the process by using professional tools. Most of the leading asset management tools on the market have the ability to manage software and hardware assets. According to Capterra, a service that rates business software, the top five vendors of IT asset management software are SolarWinds, ManageEngine, Oracle, CA Technologies and IBM Tivoli.\n[ Related: 15 signs you\u2019re doing agile wrong ]\nCA\u2019s IT Asset Manager has quickly become one of the most popular products on the market. It handles software and hardware assets, and CA says it has achieved significant benefits from using the product internally. According to an August 2015 report, CA saved $23 million on IT assets over a seven-year period.\nBefore it started using Asset Manager, the company experienced several hardware asset management problems \u2014 for example, new assets were purchased even though existing assets had not been fully used. In addition, many departments maintained their own hardware asset-tracking processes, which led to inefficiencies at the enterprise level.\nCA now manages an inventory of more than 130,000 items, including networking equipment, desktop computers, servers and peripherals. \u201cWe have also made good progress in optimizing data center assets,\u201d says Mike Avenel, CA\u2019s product manager for IT Asset Manager. \u201cOverall, we have been successful in reducing the number of devices at our organization.\u201d\nRecognizing an opportunity, a number of other vendors have entered the IT asset management market. At present, many of the leading products emphasize managing software licenses and related assets. But selecting an asset management system is only one part of the solution. A willingness to set up an enterprisewide asset management program is essential if you want to get the best results.\nSeveral trends are turning hardware management into an especially thorny problem. \u201cThe consumerization of IT and the growing use of mobile devices such as smartphones and tablets pose challenges to effective hardware management,\u201d says Avenel. \u201cStatic devices such as desktop computers are relatively well understood at companies with mature hardware management. [But the use of] non-company-owned devices and the bring-your-own-device (BYOD) trend are still comparatively new.\u201d\nEnvironmental benefits and cost savings\nOptimizing hardware management offers several benefits. For example, \u201csome organizations are focused on the environmental benefits of managing hardware to reduce waste,\u201d Avenel observes. Electronic waste is a major concern for governments and companies. In Australia, there are\u00a0more than 25 million unused mobile phones, according to MobileMuster, a not-for-profit mobile phone recycling program supported by the Australian cellphone industry.\nGiven that mobile phones involve difficult-to-obtain raw materials such as rare earths minerals, there\u2019s a case to be made for recycling. According to the UN\u2019s STEP (Solving the E-Waste Problem) initiative, over 70 million tons of e-waste was produced in 2015. Several large companies, including Dell and Microsoft, currently run programs to address the problem.\nAnother benefit of effective management of hardware assets is that it can help companies save money by enabling them to get the most out of their existing IT assets.\n[Related: Businesses lack a streamlined approach to digital transformation]\n\u201cThe starting point for an effective program is to create an inventory of all IT assets,\u201d Avenel says. \u201cNext, additional data is required to understand those assets \u2014 such as warranties, maintenance status and financial information.\u201d Armed with an inventory and all the relevant information, managers will be better informed when it comes to making IT procurement decisions. However, large organizations face special challenges. \u201cIf you are running multi-national organization, there may be tax implications in transferring IT assets from country A to country B, so it is important to investigate that aspect before proceeding,\u201d Avenel cautions.\nThe difference between success and failure\nSeveral factors contribute to the success of a hardware asset management program, and the most important element may be executive buy-in.\n\u201cEffective executive sponsorship is essential, because this effort requires process changes and internal education,\u201d Avenel says. \u201cThe planning process begins with building a holistic business case for [IT asset management]. That includes managing operational risk and compliance matters. In addition, the business case will likely show that [asset management] improves business agility, because management will be better informed.\u201d For example, an organization might be able to devote more resources to innovation if it saved money on hardware upgrades with an effective asset management program.\nHowever, as CA\u2019s experience shows, obtaining benefits from hardware asset management takes time. \u201cEven if everything is set up correctly, there is still potential to fail because management may not provide sufficient resources. [Asset management] is a journey that needs to be sustained,\u201d Avenel says. \u201cIT asset management processes generate large amounts of data, and it takes time to organize that data and find insights.\u201d Once those insights are clear, IT leaders need to collaborate with their peers in finance and procurement to make better decisions. Without an enterprise view, IT asset management projects and technologies will create limited value.