Asset Recovery: Remove, Remarket, Recycle, Report
February 21st, 2012 By: Industry Perspectives
Michael J. Saia is President of XTechnology Global and has been in the electronics manufacturing and distribution markets since 1983.MICHAEL SAIA
Asset Recovery Services
Today CIOs are constantly searching for ways to cut costs and increase efficiencies. Having a comprehensive asset recovery plan to handle end-of-life equipment from the data center to the desktop — including enterprise, wintel, networking and telecommunications equipment, PCs and laptops can assist on both fronts.
Asset recovery presents an opportunity to provide a revenue stream back into the data center and IT budget. Due to cloud migration, greening of the data center, virtualization, platform change or equipment refresh, gear is becoming obsolete and rotated out faster than ever.
Because acquisition is always more interesting that disposition, IT managers are focused on the strategic platform of procurement, installation and maintaining the selected hardware platform. Disposition is often overlooked, and therein lies the opportunity. An asset recovery plan can provide a new found revenue stream from the resale or recycling of end-of-life assets. In addition, a proper environmental sustainability program can also be implemented. This is becoming more important because state and federal legislation is making dumping or exporting e-waste into landfills illegal.
Forward-looking companies that practice a well-managed asset recovery programs will minimize and eliminate risks (data breach) while maximizing upside potential (new revenue). The priority is to find the optimum combination.
Considerations for asset recovery include:
- Data Security
- Maximize R.O.I. on assets to the organization
- Minimize risk/cost
- Enhance the reputation to the organization for responsible environmental stewardship
Data Security tops the list, storage media should be sanitized properly, at minimum a DoD 5220.22m software wipe or preferably a wipe that adheres to NIST 800-88. This is the U.S. Department of Commerce instruction on media sanitization and has the latest and most up-to-date guidelines. Additionally, degaussing and physical shredding meets the standards, though it’s not a green solution. Your provider should issue certificates of data sanitization and give you a report that also includes data such as: part number, serial number, asset tag number, date and type of program run. Once complete, the report puts you in compliance with the following:
- Sarbanes Oxley
- Gramm Leach Blily Act.
Maximizing Return on Investment on End-of-Life Assets
If the assets are re-marketable, the asset management partner should be able to provide quick market intelligence to make a tender offer on the retired equipment. Additionally, the partner should be able to provide several types of programs that include consignment and revenue sharing. The recovery market on trailing-edge equipment or sunset technology products is extremely large. If the equipment is not too old, then it may continue to have some value.
Cost and Risk
Asset management programs should be at minimal cost and risk. Having to store products in either a warehouse or in the data center is not cost-effective. Once equipment is deemed end-of-life, the quicker it can be re-marketed, the higher return on the gear. The appropriate partner should be able to provide logistical support, packaging, and a comprehensive asset report as to what is removed down to the component level, if needed. This includes asset tags, serial numbers and corresponding hard drive part numbers and serial numbers that relate to each unit. Full reporting is a must.
Environmental Stewardship and Corporate Green Policy
Due to current state and federal legislation, electronics and computer products can no longer be exported or disposed of in landfills. It is crucial that the partner selected have the appropriate certifications such as ISO 14001:2004, ISO 9001:2008, OHSAS 18001:2007 and R2, Responsible recycling. [Environmental Protection Agency (EPA) directive.]
These standards allow for an audit trail of the client’s equipment and during every step of the process you know where the equipment is. Compliant companies are not the same as certified ones. When there is no resale value of the equipment, recycling of products is critical to the client’s environmental stewardship. It is a must that the selected partner provides certificates of recycling once the equipment is disposed of. This usually includes a de-manufacturing process that breaks down the gear into it respective commodity product for recycling. Your partner should provide an EPA report based on the Waste Reduction Model (WARM) to show you the results of your recycling efforts.
The Bottom Line
IT assets are being decommissioned at a high rate due to today’s dynamic market. Efficiency in recovering value in these assets while maintaining data security is paramount to the success of any organization. Whether through resale or recycling, money back into the IT budget is a plus, and a successful asset recovery program can provide this. With the right partner, a client can choose any number of programs to return dollars back to the organization. This should allow for a strategic and profitable partnership.
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A very interesting piece of information with a fresh perspective on asset management encompassing every element. There are a bulk articles out their covering security and recovery of assets but I love that you’ve incorporated sustainability as one of the key points. You make very valid points. Loved reading your post. Concise, clear and so well drafted.