The discussion kicked-off with the process used by an energy company for IT surplus management. Briefly, it consists of the following:

Equipment is sent to a central warehouse where a form with general info is filled out and the equipment is added to a master list. Monthly committee meetings of their cross functional team (IT, IR, storeroom, etc) reviews the list:
  • List is sent to business managers for re-deployment
  • Re-deployable items are removed from the list
  • The following month the remaining list becomes “surplus”
 Job is bid out to 3 certified recyclers. These suppliers are then audited to ensure drives are wiped, etc.
 

Who owns the risk?

A discussion followed about ” owning the risk” of data security, with several horror stories of sensitive data going outside the company.
 

Best practice: Have a signature form that covers the group internally responsible for wiping the drive.
What makes a good client/vendor relationship? Although this topic was discussed in terms of IT Surplus Management, the principles certainly relate to most all relationships with outside suppliers and IR departments.

 

The Vendor perspective:

  • Trust
  • Communication – detail = value
  • Accurate info, pricing, certificate of destruction
  • Client providing all pertinent info
  • As much detail as possible— too little information results in “worst case scenario” bids
  • Selling “blindly” can affect reputation because of inaccurate data
 

The Client perspective:

Factors considered when choosing a vendor:
  • Convenience
  • Location & logistical support
  • Trust & personal relationship
  • Vendor must understand client risk profile—how the client wants equipment disposed
 When can things go wrong?
  • Consignment
  • Equipment taken from multiple companies can get lost
  • Seller is pushing the commodity, not the specific piece of equipment
  • Commission structure disincentive – if your payout is less than someone else’s for the same piece of equipment, yours will sit longer
  • Lack of management controls in place to track your assets
  • Small fish, big pond

Things to Consider:

  • Don’t throw the whole building— pick out valuable items
  • Set a time limit—scrap items after that has passed
  • IT assets depreciate quickly and don’t age well—Think, “Red meat, not red wine”
  • Get the facts out fast. Clients need to know immediately if there is a problem or discrepancy.
 Reprinted from ASSET 2.0, the Investment Recovery Business Journal, Vol. 5, 2008

© The Investment Recovery Association