ITAD, or IT asset disposition, is an important part of a corporation, but many CFOs downplay its importance. It’s often treated as a basic disposal task, but it’s much more impactful and important than your typical disposal process. There are hidden costs, compliance risks, and missed financial opportunities that CFOs just aren’t seeing. These issues can arise if the importance of the ITAD role is not recognized and thus not prioritized. We’re going to look at what CFOs get wrong about IT asset disposition and what it costs them in the long run.
What is IT Asset Disposition?
ITAD is not just about disposing of old computers; it’s about wiping data and ensuring the security of devices that are no longer in use. There are a few key components of the ITAD process, including data destruction, asset tracking, resale, and recycling. Each stage helps to clear the device and prepare it for its specific disposal method. ITAD is an essential component of a corporation, supporting data security, legal compliance, and financial recovery, ultimately benefiting the business. Having a well-thought-out ITAD plan is important to ensure your business handles ITAD properly and avoids data breaches, fines, and legal trouble.
What CFOs Get Wrong About IT Asset Disposition
CFOs often misunderstand IT asset disposition and its importance to the business. Many think that it’s just another regular disposal practice, it doesn’t need to be monitored, and there aren’t any risks associated with it. Here’s a look at what CFOs get wrong about IT asset disposition and what it costs them:
Treating ITAD Just as an Expense
Many Chief Finance Officers view ITAD as just another expense on their books, but it’s more important and complex than that. These assets often have resale value, and they need to be properly wiped, not just thrown in the trash. Many corporations use hundreds of electronic devices that will need to go through an ITAD process, and there is revenue to be made from the reuse and resale process as well.
Not Taking Data Security Risks Seriously
Data security risks are among the most important, if not the most important, reasons why ITAD practices should be put in place. Many CFOs think that basic wiping practices will be enough, but that’s not the case. There are strict destruction and wiping processes for ITAD devices that should be followed to minimize data security risks. Without proper wiping processes, data can be recovered from devices,s which can lead to data breaches, penalties, and damage to the company’s reputation.
Inefficient Tracking and Documentation
The process through which these unused devices go through must be tracked and documented so that it’s known where the devices are and how they were disposed of. For audits and compliance, proof of proper handling is required, and that’s where the documentation comes in. If the cycle of these assets isn’t properly documented, this could lead to audit failure, fines, and operational confusion.
Vendor Selection
Price can be a factor when choosing a vendor, but it shouldn’t be the deciding factor. Selecting a vendor should be a detailed process in which the vendor’s experience and credentials are evaluated, rather than focusing on which vendor offers the better price. Cheap work isn’t always the best work, and in ITAD processes, it is crucial to ensure the work is accurate.
Ignoring Compliance Standards
Compliance standards and regulations, such as GDPR, HIPAA, and local e-waste regulations, are in place to protect e-waste and data. If you’re not following the compliance standards and regulations in place, you may face fines, loss of certifications, and legal issues.
Not Putting ITAD into Financial Plan
Many CFOs don’t include the ITAD budget in the financial plan, which can lead to insufficient allocation for that category. It should be funded efficiently to ensure adequate resources for a proper IT asset disposition plan. Failing to incorporate it into the financial plan can result in missed forecasting opportunities and inefficient capital allocation, leading to inadequate funding for ITAD.
How Should CFOs Approach ITAD?
Recognizing these misconceptions can help you better prepare for an ITAD plan that is efficient and compliant. Here are some of our top tips for how Chief Finance Officers should approach IT asset disposition:
Treat it as a Value Recovery Strategy.
You can build out processes to recover value from retired assets, and partner with vendors that offer resale.
Prioritize Data Destruction
CFOs should require industry-standard methods, such as certified wiping or shredding, to ensure data is properly destroyed. You should also demand proof of the destruction for verification purposes.
Implement Asset Tracking
Having strong asset-tracking systems can help you maintain the required detailed records from the point of purchase through the disposal process. There are many asset management software available that can expedite this process.
Choose Vendors Diligently
Make sure to look for certifications, references, security and compliance practices, and the overall track record of vendors before awarding contracts to them. These ITAD partners must be knowledgeable, honest, and compliant in IT asset disposition.
Stay in the Know on Regulations
Stay aware of regulations so you can make any necessary changes before they take effect. Make sure to add compliance factors into the contracts and processes.
Act Quickly
Dispose of or resell the assets quickly to avoid a stockpile that can be overwhelming, as well as a missed revenue opportunity. Staying on top of the ITAD process can make record-keeping, management, and security much easier.
Integrate ITAD into Financial Planning
Allocating an appropriate budget to ITAD is important for maintaining sound practices and ensuring sufficient resources to carry out the process correctly and securely.
Add ITAD to Your Company’s Financial Plan
As a CFO or other financial decision-maker, it’s crucial to include ITAD in your financial plan. Many forget about this and don’t allocate enough revenue to this category, leaving no room for proper disposal and security. Maintaining proper processes is essential for gaining resale revenue, preventing data breaches, and staying compliant. Take our tips and start planning for IT asset disposition today so your company stays compliant, recoups missed revenue, and is better prepared for an efficient process.