A technology audit is conducted annually to create an inventory of an organization’s technology-related equipment and programs. The data collected is used to update equipment valuations and create benchmarks for technology plans. The audit is conducted by operations support staff and involves inspecting each piece of equipment and reviewing software license agreements. The audit results are used to determine which equipment is obsolete and adjust the value listed in financial statements. A software technology audit involves reviewing license agreements and comparing contract costs to actual costs.
The primary purpose of a technology audit is to create an accurate list of all technology-related equipment and programs owned or operated by an organization. There are three areas of focus for a technology audit: hardware, software and infrastructure. A technology audit is typically completed once a year as part of the organization’s year-end procedures.
The data collected during a technology audit is used to create a snapshot of the current level of investment in information technology. For financial statements, equipment valuations can be updated based on the audit. The other use of this data is to create benchmarks for long- and short-term technology plans.
The first step required to complete a technology audit is to create an inventory worksheet for hardware, software and infrastructure. Previous year’s data is used as a starting point, and then an inventory audit is conducted. Most inventory lists include the location of each piece of equipment, which is the best place to start. Each piece of equipment is inspected to confirm its location and determine its appropriate value. Software license agreements are reviewed to determine the payments due and the number of licenses available.
The next stage of a technology audit is to adjust the value listed in the financial statements for the technology equipment to reflect the current market value. The results of the technology audit are used to decide which equipment is obsolete, reducing the value to zero. This may be due to the age of the equipment or hardware problems with the equipment.
Technology audits are typically completed by members of the operations support staff. A certain level of computer knowledge is required to correctly identify each piece of equipment and the location of server rooms and network cables. In large organizations, barcodes and scanners are used to track equipment as it moves throughout the year.
A software technology audit takes less time to complete, because it’s simply a matter of reviewing the license agreements for all purchased software. The most important part of this type of audit is to confirm the actual number of licenses in use and the overall contract costs. Many software agreements include a service level agreement detailing updates, length of support for the current version, and related costs. The contract costs must be compared to the actual costs for this relationship to be managed properly. Investing in a technology audit is an integral part of information technology strategic planning.
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