February 2, 2023

What are ghost assets and zombie assets?

Ghost assets and zombie assets are terms used in the IT industry to describe unused or unusable assets.

What are ghost assets and zombie assets?

Definition and classification

Ghost assets and zombie assets are terms used in the IT industry to describe unused or unusable hardware assets or other assets.

Ghost assets refer to equipment that exists in the company but is no longer used. They are "invisible" because they are no longer used in day-to-day operations and thus, strictly speaking, do not contribute to a company's productivity, even though they are listed under fixed assets. Examples may include:

- Broken / old / stolen hardware

- Unused assets that are not known to exist

- License subscriptions that are renewed annually but not used

The world's leading research and advisory firm, Gartner Inc., estimates that up to 10% to 30% of the assets listed in a company's fixed assets are not being used productively and are therefore "ghost" assets.

Zombie assets are the opposite case: these are assets that are used in day-to-day operations but are not inventoried or listed in a company's fixed assets.

How are ghost and zombie assets created in the enterprise?

Ghost and zombie assets arise in organizations for a variety of reasons, such as:

1. overstocking: companies often buy more IT equipment than they actually need, leading to overstocking and unused equipment.

2. outdated equipment: with the rapid development of technology, IT equipment is quickly outdated and replaced, but not always properly disposed of or resold

3. lack of monitoring: lack of inventory system and monitoring can cause devices to become untracked and eventually ghost or zombie assets.

4. lack of policies: a lack of policies to manage and monitor IT assets can lead to devices not being tracked and ultimately not being used.

Effects on companies

- Productivity loss: Ghost assets are a real problem in operations for a variety of reasons - for example, when an employee wants to access an asset that actually exists and "works", only to discover at the last minute that it does not exist or is unusable. This can lead to serious delays and therefore negative productivity.

- Insurance aspects: Most property insurance policies only cover assets that officially exist as fixed assets. If a zombie asset fails, is destroyed or stolen, property insurance will not cover it.

- Higher costs: Companies may still have to pay tax on ghost assets even though they have no value in themselves - or new equipment may be purchased even though "zombies" exist whose use would make a new purchase obsolete. On the other hand, zombie assets can complicate depreciation, as it is unclear whether they have already been depreciated or should be depreciated. In addition, ghost assets may also incur maintenance costs that negatively impact the overall profitability of a company.

The exorcism: eliminate ghost and zombie assets with a digital inventory manager

A digital asset manager can help you eliminate "ghost" and "zombie" assets by providing a central location where all assets are recorded and managed. The use of QR code labels ensures that the physical device matches the entry in the database - this also makes periodic inventories much easier.

A digital inventory manager also ensures that no assets are overlooked and that each asset is regularly checked to determine whether or not it is still in active use. If an asset is no longer in active use, it can be removed from the system, resulting in a reduction of "ghost" and "zombie" assets. In addition, an asset management system can provide notifications when an asset is out of warranty or when maintenance is required to ensure that assets are always updated and in good working order.

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