Summary: Are you a refurbisher looking to venture into the promising world of IT Asset Disposition (ITAD) and planning to start your own ITAD Company? Read this blog to explore crucial factors to consider when venturing into the ITAD industry, and understand the challenges that the industry faces today in order to be well-equipped with the market dynamics.
The significance of responsible IT Asset Disposition (ITAD) and the crucial role it plays in shaping a sustainable future is undeniable. As businesses navigate the ever-evolving technological landscape, ITAD emerges as a cornerstone of environmental stewardship and corporate social responsibility. According to the market research platform MarketsandMarkets the global ITAD market is projected to reach USD 23.5 billion by 2027 with a CAGR of 8.7%. The growth of the ITAD industry can be attributed to a myriad of factors, with key drivers including the widespread adoption of cloud storage, regulatory compliance mandates, environmental concerns, and the alarming surge in data breaches, among others. This robust and consistent growth presents an incredible opportunity for refurbishers, recyclers, and second-hand device resellers eager to establish their own ITAD Company and play a pivotal role in shaping a greener tomorrow.
What is ITAD?
According to TechTarget, “IT asset disposition (ITAD) is an industry term and practice built around reusing, recycling, repurposing, repairing or disposing of unwanted IT equipment in a safe and environmentally responsible way. An IT organization can practice IT asset disposition itself or have a specialized vendor handle it.”
What is an ITAD Company?
An ITAD company is an organization that offers IT Asset Disposition services to end customers thereby responsibly handling their data destruction processes, maintaining chain of custody and compliance. ITAD company provides solutions for handling outdated, retired, or end-of-life IT assets like computers, laptops, smartphones, networking equipment, or other data-bearing devices. Their purpose is to ensure that organizational IT assets are handled securely in an environmentally friendly way.
Key Considerations Before Launching Your ITAD Company:
Starting a new business can be daunting, but careful planning, strategizing, and research can help lay the foundation for success. Launching an ITAD company requires meticulous planning and a deep understanding of the key factors:
- Get Internationally Recognized Certifications: Organizations taking ITAD services expect nothing but comprehensive protection from data breaches, illegal exportations, and environmental liabilities from their ITAD service provider. Thus, it matters that the ITAD service provider they are choosing must hold reputable certifications to globally recognized standards, such as R2, e-Stewards, NAID AAA, RIOS, ADISA, ISO 9001, ISO 14001, ISO 45001, and OHSAS 18001.
- Deploy the Latest Technology and Offer Certificate of Destruction: ITADs must deploy cutting-edge access controls, surveillance, monitoring, and alarm systems within their facility to enhance its security. To demonstrate their expertise in handling and disposing of sensitive data they must have comprehensive data sanitization and destruction protocols in place and invest in professional data erasure software and other device destruction tools that generate Certificate of Destruction (CoD). While selecting an ITAD service provider Enterprises give weightage to a Certificate of Destruction (CoD) that provides assurance that the ITAD has successfully handled the erasure of customer’s sensitive and confidential data beyond recovery. Such certificates come in handy to the customers during audits. Thus, for a successful ITAD venture, you must consider offering a Certificate of Destruction (CoD).
- Adhere to Data Security Protocols: To ensure the highest level of data protection and to maintain data confidentiality, it is necessary to apply industry best practices, use certified data erasure tools, adhere to robust data security standards, and adhere to globally acclaimed data sanitization standards like NIST 800-88, IEEE 2883, DoD 5220.22-M, etc.
- Add Capability of Diagnosing Devices: Diagnosing devices effectively is an essential component for a thriving ITAD business. By diagnosing devices ITADs can gather accurate information on the condition of devices, monitor device health, and determine the IT asset value essential for creating an inventory. With precise device diagnosis, ITADs can identify potential resale opportunities, plan secure data erasure or destruction processes, and reduce environmental impact through proper recycling.
- Create an Inventory of Reusable IT Assets: For an ITAD venturing into the resale and refurbishing business, it is crucial to establish a robust equipment sales process in place. The first step is to assess the marketability and worth of the refurbished assets. Categorizing & sorting equipment according to prominent brands, models, generations, and functionalities is essential to bucket them for resale and get the optimum price. Categorization also helps ITADs remarket second-hand devices on marketplaces to make them available to large buyers & direct customers. The wholesalers are likely to make a good offer if the IT asset is in good working condition with functionalities known.
- Maintain Chain of Custody, Implement an Asset Tracking and Reporting System: ITADs must definitely prioritize having a robust asset tracking system to continuously monitor the asset status documenting their movement from the client’s location to the ITAD facility and throughout the disposal process in real-time. They must have the provision for delivering detailed reports on IT asset disposition services that include vital information like serial numbers, make and model details, and the final disposition outcome. Such steps are proven methods of elevating client satisfaction.
- Employee Training: ITADs must equip their employees with the necessary skills and knowledge using comprehensive training modules. Outsource or develop training programs covering various aspects of the ITAD process like data security, and electronics recycling. Ensure that the staff understands various compliance requirements and adheres to security and safety guidelines to avoid penalization.
- Focus on Customer Service: A remarkable customer service focused on solving customer queries and simplifying their issues is what differentiates an average ITAD company from a successful ITAD company. Before launching an ITAD company ensure you have a customer handling team experienced in responsive communication for complete transparency with customers.
With these considerations in mind, you can start the journey of becoming an ITAD Company and explore the exciting field of IT Asset Disposition.
However, it’s important to remember that with great opportunities come great challenges, so you should also consider the challenges before devising your ITAD business plan.
Challenges in the ITAD Industry:
ITAD industry challenges require careful consideration and proactive solutions. Some of them include:
- Data Security: The ITAD industry is responsible for sanitizing a huge number of data-bearing devices containing humongous amounts of sensitive data. It’s crucial to ensure that this data is properly erased or destroyed. Data Security needs to be maintained in ITAD premises as per guidelines laid by SERI, NAID, or E-steward certification bodies. Unfortunately, despite this, there have been several high-profile data breaches in the ITAD industry. For Example, the $60 Million fine on Morgan Stanley for their 2016 Data Center Decommissioning breach, that happened due to negligence in vendor selection and failure to monitor the vendor.
- Environmental Concerns: IT equipment contains hazardous elements like lead, mercury, lithium, brominated flame retardants, etc. These materials if not properly disposed can leak into the environment and cause land, air, and water pollution, severely impacting the health and wellness of living beings and disrupting the ecological balance. R2v3 certification from SERI lays importance on being environment considerate while handling data and device destruction. ITAD must abide by the core requirements laid down by SERI before applying for R2v3 certification.
- Competition: Rapid expansion of the market has introduced many new players in the ITAD segment. This has resulted in increased competition, the need for following structured processes, compliances, and getting certified by bodies like SERI.
- Regulation: There are several federal, state, and international regulations governing the disposal of IT assets that vary from region to region, making it more stringent to comply with the mandates. For example, an ITAD operating in California, disposing of healthcare data has to comply with both CCPA (California Consumer Protection Act) and also with HIPAA compliance (Health Insurance Portability and Accountability Act).
- Lack of Skilled Workers: The ITAD industry has struggled to find skilled workers as the industry is rather new and training programs for ITAD professionals are scarce.
- Lack of Awareness: There are a lot of businesses that know little about the ITAD segment. As such many businesses and consumers are not aware of the importance of ITAD, and they may not be using ITAD services.
The ITAD industry might be facing challenges but it is a growing industry with a lot of potential. As someone, who is thinking about starting your own ITAD Company, you should keep these points in mind and develop your strategy to counter these challenges. This will make your ITAD business well-positioned to succeed in the future.
What is an ITAD company?
An ITAD company is an organization that offers IT Asset Disposition services to end customers thereby responsibly handling their data destruction processes, maintaining chain of custody and compliance.
What are the crucial factor organizations consider while choosing an ITAD?
While selecting an ITAD service provider Enterprises give weightage to a Certificate of Destruction (CoD) that provides assurance that the ITAD has successfully handled the erasure of customer’s sensitive and confidential data beyond recovery. Such certificates come in handy to the customers during audits.