A powerful tool for helping businesses maximise the value of the products and services they use, IT asset management (ITAM) is the process of tracking assets that relate to IT and technology.
Those assets typically fall into four categories: physical, software, hardware, mobile and the cloud, ranging from PCs and printers to licensing and software-as-a-service (SaaS).
The purpose of ITAM is to ensure the successful deployment and ongoing support of IT equipment within an organisation to ensure that it's cost-effective, available, compliant and well-managed.
In this article, we explore what ITAM is, why it's important for your business, and how to go about implementing it successfully.
The importance of ITAM
The visibility of IT assets can be a big problem for businesses – to the point that companies might not even know what they have. This can easily lead to unnecessary purchasing and overspending or, on the flip side, not having enough of a particular item (laptops for new starters, for example).
Imagine suddenly needing to order hundreds of new computers and you start to get a sense of the impact if these assets aren’t managed well.
ITAM also addresses the challenge of software licence audits – balancing the risk that if you don't keep track of specific software licences and during an audit are discovered to be 200 licences short, you may end up with a very large financial penalty.
As a case in point, Businesswire reported in 2022 that in the preceding three years, "more than half of audited companies paid up to $1 million in software vendor fines." One licence management service also noted that at Microsoft, "the penalty can be 125% of the list price of the missing licences. Additionally, if your non-compliance exceeds 5%, you may be required to cover the cost of the audit."
While businesses are often rightly concerned with the tracking of IT assets, you obviously can't do that effectively if you don't know what you have – which is where ITAM comes in.
What are the types of IT asset management?
There are four main types of ITAM, covering the breadth of IT capabilities. These include hardware and software, cloud assets, digital assets and fixed assets:
Hardware and software asset management
Hardware and software asset management are purely about physical items such as computers, laptops, mobiles, servers and workstations as well as any software. The asset management includes tracking each item, such as where it's located and who it's assigned to.
Cloud asset management
Cloud asset management tools focus on supporting the management of any cloud asset services, ensuring cloud provision and governance for the correct number of users within an organisation. That might include providers such as Microsoft or Google.
Digital asset management
Digital asset management is about tracking digital content such as licensing, formats and metadata.
Fixed asset management
Fixed asset management is a subset of hardware asset management, focused on tracking items like desks, printers and server room AC units for volume management and depreciation throughout an item's lifecycle.
The core components of ServiceNow ITAM
Building on those four main types, there are then the core components – the types of information that enable you to effectively manage assets during their lifecycle.
These hinge on the physical details (barcodes and references), financial details (purchase order number, quantity, cost), and any licensing or contractual information.
The IT asset lifecycle: acquisition to disposal
Within ServiceNow, you can track IT assets across their lifecycle so you always know what you have, what you need, and that an item has been disposed of appropriately. From the very beginning, you can track what you have AND what you need.
For example, if you need an asset, you might request it. If it doesn't exist currently within the stockroom or your inventory, you might choose to order it.
That means creating a purchase order within ServiceNow, going to a vendor, getting quotes, ordering an item, having it shipped, receiving it in a stockroom and only then provisioning it to a user. And then, once that user has used it for long enough, it may get transferred to another user or be disposed of or it may be put back into stock or undergo repairs before being disposed of.
Whatever the lifecycle, ITAM ensures you can follow each asset through the whole process.
Inventory management: tracking and documentation
With inventory management, the focus is on managing volumes and audits. Lots of organisations have requirements to audit stock on a semi-regular basis to ensure that everything in the system reflects real life.
ServiceNow provides a mobile app that lets you scan barcodes to confirm that everything in your stockroom is what you say it is on the system, and that you have the right level of stock between your locations.
With ServiceNow, you can issue transfer orders if you don't have the correct level of stock on one site but do have it elsewhere. You can also implement stock rules, so if you drop below a certain level of stock, then that can automatically trigger purchase orders to get more.
Financial management: budgeting and cost optimisation
Financial management focuses on the management and budgetary side of things, as opposed to the day-to-day operations. Departments tend to receive budgets for certain requirements and need to show how much they're spending year on year.
That's the type of reportable information that people can provide back up the chain, showing how many assets have been bought, how many have been sold and how much has been spent and received over the year on each item and why.
This information helps forecast compliance and governance, ensuring legal and policy adherence, as well as projecting future budget requirements.
Compliance and governance: ensuring legal and policy adherence
As we've already mentioned, staying on top of compliance and governance is extremely important for organisations. Compliance refers to the contract compliance that you have for the rights to use certain software and hardware versions, as well as adherence to security standards.
Strategic management: aligning ITAM with business objectives
What strategic management means to you depends on your business objectives.
It can refer to financial management – managing cash flow and making sure everything is as lean as possible. However, strategic management can also be about process goals in terms of the asset's life cycle – making things as easy as possible so as not to create a hindrance to someone's job.
That might mean being able to request assets on your system and then have them approved and go through a series of automatic checks that you would otherwise have to do manually. That can save a lot of time and provide helpful efficiencies within a business.
The IT asset management process
The ITAM process tracks the complete IT asset lifecycle from request and fulfilment to deployment, monitoring, service and retirement.
It begins with what's needed and how it's funded and then, once a purchase has been approved, it's about buying, leasing or licensing the asset, then installing it within the IT ecosystem and monitoring it to make sure it's working effectively – including any repairs or upgrades.
Once an item’s use is complete, it's then about ensuring that records are up to date, licences are cancelled and items are appropriately disposed of and replaced. The ITAM process links all those components together.
Why you need asset management software
The reason for having IT asset management software is to maximise the business benefits of your assets and minimise any risks associated with them and their usage. Those benefits range from cost savings to avoiding hefty fines for insufficient licensing or incorrect usage.
When companies don't have ITAM in place they typically keep manual records – emailing when they request a new item and keeping a written record of it, which can easily become muddled over time.
To keep things streamlined at scale, you need an automated process and a user-friendly portal where you can request an asset and track the request throughout its lifetime, rather than losing it in an email chain.
The benefits of effective ITAM
ITAM is a powerful tool for maximising the benefits that IT offers your business. By knowing exactly what you have and where it is, you will save time and money, as well as improve productivity – making sure you have the right equipment for every job when you need it.
Cost savings through ITAM are most prevalent in the avoidance of fines from mandatory audits, as mentioned.
However, it also reduces the risk of overbuying as a result of purchasing items you already have but aren't aware of.
This greater awareness means you can buy as many of a particular item as you think you're going to need and then purchase small amounts as required thereafter, instead of bulk buying because you are unable to forecast what you might need in the future.
Enhanced decision-making capabilities
This ties in with cost savings through overbuying. With forecasting, you are fully aware of how much budget you will need for a certain department to buy new assets and can make informed decisions.
For example, if you've got five new starters coming into your business and they all need a laptop, by being fully aware of what you have in the stockroom, you may find you only need to buy three new laptops instead of the five you would have bought without that knowledge.
Risk reduction and improved compliance
Compliance relates to hardware asset management as well as licensing.
For example, some laptops will need to operate on certain versions – perhaps a security update can't be implemented on a very old laptop, which will mean you're no longer protected and that item has therefore reached the end of its life.
This is a very important point for a lot of security teams.
Asset optimisation and lifecycle management
Lifecycle management considers the entire lifespan of an asset – a lot of organisations don't track the end stage properly when it comes to disposing or retiring assets and the financial value you can get back at the end of an asset's life by selling it off or returning it to the vendor for credit.
Again, this is also important for security (requiring and holding a Certificate of Data Destruction for sensitive materials) as well as good environmental and financial practices.
How to get started with ITAM
The best way to get started with ITAM is to speak to an expert, like our team at FlyForm, to understand the step-by-step process for its implementation within the specifics of your organisation.
You’ll also want to identify the people within your organisation who are willing to take ownership of the data to keep it running at its most effective over time, as well as ensure company buy-in across the board.
Our team is highly experienced at implementing ITAM for different types of organisations – from SMEs to government entities – and our Customer Satisfaction Score (CSAT) speaks for itself, the result of our playbook of processes for ITAM implementation.
We take the time to get to know your business so ITAM can be implemented seamlessly and we detail and document how you operate to then translate that information into a bespoke solution for you.