After working in the IT industry for over 20 years, I’m still surprised when I come across very loose interpretations that claim to define IT asset management. To be fair, the term asset management has different meanings depending upon the audience. If I was on Wall Street, or worked in financial services, the term asset applies to stocks, bonds, real estate and other types of financial assets. When speaking to an audience that is focused on tracking all of the assets a corporation owns, they would think of it in terms of enterprise asset management. This covers the real estate, buildings, fleet, machinery, power plants, planes, basically all of the enterprise assets that are capitalized and on the balance sheet. When it comes to IT assets, we are specifically referring to those assets that enable the IT side of the business to run. In some cases, these technology assets might not be controlled by IT because it is the rare company today that doesn’t have software and hardware that is supporting the development of a product or helping their business to run more efficiently.

Once we narrow the definition down to IT-only assets, there is still confusion. Let me begin by differentiating ITAM from discovery and inventory tools. Discovery and inventory tools are used to scan the network looking for IP addresses. After one is found, it will run a scan of all installed software. If the tool uses an agent, the agent will be pre-installed on the device and a scan will be scheduled to run a specified schedule.

What is an ITAM database?

An ITAM database has three components to it – physical, financial and contractual. The physical info is collected using the discovery and inventory sources to accept data those shows what is deployed. It will also provide visibility into all IT assets that might be in a stockroom, but not yet deployed or maybe scheduled for retirement. This stockroom info is typically collected using manual processes, bar code readers or RFID systems if they are installed.

The second component of ITAM is the financial data. This data is often collected from a purchasing system or from a purchase order. It indicates purchase order #, vendor name, quantity, make and model, purchase price, depreciation, cost center, and other financial attributes that an organization might need visibility into. Tracking financial attributes about an asset is useful to understand total cost of ownership, return on investment and assign costs to projects and IT business services.  It also helps an organization understand technical debt associated legacy applications, for example on the mainframe, and enable better decision making about end of life for an asset.

The third component of ITAM is the contract data. This data is often collected from the reseller directly from the vendor/supplier or from a contract management system if one is in place. It will include the information from the final negotiated version of the contract, not the iterations during negotiation. Details such as version number, license entitlement, license type, vendor SKU, training days, service levels, maintenance and other important contract facts. If it is a cloud or Software as a Service purchase, the details will include quantity, license type, device count, purchase price, whether you are bringing your own software to the cloud instance, contract timeframe to name a few.

Software and hardware asset management

Data from these sources is consolidated into a database which becomes the information hub. Regardless of whether the data is related to software, hardware or services associated with that equipment it is stored centrally. Software asset management and hardware asset management is a subset of ITAM. Without visibility into the hardware, it becomes impossible to ensure software is installed in compliance with the license agreement. Similarly, without insight into contract SLAs and integration into IT service management tools, that provides incident and problem management info, it is difficult to do effective vendor and performance management.

As with most things involving technology, definitions, interpretations and the ways we think about something will evolve over time. When artificial intelligence takes over ITAM, I’m sure the definition will evolve once again.