What is ITAM and why does it matter?

What is ITAM and why does it matter?

In the first of three articles about IT Asset Management – ITAM – we explain how this practice enables CIOs and other senior business leaders to gain an accurate picture of a company’s IT estate, whether on-premise or in the cloud. ITAM helps businesses centralize asset management and take a dynamic, rationalized disciplined approach that can reduce costs, mitigate risks and improve contractual and sourcing decisions. At a time when cross-departmental use of IT systems without the approval or knowledge of CIOs and their teams is becoming commonplace, this has never been so important.

Why your organization should prioritize ITAM

Bob is a junior designer in the marketing department who’s facing a tight deadline to create a new video. The problem? He doesn’t have the video editing software he needs. His manager has a solution: “Use my company credit card and buy the software subscription. We need that video now!” So Bob buys the software and makes the video. But his company’s IT team has no clue about Bob’s purchase – much less whether the software he’s bought will be used within the licensing terms, or even if it’s safe to use.

Now imagine an entire organization full of Bobs, where anyone with a credit card can buy cloud applications or software as a service (SaaS). It’s an increasingly common reality today, that individuals and different departments can make cloud purchases with little or no input from IT. And it’s especially common for Tier 2 and 3 software services – smaller, niche applications that might be used for only a short time. But they’re not the only reason for cloud waste and ‘zombie IT’ – applications that are underused or not used at all.

Around a third (30%) of IT spend is wasted, according to the Flexera State of ITAM Report 2025. With enterprises today maintaining 125 or more SaaS applications (Gartner® Market Guide for Software Asset Management Tools. Published 25 November 2024. By: Jaswant Kalay, Ciaran Hudson, Yolanda Harris, Charity Hooper), the scale of IT’s challenge in managing software licenses is clear. It means keeping track of all of the software purchased centrally through the CapEx budget – while also trying to manage all of the SaaS subscriptions paid for by different users across the organization using OpEx funds. That’s a recipe for complexity and uncontrolled costs.

This is where IT asset management (ITAM) comes in.

Why is ITAM important?

ITAM is a journey to gain an accurate picture of your entire IT estate, whether on-premises or in the cloud. The goal is to take your organization's practices from an ad hoc approach to rationalized, dynamic asset management that creates value for your business. This will help you to better manage asset lifecycles, costs, and risks, while also improving your contractual and sourcing decisions.

The ITAM journey starts by gaining visibility into your IT environment. This helps you to identify gaps, weaknesses and opportunities for optimization. With the right insights, you can also measure how your business performs against industry benchmarks and best practices. Automation can help. But to achieve ITAM maturity, you’ll also need collaboration and knowledge-building across your organization.

Such a transformation requires a robust ITAM framework. You’ll need a well-thought-out roadmap to optimize your IT estate and costs, reduce risks and avoid financial penalties. You’ll also need ITAM tools that provide access to the right data at the right time. And you’ll need to guide your people with clear policies and processes, while also providing them with the right resources, knowledge, and expertise.

What benefits can ITAM deliver?

With better visibility into your IT assets and how they’re used, you gain immediate benefits in efficiency, control and predictability. This helps to improve your planning and budgeting, as well as your ability to identify cost-reduction opportunities. Well-implemented ITAM policies, processes and technology can help your organization save money in several ways.

First, you can reduce software license costs by identifying – and getting rid of – unused ‘zombie’ software, and duplicate and underused licenses.

Second, ITAM can make software procurement faster and easier. Whenever someone needs to make a purchase, you’ll have all the information you need about asset and licensing data, entitlements and what can be allocated. ITAM is especially valuable when major renewals are due, helping you to achieve more commercially and technically favorable outcomes during negotiations.

Robust IT asset management can also mitigate the risk of non-compliance issues identified during vendor audits. This helps you avoid fines, reputational damage, and the time costs of tying up staff to deal with audits.

Finally, gaining control of your software estate should also improve your security posture. For example, the Log4j vulnerability impacted many organizations longer than necessary simply because they were unaware it was part of their software estate – so, therefore, took no action to secure it.

When your business achieves ITAM maturity, you can use industry-agreed benchmarking standards to see how you perform against others in your sector and to understand how well-aligned your people, processes, and technology are. Those same benchmarks also allow you to measure progress over time. And using international standards like ISO/IEC 19770-1, you can formulate an effective ITAM strategy that provides the right data to power the right strategy, policies, and processes.