ITAM, FinOps & GreenOps Glossary of Terms

A   

AI-Powered ITAM 

The use of artificial intelligence to enhance IT asset discovery, tracking, and management. 

Amortisation 

The gradual allocation of the cost of an intangible asset, such as software licenses or intellectual property, over its useful life. In IT financial management, amortization is used to spread large expenses across multiple accounting periods, providing a clearer view of financial performance.

Application Rationalisation 

The process of identifying and reducing redundant or unnecessary applications to optimize costs and improve efficiency. 

Audit   

A thorough examination and evaluation of software usage within an organisation to confirm compliance with software publisher licensing agreements and also regulatory requirements. 

Asset Inventory   

The process of collecting and documenting detailed information about software installations and hardware configurations on all discovered devices to accurately assess license usage.   

 

B   

Baseline   

A comprehensive snapshot of an organisation’s current software and hardware inventory, used as a benchmark to monitor changes and identify discrepancies over time.   

Benchmarking 

Comparing performance metrics or practices against industry standards or best practices to identify areas for improvement. 

BOM (Bill of Materials)  

A detailed list of all software applications included in the scope of a renewal, specifying quantities, types, and other relevant details.   

BYOD (Bring Your Own Device) 

The act of allowing, and policies and practices for managing, employee-owned devices used in the workplace. 

BYOL (Bring Your Own License) 

The act of using, and policies and practices for managing, traditionally on-premises licenses in cloud environments such as Microsoft Azure and Amazon AWS. 

C   

CapEx (Capital Expenditure) 

CapEx refers to funds an organization spends to acquire, upgrade, or maintain physical or tangible assets, such as property, buildings, technology infrastructure, or equipment. These expenditures are considered long-term investments because the assets typically have a useful life beyond the current accounting period. 

Carbon Dioxide Equivalent (CO2e) 

A standardized measure used to express the impact of different greenhouse gases in terms of the amount of CO2 that would create the same warming effect over a specific period. CO2e enables the comparison of the climate impact of various gases like methane or nitrous oxide. 

Carbon Efficiency 

The measure of how effectively an organization or system produces goods, services, or energy relative to its carbon emissions. High carbon efficiency means more output is achieved with lower greenhouse gas emissions. 

Carbon Footprint 

The total amount of greenhouse gases, expressed as CO2e, emitted directly or indirectly by an individual, organization, product, or process. It includes emissions from energy use, transportation, manufacturing, and other activities. 

Carbon Intensity 

A metric that measures the amount of carbon dioxide emitted per unit of output, such as per megawatt-hour of electricity generated or per product manufactured. Lower carbon intensity indicates more sustainable operations. 

Chargeback 

A financial practice where IT costs are directly allocated to the business units, departments, or teams that consume the resources. Chargeback systems promote accountability by tying usage to cost and can incentivize more efficient use of IT resources. 

Cloud Centre of Excellence (CCoE) 

A cross-functional team within an organization responsible for defining and implementing cloud best practices, policies, and governance to maximize cloud adoption and usage efficiency. 

Compliance   

The state of adhering to software licensing terms and regulatory standards to avoid penalties and ensure proper usage.   

Container 

A lightweight, standalone executable package that includes everything needed to run a piece of software, including the code, runtime, libraries, and system dependencies. Containers are more portable and efficient than virtual machines and are commonly used for deploying applications in cloud-native and microservices architectures. 

Convergence 

The idea that related disciplines such as ITAM, FinOps, and GreenOps are better together when aiming to achieve certain goals. 

Cost Allocation 

Assigning software and hardware costs to specific departments, projects, or business units. 

Cost of Goods Sold (COGS) 

The direct costs associated with producing goods or services that a business sells. In IT contexts, COGS might include the cost of software development, hosting fees for SaaS products, or cloud infrastructure expenses directly tied to delivering services to customers. 

Cost Optimisation 

The continuous process of identifying and implementing strategies to minimize unnecessary IT and software expenses while maximizing value.  

Consumption-based Billing 

A pricing model where costs are determined by actual consumption, common in cloud services. 

Contractual Use Rights (Use Rights)   

Legally binding conditions defined by a software publisher that specify how and under what circumstances a license can be used by the license holder.   

CMDB (Configuration Management Database)   

A centralised repository that stores detailed information about an organisation’s IT assets, their configurations, and the relationships between them.   

CSP (Cloud Service Provider)   

A company that delivers cloud-based solutions and services, such as infrastructure, applications, and platforms, to businesses.  Examples include Microsoft (Azure), Amazon (AWS), and Google (GCP). 

 

D   

Data Residency 

Compliance with legal and regulatory requirements for where data is stored and processed. 

Deployment   

The process of installing and configuring software on devices to make it operational for users. 

Depreciation 

The accounting process of allocating the cost of a tangible asset (e.g., servers, data centre equipment) over its useful life. Depreciation reflects the declining value of the asset due to wear and tear, usage, or obsolescence. 

Device Discovery   

The method of identifying all IP-enabled devices on a network, including physical and virtual machines, to create an inventory of hardware and software assets. 

Dynamic Optimisation 

Real-time adjustments to licensing or cloud resource usage based on actual consumption patterns. 

 

 

E   

EA (Enterprise Agreement)  

A Microsoft Volume Licensing program designed for large organisations to simplify the procurement and management of software licenses and online services. 

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) 

EBITDA is a financial metric that measures a company’s profitability before deducting interest expenses, taxes, and non-cash accounting items like depreciation and amortization. It is commonly used to assess the operating performance of a business by excluding costs that are not directly related to its core operations. 

Edge Computing 

Managing assets and licensing at the network's edge, such as IoT devices and local data processing units. 

Effective License Position (ELP)   

An analysis that determines the net difference between an organisation’s license entitlements and actual license consumption, accounting for factors like downgrade rights and bundled products.   

EOL (End of Life)   

The stage when a software product is no longer supported by the vendor, resulting in the end of updates, patches, and technical assistance.   

EULA (End-User License Agreement)   

A legal document that outlines the terms and conditions under which a software product can be used by the end-user.   

 

F   

FinOps   

A discipline focused on optimising cloud spending by fostering collaboration between finance, technology, and business teams to make informed, data-driven decisions.   

Full-Time Equivalent (FTE) 

Unit of measurement used to calculate the number of full-time hours worked by all employees within a business. Sometimes used to calculate license requirements. 

 

G   

Governance   

The framework of policies, processes, and controls that guide the management and usage of IT assets to ensure compliance and efficiency.   

Governance, Risk, and Compliance (GRC) 

Frameworks and practices for aligning IT asset management with broader business governance and compliance objectives. 

Greenhouse Gas (GHG) 

Gases in the atmosphere that trap heat and contribute to global warming. Common GHGs include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and fluorinated gases. 

Greenhouse Gas (GHG) Protocol 

A globally recognized framework for measuring and managing greenhouse gas emissions. The protocol categorizes emissions into three scopes (Scope 1, 2, and 3) and provides guidance on quantifying and reporting them. 

GreenOps 

A discipline focused on optimizing IT operations to reduce environmental impact. This includes strategies for minimizing energy consumption, managing e-waste, and adopting sustainable practices such as migrating to energy-efficient cloud platforms and optimizing datacentre operations. 

Green IT 

Strategies and technologies for reducing the environmental impact of IT operations, including energy-efficient hardware and sustainable software practices. 

Greenwashing 

The practice of making misleading or unsubstantiated claims about the environmental benefits of a product, service, or organization to appear more environmentally responsible than it actually is. 

 

H   

Hardware Inventory   

The process of cataloguing and managing physical IT assets, including computers, servers, and mobile devices.   

Hybrid IT Management 

Overseeing IT assets and services across a combination of on-premises, cloud, and hybrid environments. 

 

I   

Inventory   

The systematic tracking and management of software and hardware assets, including their licenses, installations, and usage details.   

Incident Management 

Tracking and resolving issues related to IT assets, such as security vulnerabilities or performance degradation. 

Inventory Normalisation  

The process of organising and standardising hardware and software inventory data into defined groups, often enriched with additional relevant characteristics for clarity.   

Inventory Reconciliation 

The process of comparing actual asset inventory with records to identify discrepancies. 

ITAM (Information Technology Asset Management)   

A structured approach to managing an organisation’s IT assets throughout their lifecycle to maximise value, reduce costs, and ensure compliance.   

ITFM (IT Financial Management) 

A framework and set of practices for managing the financial aspects of IT operations. ITFM encompasses budgeting, forecasting, cost allocation, and performance tracking, aiming to provide transparency into IT costs and align spending with business goals. 

ITSM (Information Technology Service Management)   

A set of practices focused on delivering and managing IT services to meet the needs of the organisation and its users effectively.   

ISO 19770-1   

An international standard for IT asset management, providing a framework for achieving best practices and measuring ITAM maturity levels.   

 

K   

Key Performance Indicators (KPIs)   

Quantifiable metrics used to assess the success of software asset management initiatives, such as cost savings or compliance rates.   

 

L   

License   

A legal authorisation to use a software product under specific terms and conditions defined by the publisher.   

License Consumption   

The use of software licenses within an organisation.   

License Entitlement   

The total number of licenses an organisation has legally obtained and is entitled to use under its agreements.   

 

M   

Mergers, Acquisitions, and Divestments (MAD)   

Corporate events where companies are merged, acquired, or split into separate entities, often impacting IT asset management strategies.   

Maintenance   

The ongoing process of providing updates, patches, and support to keep software functioning effectively.   

Mobile Device Management (MDM)   

The practice of securing and managing mobile devices such as smartphones, tablets, and laptops within an organisation.   

Multi-Cloud Management 

The process of managing IT assets and costs across multiple cloud service providers.

 

N   

Negotiation   

The process of discussing terms with software vendors to establish licensing agreements that meet organisational needs while optimising costs and compliance. 

Net Zero 

A state in which an organization’s total greenhouse gas emissions are balanced by the removal or offsetting of an equivalent amount of emissions from the atmosphere, typically through carbon capture, reforestation, or purchasing carbon credits. 

 

O   

On-Premises (On-Prem) 

Refers to software, hardware, or IT infrastructure that is hosted and managed within an organization’s physical premises rather than being hosted in the cloud. On-premises systems typically require the organization to handle maintenance, updates, and security. 

Operating Expense (OpEx) 

Costs incurred during regular business operations, including software subscriptions and cloud usage. 

Optimisation   

The practice of improving the utilisation and value of software assets by aligning license usage with actual needs, minimising waste, and reducing costs.   

Operating System Environment (OSE)   

A single occurrence of an installed operating system, which may exist on a physical device, virtual machine, or virtual desktop environment.  

 

P   

Portfolio Management 

The practice of managing a collection of IT assets and services to achieve business goals. 

Power Usage Effectiveness (PUE) 

A metric used to measure the energy efficiency of a datacentre. PUE is calculated as the ratio of total energy consumed by the datacentre to the energy consumed by its IT equipment. Lower PUE values indicate greater efficiency. 

Procurement   

The process of acquiring software licenses, including evaluating options, negotiating terms, and finalising agreements with vendors.   

Procurement Lifecycle 

The end-to-end process of acquiring, managing, and retiring IT assets. 

Proof of Entitlement (PoE)  

Official documentation proving an organisation’s right to use specific software licenses, typically including contracts, invoices, or purchase orders.   

Publisher Runbook (Runbook)  

A detailed, continuously updated document outlining the processes, rules, and assumptions used to collect data, analyse licensing, and calculate compliance for a specific software publisher.   

 

R   

Rate Optimisation 

The process of reducing cloud costs by leveraging favourable pricing structures and options offered by cloud providers such as Reserved Instances and Savings Plans. 

Re-harvesting Licenses 

Reclaiming and reusing unused software licenses to optimize costs. 

Renewal Planning 

Preparing for contract renewals by analysing usage, costs, and future requirements. 

Reporting   

The creation of structured summaries and analyses of software usage, compliance, and financial data to provide actionable insights.   

Request for Information (RFI)   

A preliminary document used to gather details about potential vendors or solutions to inform decision-making before issuing an RFP.   

Request for Proposal (RFP)  

A formal document used to solicit bids from vendors or service providers, detailing project requirements, evaluation criteria, and expected outcomes.   

Reserved Instances (RIs) 

Reserved Instances are a pricing model offered by cloud providers, such as AWS, Azure, and Google, that allows organizations to commit to using a specific amount of compute capacity (e.g., virtual machines) for a fixed term, typically one or three years, in exchange for significantly lower hourly rates compared to on-demand pricing. 

Return on Investment (ROI) 

A financial metric used to evaluate the profitability or efficiency of an investment. It measures the return generated relative to the cost of the investment. 

Risk and Opportunity Assessment Report (ROAR)   

A comprehensive evaluation that highlights compliance risks, cost-saving opportunities, and actionable recommendations based on an organisation’s licensing data.  

 

S   

Savings Plans 

Savings Plans are a flexible pricing model offered by cloud providers, designed to reduce costs by committing to a specific amount of usage (measured in dollars per hour) rather than reserving specific instances. 

Scope 1 Emissions 

Direct greenhouse gas emissions from sources owned or controlled by an organization, such as emissions from company vehicles or on-site fuel combustion. 

Scope 2 Emissions 

Indirect greenhouse gas emissions from the generation of purchased electricity, heat, or cooling that the organization consumes. 

Scope 3 Emissions 

Indirect greenhouse gas emissions that occur in an organization’s value chain, including upstream activities (e.g., production of purchased goods) and downstream activities (e.g., product use and disposal). Scope 3 often represents the largest portion of a company’s carbon footprint. 

Shadow IT 

Unauthorized use of IT assets or services within an organization, often bypassing official procurement processes. 

Software Asset Management (SAM)   

The discipline of managing software assets to maximise their value, ensure legal compliance, and mitigate risks.   

Software as a Service (SaaS)   

A software delivery model where applications are hosted by a vendor and accessed by users over the internet, eliminating the need for local installation.   

SaaS Governance   

The implementation of policies and processes to manage and secure SaaS applications effectively, ensuring compliance and optimised usage.   

Service Level Agreement (SLA)   

A contractual agreement defining the level of service to be provided by a vendor, including performance metrics, availability, and response times.   

Shift Left 

The practice of addressing tasks or responsibilities earlier in a process lifecycle, often to improve efficiency, reduce costs, and enhance outcomes. Originating in software development, it encourages moving activities like ITAM, FinOps, and Security earlier in the development cycle. 

Showback 

Similar to chargeback, but without directly billing departments or teams. Showback involves generating reports that display IT resource usage and associated costs, helping stakeholders understand their consumption patterns and fostering accountability without financial transfers. 

Software Publisher (Publisher)   

The company or entity that develops and owns the intellectual property rights for a software product.   

Software Vendor (Vendor)  

An organisation that sells or distributes software licenses, often as a reseller for a publisher.   

 

T   

Tagging Standards 

Guidelines for labelling cloud and IT assets to improve tracking, reporting, and cost allocation. 

Training   

The process of educating users on how to use software effectively, enhancing productivity and reducing support needs.   

Total Cost of Ownership (TCO)   

The total expense of owning and operating a software or hardware asset over its entire lifecycle, factoring in acquisition, maintenance, support, and disposal costs.  

True-Up 

An annual or periodic process to reconcile actual software usage with licensing entitlements, often leading to additional purchases or adjustments.

 

U   

Unit Economics 

The analysis of cost and revenue on a per-unit basis, such as per user, per device, or per application. In IT, unit economics can help organizations understand the true cost of delivering services and identify opportunities to improve efficiency or reduce costs. 

Usage   

The manner and extent to which software products are utilised within an organisation, influencing license requirements and optimisation strategies.   

Usage-Based Billing 

A pricing model where costs are determined by actual consumption, common in cloud services. 

 

V   

Vendor Management   

The practice of maintaining and optimising relationships with software vendors to ensure favourable terms, compliance, and support.  

Virtual Machine (VM) 

A software-based emulation of a physical computer that runs an operating system and applications just like a physical machine. VMs share the physical resources of a host machine (CPU, memory, storage) while being isolated from one another, enabling multiple virtual environments to run on a single hardware system. 

Virtual Machine Sprawl 

The uncontrolled proliferation of virtual machines, leading to inefficiencies and increased costs. 

 

W   

Waste Reduction 

Strategies for eliminating unnecessary IT assets and resources to optimize costs and reduce environmental impact. 

Workflow   

A sequence of processes for managing software assets throughout their lifecycle, from procurement to retirement, to ensure efficiency and compliance.   

 

Y   

Year-over-Year Cost Analysis 

Comparing IT and software costs over multiple years to identify trends and areas for improvement 

 

Z   

Zero-Day   

A security vulnerability in software that is exploited by attackers before the vendor has released a fix, posing significant risk to users.