Monitoring involves watching systems and receiving alerts when issues arise. It is one part of managing an IT environment alongside other processes like incident and problem management. While monitoring alone does not transform a datacenter, it is indispensable for maintaining systems. Effective monitoring follows good practices like defining clear responsibilities and documentation, as well as avoiding issues like flooding teams with false alerts or contacting the wrong people. The goal is to automate responses and ensure the right people are alerted to issues to take action.