IT Financial Management
Most organizations struggle with the way the growing cost of technology (IT) is being managed. Especially now IT is becoming even more fundamental to the existence of those organizations. You want to be able to manage and analyze IT costs, as well as determine their value to your business. That’s where the management of IT’s cost and performance comes in: IT Financial Management.
Why do you need IT Financial Management?
IT is becoming more and more of a cornerstone of a lot of businesses. However, IT is traditionally seen as the business unit which has to do more with less. But, how do you do more with less if you don’t know where to save or invest? IT Financial Management provides the insight you need to run IT like a business.
Additionally, a better understanding of the cost of IT services (both at a consumption-unit and a consolidated level) allows for a better understanding of their business value. What costs may look high but deliver significant value, and what IT services seem valuable but are secretly driving up the costs disproportionately?
Getting started with IT Financial Management
IT Financial Management helps prevent the above from happening. It provides your organization with a complete view of IT costs. The goal: optimization of IT spending and increasing the added value. In short, IT Financial Management revolves around measuring the use of IT services, calculating the cost of those services, and allocating them accordingly.
Most important Technology Business Management (TBM) features
When starting with IT Financial Management, your organization should start with the basics: charging, budgeting, and accounting. Without executing these effectively, it’s much harder to optimize your IT spending. In short:
Identifying all future IT spending (OPEX and CAPEX).
Collecting financial data for your IT services.
Allocating the IT costs to the right consumer(s).
IT Financial Management and Technology Business Management
Technology Business Management (TBM) provides a framework for executing your IT Financial Management and understanding the relationship between the business’s primary processes and the level of IT spending. TBM acts as a shared language between IT and the business, allowing you to start the right conversations.
Our cost & performance management software comes with a Technology Business Management template that offers you a TBM compliant cost model, providing the essential financial and operational tooling to execute IT Financial Management and implement the TBM framework within your organization.