As technology becomes increasingly more complex, many organizations are focused on identifying and controlling IT costs. IT finance management (ITFM) tools provide spend transparency to the broader business. While some organizations embrace ITFM, there are many IT leaders who don’t fully understand what an ITFM tool is, or how it can help them.
ITFM technology enables IT and finance leaders to manage their business with increased accuracy and visibility across departments and projects. A robust tool will provide insight into exactly what IT is spending across the organization. Think of ITFM tools as accounting for IT so your organization can understand spend at a granular level.
What do ITFM tools do?
Many organizations do not have a granular view of their IT spend by department or strategic initiative. IT financial management tools drive spend insights that are necessary to develop a transparent cost allocation/chargeback strategy. The key here is that these should be based on the actual costs of running your business.
Rather than simply charging a department based on incorrect assumptions, ITFM tools allow organizations to show actual spend numbers for each department and initiative. This allows the IT department to show its true value.
A robust tool pulls data directly from invoices for software, hardware, and every IT soft cost in between. Those costs can be viewed by location and cost centers for management purposes. ITFM tools can create key reports for all stakeholders to access so that they can understand where spend is going. This level of visibility enables better allocation accuracy and allows for strategic decisions to be made.
Understand the challenges
Getting IT, Finance, and other parts of the organization on the same schedule for ongoing IT finance management processes can be a struggle without a clear plan. When key stakeholders do not have a holistic view of IT value, it can delay or even halt ITFM processes.
We get it, staying on top of ITFM timelines, dates and processes is hard.
One of the most common pains we see in trying to manage ITFM processes is manual work in spreadsheets. For many companies, it takes a tremendous amount of work just to pay bills on time, let alone develop a complex IT finance strategy. That’s a lot of time and focus taken away from more important, foundational ITFM activities like building forecasts and broader organizational goals.
At brightfin we see many IT organizations challenged with calculating the cost of IT tasks and improving data accuracy. Many of these are unsure where to begin the process of cleaning their data before getting started with an ITFM program. We help centralize data through automated processes to provide a complete picture of the total cost and value of IT services.
Key questions to ask
There are some key questions you should be considering before you start looking for an ITFM tool:
- Do you have the transparency to make strategic IT decisions?
- What IT finance issues need to be resolved and why?
- Who will be the executive sponsor?
- Who is driving the interest in better IT finance visibility?
- What is the timeline for the project?
The answers to these questions will help you and your organization understand that scope of work and provide a starting point for determining the necessary tools.
Determine a goal
Before any ITFM tool purchase, IT leaders must determine the goal of leveraging such a tool. For many organizations, optimization is critical. Does your organization need to focus on identifying and managing costs? The organizations with this goal are looking for optimized and cost-effective IT financial management.
Optimized ITFM enables:
- Workflow automation technologies to deliver speed, efficiency and, cost optimization.
- Enterprise-wide digital investment review and governance to measure, fund, and manage digital business performance.
- More accurate budgeting and forecasting.
- Advanced data analytics to understand, interpret and use data to make sound operational decisions.