At Advocate, we have an amazing team of analysts whose intellect, energy and creativity lead us every day to create value for our clients. Through the course of their service to our client community, they encounter experiences and achieve insights to the underlying challenges and solutions that most, if not all, enterprises are facing in the ever changing world of technology.
These changes are nowhere more evident than in the evolving world of IT Financial Management. CIOs, CFOs and even CEOs are looking for new metrics to help guide their company’s technology investment while ensuring they continue to exceed their customer’s expectations.
Recently, one of our rising stars, Katie Massey, put pen to paper to share her insights in the world of IT Financial Management. We are proud to share her unique insights with you.
VP Strategy, Chad Doiron
Information Technology Financial Management (ITFM) is the process of overseeing and balancing investment priorities related capital and operating expense within a corporation’s IT department. The goal is to strike a balance between investment in future business capabilities, while ensuring adequate funding remains in place for existing solutions. At the same time, ITFM can help to establish new baselines for the appropriate levels of investment that take into account changing needs within the company. It can prevent a company from overspending and propagating shadow IT, while simultaneously ensuring that the IT infrastructure is provided at the most effective price. It also establishes a cadence for a transparent work flow between business units, IT operations and the organization’s executive management team, not solely the CIO.
ITFM planning should be done periodically, usually once a year, and monitored throughout the year, preferably monthly. This means that actual monthly expenses are compared with the budgetary targets for various categories of spending creating transparency in the system. That in turn encourages organizations to avoid investing in activities that do not advance the overall strategy of IT – especially when lower cost alternatives could be available. It also allows for corrective actions to be taken early to ensure that management retains in control of the ITFM process and that spending remains on track.
Although standard financial principles such as budgeting are not a new concept for any organization, they are not the limit when it comes to ITFM. Rather, ITFM takes these principles into account while also keeping up with quality and risk factors. Spend reduction is no longer the primary focus of CIOs. With the broader business becoming so much more reliant on technology, it is important for organizations to look not only at optimizing costs but also focusing on the effectiveness of its IT spend. ITFM can allow a company to connect on all levels and understand how IT investments are driving real value. It will allow management to know more than just how much they are paying for a particular IT service, but also why they are paying that much and how much they should be spending on it.
Need Help from a Strategic ITFM Technology Partner?
By working with a proven ITFM technology partner like Advocate, we can help you optimize your IT costs, increase the effectiveness of your IT spend and improve insights into your ITFM.
Contact Advocate today at 678-987-5900 or firstname.lastname@example.org for a free high level review of your organization’s ITFM!