Financial Management for IT Services aids with integrating the IT organization with the business by using a common language shared across all business functions and identifying how IT adds value to the business. The language of Finance is used by all organizations in a business to enable them to:

• predict the financial resource requirements to deliver products or services
• evaluate and make informed decisions on adding or changing products or services
• price the products or services to achieve the desired return on investment
• compare the cost to provide the products or services with external sources
• identify potential problem areas within the organization

These same financial techniques apply to the IT organization in delivering quality services that meet the customer’s business requirements. In addition, Financial Management provides information for customers to determine the added value of IT to the business. Providing customers with pricing for IT products and services enables informed decisions on the best use of their resources to deliver products or services to their end users.

  
Financial Management for IT Services controls the total cost of ownership by operating the IT organization as a business. The process predicts the financial resource requirements or budget for the IT organization by working with Service Level Management, Capacity Management, Availability Management and Continuity Management to determine the costs to deliver services that meet the customers’ business needs. In addition to operational and customer satisfaction metrics, Financial Management metrics serve as additional indicators of the health of the IT organization by comparing the budget with the actual spends. Any significant differences indicate the areas in the IT organization that need management attention to determine the underlying root cause and the potential overall impact to the organization.

 
For proposed changes to the IT infrastructure, Financial Management plays a key role in the Change Management process by ensuring all costs are correctly identified and captured.  In addition, to ensure proper financial prioritization of proposed changes, a return on investment calculation should be performed on those changes mandated by the corporate financial policy.  This allows management to weigh all options and make financially sound decisions on changes to the IT infrastructure.

 
Financial Management for IT Services plays a key role with the other IT Service Management process areas to ensure IT is integrated with the business, maintains the quality of the service, and controls the total cost for providing services to the customer and end user that meets their business needs by using Finance techniques of budgeting, accounting and charging for IT Services.

About the Author:
Robert J.  Messer, ITIL Service Manager, ISO/IEC 20000 Consultant, CISA, PMP serves as Senior Consultant at Plexent, an IT Service Management company and leading provider of ITSM-focused intellectual property, itDNA®.  Messer has specialized in both the operational and business sides of IT for more than 20 years.  He can be reached at jmesser@plexent.com or 972.381.0077.


Previous Article | Next Article