Ask any CFO what the top expense is for the business, and he or she will more than likely say, “IT.” The IT department has become an integral, indispensable part of organizations across all industries, and yet many companies struggle to quantify and evaluate their IT investments.
Let’s walk into a typical CFO’s office and ask about IT. Does the following conversation sound familiar?
Manager: Is IT one of our largest expenses?
CFO: Very much so.
Manager: Is there sufficient clarity regarding the services IT provides, along with their cost and value?
CFO: No. The data is too high level, and IT struggles to make it meaningful. Our IT costs are not visible, and they are not managed well.
Have you ever been on either side of this conversation? You’re not alone. So many C-level executives struggle to articulate their IT investments in business terms, even though it has become essential to do so.
Oddly enough, although perhaps no other department is more deserving of a systematic approach, IT financial management software is underutilized. Think about it – the Human Resources department has its own purpose-built system, Finance has its General Ledger system, and yet the IT department often uses… spreadsheets!
While spreadsheets can be useful for tracking specific projects, they are not sophisticated enough to deliver the information that CFOs demand. With an ITFM system, you will be able to provide IT service costs fully integrated back to the General Ledger. Not only will you be able to explain your IT investments, but you will also quickly identify areas for cost saving.
An ITFM solution will provide a cost and usage breakdown of each IT service, so you can see what – or who – drives your IT spend. You’ll be able to identify chargeback or showback of costs, and you’ll be able to reconcile your Budget and Actuals to support reforecasting.
Plus, when you begin planning your budget for next year, you’ll have invaluable data at your fingertips. Imagine reviewing your year-on-year analysis and making projections for next year with absolute certainty.
In other words, once you implement an IT financial management system, you’ll finally be able to have in-depth conversations with your CFO.
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