In the technology world, it seems like we have to learn a new acronym every day. Even in our specialized niche, we have several options to articulate what we do.
The most widely used acronyms are:
ITFM – Information Technology Financial Management
ITBM – Information Technology Business Management
TBM – Technology Business Management
SBM – Service Business Management
All of these acronyms essentially have the same purpose – to explain costs in business terms.
IT Financial Management, or ITFM, is the most commonly used acronym in our industry. The remaining acronyms serve to clarify what ITFM actually means!
Not to be confused with FinTech, which centers on the technology behind actual payment processes, ITFM refers to the financial management of IT departments. Every major organization has particular strategic demands that drive the IT budget. From a costing perspective, these demands can be incredibly difficult to manage and explain – especially for those departments that use IT services but do not see the cost impact of their requirements.
The ITBM acronym makes this distinction by referring to “business” rather than “financial” management of IT. Since business leaders and IT leaders often speak two different languages, establishing a direct correlation between business demands and IT spend is crucial.
When each department can clearly see how their objectives impact the overall budget, they will be held accountable for their spending. Once every department becomes aware of their particular role in the IT budget, executives can optimize their investments to make the entire organization more nimble and efficient. ITBM also illustrates the concept of “running IT like a business,” which is becoming a top priority for organizations in all industries.
We’ve tried to simplify the acronym even further by dropping the “I,” but “TBM” doesn’t quite capture our purpose. Plus, our methodology can be applied to services beyond IT as well, including centralized Human Resources, Finance, Property, or Legal functions that provide services back to other internal departments. We have begun using “SBM,” or Service Business Management, to emphasize the importance of service-based data to explain costs.
The sheer number of acronyms that our thought leaders use interchangeably indicates just how complex our industry really is. Executives in management, finance, shared services, and IT all have unique challenges and objectives, and yet they often struggle to speak a common language.
As our advancements in business and technology continue to evolve, IT financial clarity is more important than ever. For more information on ITFM best practices, please visit our website or contact us.
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