One of the barriers to effective IT financial management is in the language we speak in IT: technical jargon and complex tables of IT spend not directly linked to the business value or actual line of business consumption - hardly a language that would resonate with your average executive board. The conversation needs to happen in terms of customer-facing services, not processes or utilities.
These services need to be transparent and understandable, in "business-speak," to the lines of business, and accompanied by an accurate service-based unit price (rate).
Demand Management is also key. Knowing the full cost of providing any given service enables IT to have conversations with LOB owners that allow you to predict and record trends in demand, and create rolling demand-driven forecasts that go 5 to 6 quarters out. It also allows your IT Financial Managers to compare your cost of delivery against benchmarks in the industry and make informed spending decisions.
If a CIO is armed with the ability to discuss services in business-speak, including accurate service-based costing, and with a more accurate picture of future demand, a healthy economic relationship between IT and its customer is born, and reduced IT spend and increased customer satisfaction has historically followed .
5 Steps to Effective IT Budgeting
Lontra, the industry leader in Service-Centric IT Financial Management, has developed a series of five workshops for IT Financial Management professionals. These workshops are designed to assist organizations with the adoption of the best practices needed to refine their budgeting process. "5 Steps to Effective IT Budgeting" includes:
1) Service Unit Cost Modeling
2) Cost Recovery and Chargeback
3) Strategic Demand Management
4) Establishing What to Measure
5) Consumption Based Budgeting and Planning
Each workshop includes:
explanation of the best practices
real-world examples of the implementation of these concepts
Join IT Financial Management expert Ronald Bradley as he talks about service-based costing, consumption-based chargeback, and demand-driven budgeting in Lontra's latest webinar - “IT Budgeting in the New Economy: A One-Hour Primer in Service Based Costing.”
Ron's presentation features models, methodologies, and templates that he has used to help dozens of Fortune 500 IT organizations and government agencies to save tens of millions of dollars.
Lontra's award-winning consultants have a wealth of experience implementing best practice service catalogs and service portfolios, as well as developing service-based costing and budgeting. We have a track record of helping Global 1000 organizations achieve their IT Service Management (ITSM) and IT Financial Management (ITFM) goals, and can help you.
Email us to learn more about Lontra's ITFM and ITSM consulting offerings.