What is IT Financial Management?
In the last few years, information technology has greatly expanded and now plays a key role in different types of companies. I could also say that most of today’s organizations rely heavily on information technology to properly function. The concept is pretty simple. The world of IT is in constant evolution, so as the need for IT increases, the bigger the budget for IT becomes. And as the budget for IT gets bigger, it becomes more likely that a company could lose sight of their IT investments. Yes indeed. We’re talking about data centers, cloud services, IT services and much more. We may not realize it, but the costs are piling up quickly. You may be asking yourself how it is possible to manage all that money. The answer is simple: ITFM. And it is also the 94th reason to go beyond Telecom Expense Management!
How can ITFM help you?
According to TechTarget, an American data-driven marketing company, “IT financial management (ITFM) is the oversight of expenditures required to deliver IT products and services.” As its name indicates, it allows you to manage the IT spend of an organization. Indeed, it gives companies a better visibility on their service costs, therefore giving them a chance to know how their money is spent and who spent it. Whether we are dealing with direct costs, like service usage and labor, or we are dealing with indirect costs, like support infrastructure and maintenance, ITFM provides companies with an opportunity to have a much clearer view of their spending habits. As a result, they have a better idea of the way their money is spent, thus they can make better decisions. On top of all that, it gives managers a chance to be more aware of their employees’ expenses.
Basically, IT Financial Management is important to fully understand and improve the performance of invested funds, which will ultimately increase the profitability of the business.
What are the benefits of using an ITFM solution?
- Make budgeting easier;
- Facilitate forecasting;
- Enable cost optimization; and
- Have access to a variance analysis.
The Upland ComSci solution offers you a full Bill of IT, meaning an exhaustive list of IT assets and services owned by a company. In addition to this, this solution gives you access to benchmarking, showback, chargeback as well as analytics.
In a nutshell, with a solution like this, you could see the true cost of IT and beyond. If you want to learn more about other ways to save money and save time, you are one lucky person, because there are so many solutions associated with ITFM. Telecom Expense Management is one of them. IT Financial Management and Telecom Expense Management are two great solutions by themselves, but together, they can create wonders. TEM is more specific and supplements ITFM by performing cost optimization, performance metrics, allocations of costs and chargeback to recover funds. An ITFM tool can accomplish some very specific tasks, like IT budgeting, forecasting, variance analysis, IT project analysis, benchmarking, as previously mentioned. So, where do they connect exactly? Well to put it simply, ITFM vendors normally take their data from the ERP system’s General Ledger and TEM vendors are one the sources for that data. An ITFM solution will take the cost data from that TEM vendor and add it to the solution. This way, enterprises can have more details and controls to make changes and have direct use of their data. They ultimately give you a better value and an opportunity to make better decisions when it comes to your budget, your investments and your expenses. Read our blog on the benefits of combining ITFM and TEM and discover how you could create a culture of cost transparency!