You know the drill: it’s time for the monthly IT budget meeting, so you print out spreadsheets and reports which lists your corporate technology investments, how they’re funded and how they’re being used to support business initiatives. You do this because you know that sound business decisions are backed by data and evaluating IT expenditures is essential to retaining control and making the right business decisions. But businesses can be misled when underlying IT financial and performance data is not accurate, consistent or reliable.
Management intelligence in IT, like the rest of the business, requires data – and today, companies have access to enormous amounts of it. What’s needed is increased data integrity – not just more data from IT systems and suppliers.
According to Mark McDonald, Gartner Group vice president and research fellow, the fundamental question CIOs are facing is changing from “how will IT control enterprise costs?” to “how will technology support growth?” For most organizations, more than 70 percent of the IT budget will be spent on maintaining and tending existing infrastructure and operations. Accurately tracking IT infrastructure costs and making the right choices for future digital investment value is challenging enough; doing it in a manner that’s both accurate and consistent across business units, IT products and services and use cases, is a non-trivial problem – the problem at the core of data integrity.
It will get worse before it gets better. Compounding the challenge of data integrity is the adoption of cloud computing and third-party alternative managed IT services. While these often drive down infrastructure costs, organizations need to consider the full constellation of associated operational services, and their associated costs, including customer support, management portals, service level agreements and performance quality. Getting that kind of data consistently further exacerbates the IT management data-integrity problem.
Many organizations rely on Excel-based spreadsheets and generalized corporate planning systems to understand their technology investment financials. However in today’s “big data” environment, manual aggregation processes raise even more data integrity concerns and process inefficiencies. It also prevents organizations from gaining an accurate depiction of how digital technology is consumed and at what cost. Existing corporate planning systems inherently do not offer the level of detail that enables organizations to, for example, drill down to the business unit level for the true cost and consumption of technology products and services. The result is inaccurate allocations and chargebacks, along with an inability to accurately forecast future spending and limited visibility into opportunities for cost optimization.
More than ever before, IT organizations have to articulate and understand their technology utilization and the cost of current infrastructure and operations, applications and projects. To do so requires high integrity of the underlying data. An IT financial and business management (ITFBM) solution serves as the catalyst for increased data integrity and helps organizations to accurately map underlying consumption data and the cost drivers to IT products and services, making the connection between IT investments and business value.
Accurate data combined with the predictive and prescriptive analysis capabilities found in ITFBM solutions can help CIOs get a handle on the truth behind IT spending and make better informed, fact-based decisions. With more quality data, organizations can optimize their IT assets, get more out of their applications portfolio and fund digital projects that drive business innovation and growth.