Introducing the ITFM Pathway to Success
An easy-to-follow framework for an effective ITFM program
By Pete Hidalgo, Chief Customer Officer at MagicOrange
The vision of every financial leader is to optimize the financial performance of an organization through good financial planning, fiscal discipline, cost control, sound governance, analytical support, liquidity, return on investment and accurate reporting.
To assist organizations in achieving these goals, MagicOrange has developed the ITFM Pathway to Success, providing an easy-to-follow framework for implementing an effective IT Financial Management (ITFM) program.
The MagicOrange ITFM Pathway to Success is specifically designed to help those leaders responsible for managing the IT and other Shared Services finances of their organization, such as CIOs, CFOs, IT Finance VPs and their respective teams.
What is ITFM?
IT Financial Management (ITFM) is an active program that reveals the true costs of delivering IT products and services. It enables organizations to optimize technology spend, improve investment governance, inform strategy and therefore increase profitability. It is much more than an allocation and chargeback process.
ITFM enables holistic management of IT spend and improved ways of communicating costs. This allows IT to become a business partner that helps organizations achieve strategic goals instead of being seen as a drain on resources.
Building-on the global standard of Financial Management
Whilst developing the framework, we aligned the MagicOrange ITFM Pathway to Success with the Information Technology Infrastructure Library (ITIL) definition of ITFM. This is the process of managing the financial resources, investments, and costs to provide IT services. It includes budgeting, accounting, and charging with the goal of providing these services in a cost-effective manner – ultimately creating value for the business.
ITIL was developed by the British government in the 1980s and has become the global standard of how an IT organization should operate and deliver services. Financial Management is one of the 25 processes in the ITIL standard as shown below in Figure 1.
Figure 1 – ITIL v3 Processes
The ITFM Pathway to Success
The MagicOrange ITFM Pathway to Success has been specially designed to unlock the potential the ITFM discipline has to offer to organizations. MagicOrange experts recognize the complexity of the overall journey to ITFM maturity and importance of identifying a step-by-step pathway to success. They are well equipped to guide its customers through the process and help them realize all the benefits of a successfully implemented ITFM framework.
The MagicOrange team of experts consist of managers and ITFM practitioners with a breadth and depth of experience from global financial services organizations, Big 4 consultancies and industrials, which is unmatched in the market. This practical experience and recognized need of an effective ITFM tool led us to developing MagicOrange solution.
It is crucially important to focus on the complex task of process change and data preparation upfront, before implementing an ITFM automation platform. This approach has proven to yield the best results.
The MagicOrange ITFM Pathway to Success framework aligns with many of the ITIL guiding principles, with a structured approach in 7 well-defined steps for organizations to follow as shown in Figure 2 below:
- Service Definition
- Data Readiness
- Service costing & Benchmarking
- Benefits Realization
Figure 2 – MagicOrange ITFM Pathway to Success
There are no quick fixes because changes to people, processes, and technology are time consuming and Organizational Change Management (OCM) is a key consideration when implementing an ITFM program. OCM has been embedded into The MagicOrange ITFM Pathway to Success to help customers improve their ITFM capabilities.
Guided by the MagicOrange ITFM Pathway to Success framework, customers can now drive cost optimization throughout the organization by approaching savings initiatives systematically and holistically, from the perspective of both IT supply and business demand.
MagicOrange is an established ITFM solution recognized by Gartner and successfully implemented at a number of large, complex international enterprises across various industries. It provides business leaders with a progressive cloud-based ITFM tool and professional guidance that brings full transparency into the value of technology in the organization.
The MagicOrange ITFM Pathway to Success was successfully introduced at the FINANCIAL WORLD OF INFORMATION TECHNOLOGY CONFERENCE in Milwaukee, Wisconsin, US hosted by IT Financial Management Association (ITFMA) - the founder and leading educator of the IT Financial Management Profession.