IT Financial Management Tools – Criteria for Consideration and Selection
What is an ITFM tool?
Think of an IT Financial Management (ITFM) tool as purpose-built software that aids executives, CIOs, and Finance Directors to specifically understand and manage their IT cost.
Current financial systems have been using the same General Ledger and account’s structure for many decades, while IT only uses unique structures that can run hundreds of millions or billions of dollars. This current system does not support executives, CIOs, and directors to specifically manage their IT cost.
Looking back 20 years, everyone built their IT cost models using Excel because there was no such thing as an ITFM or Technology Business Management (TBM) related tool. Fortunately, there are now separate ITFM solutions that can help simplify cost transparency and aid the finance process.
Why ITFM tools are crucial
MagicOrange’s platform is really built around the idea of solving the IT cost transparency problem that many organisations are facing today – not having full transparency of overall costs.
The MagicOrange platform makes it very easy to identify spend across all divisions and provides this information at first glance via a dashboard. In simple terms, ITFM is all about providing transparency – whether it be IT costs or other business-related costs.
Gartner predicts that by 2024, 70% of CIOs will have a dedicated ITFM system or tool to help clarify and analyse total IT spend. Gartner recommends an early adoption of a purpose-built tool designed to support growing cost model demands, allocation flexibility, and data complexity. MagicOrange is that tool. When running an organisation with a budget over $50 million, managing the financial system is a challenging task. Manually inputting big volumes of data into Excel is very time-consuming and prone to human error. With MagicOrange, the data flows from the corporate financial system to the ITFM platform. CIOs and Finance Directors are able to see the server usage, storage, database costs, cloud adoption percentage, etc., in real-time.
If the right ITFM platform is implemented, there is a low probability of people reverting back to manually inputting data into Excel. However, something to keep in mind is that not all tools are created equally – some focus mainly on the implementation of the software rather than the required precursors such as data readiness to gain value.
A turning point – organisations must adopt
Businesses do not think about cost transparency when they are doing well and making money. However, when the economy starts to get tough and economic downturn occurs, they will begin to investigate where disparities lie within their costs.
With economic instability and inflation at an all-time high, more organisations are looking into MagicOrange’s cost transparency platform than ever before. It is far better to be prepared and benefit from an ITFM tool now rather than waiting for another global crisis to occur in the future. when they do, businesses will already have a solution to alleviate some of those challenges.
The implementation and consultancy challenge
There is a big gap in the industry between the ITFM platform and the consultants. MagicOrange is bridging that gap by being a more practitioner-led product.
MagicOrange has created a unique framework called the ITFM Pathway to Success, which provides a series of planned steps that must be taken over a period of time in order to achieve the benefits of an effective IT Financial Management program. This framework provides clients with an understanding of what is needed to help them drive cost optimisation throughout their organisation by approaching savings initiatives systematically and holistically, from the perspective of both IT supply and business demand. In addition, the Customer Success team at MagicOrange provides consultancy support throughout the implementation phase as well as post-implementation to ensure benefit realisation.
Every ITFM solutions company is different – with one dividing line being, having the ITFM tool on cloud or on-prem. MagicOrange is a cloud-native tool, enabling it to provide support and be implemented from anywhere around the globe.
Utilising the ITFM Pathway to Success framework, MagicOrange will Assess & Plan, provide Service Definition, and Data Readiness; to ensure that the implementation is successful and that clients can realise the benefits once they start using the platform.
Learn more about the first 3 steps of the ITFM Pathway:
MagicOrange is the ITFM tool of choice
MagicOrange is recognised by Gartner, Forrester Research, and OMDIA as an established and leading ITFM tool. The tool has a very flexible approach and can easily accommodate any taxonomy. Flexibility is giving MagicOrange a real edge when it comes to expanding beyond IT and including other divisions across the enterprise.
There are four main criteria that make MagicOrange the tool of choice.
Capabilities of the platform
The ease of use. MagicOrange has a flexible approach that accommodates based on the requirement of the client. Once the platform has been successfully implemented and clients trained, it becomes a self-service solution. This does not only apply to just IT, but to all aspects of the business, for example, finance, operations and any other business functions.
MagicOrange uses a Cloud-native approach, which provides added flexibility, reliability, scalability and security allowing you to invest your time, money and resources into fulfilling your core business strategies.
Benefits versus value
Adopting an ITFM platform can be costly, therefore, it is important to compare costs and benefits among each of the platforms available. This is to make sure that businesses are adopting the best tool with the best price point without any additional costs down the line. MagicOrange does not make use of a modular cost approach nor does it incur any additional costs after implementation. Consultancy and services are included in the subscription cost.
Customer support levels
Many of the ITFM platforms on the market do not support businesses after implementation. Clients are expected to pay more for any additional consultation or support. With MagicOrange, consultancy services are provided as part of the initial cost once the tool is implemented, to make sure implementation is successful and that the benefits are realised.
It’s also important to understand the type of services different ITFM tools provide. MagicOrange provides both the tool and consultancy services at no additional cost.
At MagicOrange, customers will be assisted through their IT Financial Management/TBM and Cost Transparency journey to drive profitability and unlock value. The Gartner-recognised MagicOrange solution helps customers understand their profitability & costs, enabling them to utilise assets efficiently, showing accurate profit margins, and reducing manual effort. This provides the end customer with actionable insights that will drive their business transformation and future growth after implementation.