The Future and Convergence of IT Financial Management, TBM & FinOps Disciplines in the Modern Enterprise Environment
The MagicOrange team is pleased to share a recap of our November 15th 2023 webinar exploring the future of IT Financial Management, TBM and FinOps and the convergence of these disciplines in the modern enterprise environment. We were joined by Tracy Woo, the lead Forrester analyst covering the ITFM and FinOps categories and by Chris Barnes, Head of Technology Financial Management Strategy from Experian, a MagicOrange customer.
MagicOrange asked Tracy Woo, Forrester’s Principal Analyst for ITFM, TBM and FinOps, to respond to some engaging questions on the real-world stories and challenges they have encountered in the quest for financial transparency.See Below
Principal Analyst for ITFM, TBM and FinOps at Forrester
FinOps Lead at MagicOrange
Head of Technology Financial Management Strategy at Experian
What are the benefits of an open data model vs a closed taxonomy such as the TBM framework?
Tracy Woo: There is a long held debate between the benefits of an open data model versus a closed data model. Increasingly end-user organisations are shifting towards products that operate on an open data model. Simply because an open data model often means there is a higher level of community engagement where more vendors and end users alike are working with the same data model.
End users are attracted to the open data model because of the lower or no costs involved. The openness is more likely to attract a community of innovation and engagement around it, thereby insuring a high degree of confidence that they are not increasing their technical debt. Vendors are attracted to the open data model because it means a larger audience are more likely to use their products.
Other benefits include:
- increased transparency about the data itself end users are more confident in the data because it is freely and publicly available, empowering stakeholders to act on the data).
- reduced corruption with higher transparency comes increased accountability and higher integrity).
What are the drawbacks to a custom reporting module?
Tracy Woo: Many management vendors provide business intelligence tools as a part of their solution. In a pinch and for small, surface-level requests, these will suffice. However, for deeper requests that require enterprise-wide business data visualisation for each part of the organisation, many of these tools won’t. And there are a ton of business intelligence tools out there. However, only a few remain superior.
As a vendor, don’t reinvent the wheel. Many have tried and failed. As an end user, use the best industry leading tools out there. You’ll benefit in two ways. You are more likely to find skilled individuals that know these tools, that you won’t have to train on a proprietary platform. And you’ll benefit from using industry-proven tools.).
How important is a unified code base between core ITFM, FinOps, Project Management and Budget Forecasting software?
Tracy Woo: In the world of cloud management there are a lot of suites that come packaged with multiple capabilities, all available via different modules that are pieced together. These can be ok, but it’s important to properly vet that these tools are unified in a seamless manner.
Often, these tools are not integrated well and organisations are left troubleshooting or toggling between different portals just to reap all of the benefits. Look for platforms that have an integrated, unified code base. If you’re managing a hybrid cloud environment where core IT financial operations must integrate with FinOps and project management think about tools that are built from the ground up with all of these capabilities n mind.
What are some of the dynamics around pricing in the ITFM space?
Tracy Woo: One of the biggest complaints I hear from our clients is pricing. They are frustrated by the dozens to hundreds of different bundles in pricing. They’re tired of the constant nickel and diming that comes just to release tiny increments of capabilities. They want predictability in their spend. They want to know upfront what they are getting without having to wade through all of the different options and bundles.
There has been significant M&A and other investment activity in the ITFM and FinOps space recently. How does that effect ITFM’s Future?
Tracy Woo: That’s a very interesting question. Recent acquisitions and investment in the space has validated both FinOps and ITFM as mission critical for enterprise organisations. Further, the intersection of FinOps and ITFM validates the need for the existence of an integrated ITFM/FinOps solution for enterprises.
However, there cannot just be one solution out there and all the competitors, not just those who have received funds or been purchased, will benefit from the spotlight on the industry. As activity in the space ramps up, enterprises will certainly be evaluating vendors who have gone through acquisition or investment with extra scrutiny to ensure that roadmap deliverables are timely, leadership is focused and consistent, and product innovation meet expectations.
Companies in the ITFM/FinOps space that leverage an open taxonomy, share a unified code base between core ITFM and FinOps applications and leverage best in class, gold standard reporting tools will have a distinct advantage and have a shot at being the category leader over the coming years.