What is IT Financial Management?
Understanding IT Financial Management
In its purest form, IT Financial Management (ITFM) is centred around managing the cost of technology within an organisation. It differs from traditional financial management where there are many more interconnected value chains and shared services associated with it.
IT is often assumed to be “a black box” that doesn’t show true value to an organisation. ITFM helps unpack this assumption easily by enabling users to understand and manage their technology cost more efficiently, transparently and effectively.
Many organisations ask if they are ready for ITFM or if it is needed at all. ITFM works across any industry and is universally applicable in terms of organisation size. However, the higher the value of spend, the more important it becomes to understand cost transparency and what the interconnected costs are. As a result, everyone can benefit from an ITFM implementation. MagicOrange typically sees three distinct stakeholders that benefit from ITFM: CIOs; Senior Management/C-Suites; and Finance teams.
CIOs will often have the initial problem of investigating how much their company spends on computers or storage, yet they do not have visibility on the complexity of IT and shared services.
Senior management is responsible for cost allocation, but interconnected cloud and IT costs are buried within disparate Excel spreadsheets.
Finance teams must have an overview on a business’ intrinsically linked costs and struggle to identify where the source of overspend is when data is not organised efficiently.
With ITFM, all departments and key stakeholders will have a full understanding of the value of IT and be able to share this with other members of the organisation. Having the ability to access a dashboard and view a detailed report, present detailed analytics and speak each other’s language is greatly beneficial, regardless of the department that requires the information.
Whilst ITFM enables companies to translate technology spend into a view that helps them understand how they are consuming IT, it is the ongoing use of ITFM tools that delivers fantastic ROI when properly implemented.
Businesses can have one single report to see everything, or they can have multiple reports to separate different data sets, even if they start with a low ITFM maturity base. MagicOrange will help assess your services and data maturity to ensure that the data is validated, reputable and of a high integrity.
Organisations can use ITFM to factor potential business growth through accurate budget reporting tools. ITFM unlocks historical data to help understand business’ consumption patterns, highlight inefficient services and introduce new business models that give the ability to investigate how to further improve cost optimisation opportunities. This data enables businesses to analyse spending and plan and predict their future.
Depending on an organisation’s data maturity, data availability, and their resources, they can see results within just a few weeks. When starting your ITFM journey, ensure that you are working on a key insight that your business doesn’t have today. Once this is achieved, you can begin to iterate from there utilising the ITFM tool for your various business needs. It is said that the best time to have planted a tree was 20 years ago. The second-best time is today. We believe that the same applies to your IT Financial Management (ITFM) journey!
One of the key benefits that makes MagicOrange unique is that we ensure that our customers are achieving success after implementation, largely thanks to our dedicated Customer Success team. Any of our customers can book time with our consultants for advisory services, and additional training is included in their license fee. MagicOrange does not charge clients for additional consultancy. The relationship with our clients and ensuring that the benefits of our platform are realised, is paramount to the MagicOrange team.
MagicOrange has been purposefully designed with optimum accessibility. Our platform is intuitive and allows users to get started as quickly as possible, regardless of their previous technological experience. The tool can ingest millions of data inputs within minutes thanks to our best-in-class solver algorithm.
If you would like to learn more about how to optimise your technology spend or realise the benefits of MagicOrange, please get in touch with our team today.