Financial Management for IT Services ensures a suitable funding of:
- Design
- Development
- Delivery
of serivces, which support the strategy of the organization. This can be done through regulation (no committment without funding) or balance (quality versus costs).
Scope
Financial Management for IT Services is responsible for the funding of activities and its accurate charging:
- Periodical Budgeting, e.g. yearly cyclus (CFO)
- Accounting, e.g. monthly or quarterly cyclus (Controlling)
- Charging (CIO)
These activities are influenced and defined by given legislator, ITSM processes and contracts. There are two major setups for the financial of an organization:
| Cost Center | Profit Center | |
|---|---|---|
| Charging | no | yes |
| Aim | List of accounts (per customer or service) | Profit cost coverage no operative loss |
| Return on Investment (RoI) | RoI evidence through IT for the business | RoI within the profit center |
| Influence on business | Limitted cost awareness without offsetting the overhead | Controll via pricing (higer influence) |
| Funding | Budget negotiation and assessment | Through services and their offsetting |
Activities
Critical Success Factors
The given elements are examples:
- CSF: A company-wide framework for financial management is established
- KPI: Framework exists and is used within the IT department
- CSF: Financial Management is a keyelement for strategic assessment
- KPI: All strategies contain a detailed analysis on investments and earnings
- CSF: The IT Service Provider can attest costs and expenses and allign to services
- KPI: Regular reports for service costs are created
- KPI: Suitable cost models exists