When you purchase a new car, one of the primary considerations along with make, model and color is price. But many people often fail to calculate is the total cost of - including fuel, maintenance, insurance and repairs - that they will incur over time. In other words, they don't adequately manage their finances.
Similarly, most IT organizations effectively put significant efforts into managing the costs related to projects - about 20 and 30 percent of their expenditure-but don't account well for the remainder, making it difficult for IT to justify expenditures against business value.
As IT becomes the vehicle by which business is executed - whether in-house, through outsourcing or the cloud - the requirement of Financial Management is critical. It's a discipline that IT must leverage more effectively. To justify its costs and demonstrate value, IT needs to be an effective custodian of IT assets and effectively plan, budget and control.
After 30 years in this industry, I remain shocked at how much time IT spends working out the costs of new initiatives, tracking these costs through development and then tossing the solution over the fence to operations and simply forgetting it costs money to run the service. In the latest issue of ServiceTalk from the itSMF UK, I offer a two phased approach to addressing this challenge--focused on cost management and cost-effective sourcing decisions. A copy of the article can be viewed here.
What do you think? To remain effective and relevant, IT needs to act now!