Discover Performance Blog
Welcome to the Discover Performance blog, a resource for enterprise IT leaders who share a passion for performing better. Here you’ll find strategic insights and best practices from your peers as well as from HP’s own practitioners who help others define, measure and achieve better IT performances.

Show me the money. Better yet, show me the value!

showme.jpgIs IT finance really about IT resource governance?

 Last week, I got to sit in on a customer advisory meeting prior to the opening of HP Discover. The participants worked in businesses as diverse as oil and gas, consumer goods, insurance and consultancies. We asked them about problems they were having with IT financial management. Their pain points centered on the following: 1) the ability to show value to the business; 2) the ability of the business to understanding there were limits to IT investment; and 3) the business finding that IT costs were too high.

How one organization took care of its IT financial management mess?

IMG_1614-Edit_SML.jpgThere is no question that electronic spreadsheets revolutionized the world of financial analysis. And although more interesting options have emerged from time to time, Excel has become the go-to financial tool for nearly everyone. However, Excel has always had difficulties performing complex financial modeling. My firsthand experience shows that financial macros break, and auditing a bunch of (a1-b2)/(c4*c5) can make anyone go blind. And how do you easily create more than one version of a plan? Let’s face it, options are the life’s blood of most IT managers and IT financial leaders. One partner I know of calls IT financial modeling “the mother of all spreadsheets.”

Is IT shared services on the short end of the stick?

IMG_1614-Edit_SML.jpgLast week, I visited with the head of finance for an infrastructure management (shared services) group within a global 100 financial institution. This IT leader said that their Global CIO along with the business had made the decision to cut run-the-business spending (most of what shared services is about) to 50% of the IT budget. This means they are now putting 50% into change-the-business spending.  At first, this seems like a great move, but the head of finance is asking the $1m question. “Where is the money to run all this change stuff when it is ready to go into production?” Like many companies, these costs were not considered in the financial planning process.

Service based finance is COBIT 5 required. Are you ready to support it?

IMG_1614-Edit_SML.jpgIf you’ve been following my series on COBIT 5, you know the new release of the COBIT standard will help IT organizations achieve greater customer satisfaction, operational excellence, and future orientation. But what it says about service based finance is important and something you should pay attention to. COBIT 5 gives enterprises an approach for getting the financial side of IT in order, with clear goals and metrics you can adopt.

Your cloud or virtualization strategy demands a new approach to your IT books

Better Less.jpgPublic cloud, private cloud and virtualization demand that VPs of Operations and their teams be able to do something brand new. No longer is it acceptable to have costs locked up in the pieces and parts of technology cost centers such as networking, storage and so on. Instead (as I recently wrote in my post “Allocating IT costs so the business gets IT!”) infrastructure, maintenance and people costs need to be brought together into an end-to-end IT service cost. This is pivotal to making strategic choices between internal and external delivery options, so that the overall cost of running the business of IT can be reduced.

Using cost allocation so the business gets IT!

Better Less.jpgLast week in my post “Achieving financial transparency through IT Financial Management,” I talked about the importance of getting IT costs to a business service level. As a reminder, we need to do this in IT so the business understands where the money on a plan is going and so IT can “act like a businessperson” in its discussions with the business regarding spending priorities. But how do you do this when how IT collects its costs by cost center? The answer is allocation.

Achieving business transparency through IT Financial Management

Better Less.jpgIn one of my recent posts (“Using COBIT 5 to show IT’s contribution to financial performance”), I mentioned that the new COBIT 5 standard provides a scorecard for IT to rate itself on how it supports financial performance. One goal in particular – driving transparency into IT costs, benefits and risks – is especially difficult for IT. It’s so difficult (but so important) that I wanted to look at what’s keeping IT from realizing this goal.

3 steps IT can take to prove and manage value

keithmacbeath.jpgBy Keith Macbeath, senior principal consultant with HP Software Professional Services

 

The IT function brings value to the business, right? Most, if not all, of us in IT would say yes. Can you measure it? There’s the problem. The value that IT brings has always been assumed. And since historically that value hasn’t been talked about in a structured or quantified way, IT has gotten labeled as a cost center. Today, with external services chipping away at internal IT’s role, the issue of demonstrating value has never been more critical.

 

Of course, if IT was truly just a cost, then enterprises would try over time to get rid of it, or do the absolute minimum. Yet there are very few industries today in which IT does not play a very significant role in the operation of the business. So IT is there for a reason. But the reason that value management hasn’t been done is that it requires a certain number of things that IT either has been uncomfortable with or hasn’t gotten around to.

 

IT needs to tackle these issues however if it wants to be a strategic partner to the business. Here are three steps that IT can take to turn this around.

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About the Author(s)
  • Alec Wagner is a longtime writer & editor, enterprise IT insider, and (generally) fearless digital nomad.
  • Lending 20 years of IT market expertise across 5 continents, for defining moments as an innovation adoption change agent.
  • This account is for guest bloggers. The blog post will identify the blogger.
  • I'm the community manager for Discover Performance and have been a writer/editor in the technology field for several years.
  • Mike has been with HP for 30 years. Half of that time was in R&D, mainly as an architect. The other 15 years has been spent in product management, product marketing, and now, solution marketing. .
  • Paul Muller leads the global IT management evangelist team within the Software business at HP. In this role, Muller heads the team responsible for fostering HP’s participation in the IT management community, contributing to and communicating best-practice in helping IT perform better.
  • Rafael Brugnini (Rafa) serves as VP of EMEA & APJ for HP Software. Joining in 1996 and has more than 20 years of knowledge and experience linked to HP. He resides in Madrid with his wife and family, and in his spare time he enjoys windsurfing.
  • Evangelist for IT Financial Management (ITFM), IT Governance and IT Portfolio Management, consulting IT organisations for Close to 15 years on principles of good governance.
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