Project Portfolio Management, IT Financial Management Blog

Allocating IT costs so the business gets IT! The keys to IT financial management

Exercise Bike.jpgLast week in my post “Driving transparency for IT financial management — are we all speaking the same language?” I discussed the importance of relating IT costs to a business service, business process or business capability level. For IT leaders, this involves changing the way they view IT. They need to shift from solely thinking about the things IT does (the how) to thinking about IT enables (the what).

 

Richard Hunter and George Westerman said in their book, “Real Business of IT: How CIOs Create and Communicate Value,” that IT is like an exercise bike. The value proposition of the exercise bike is not in the pedals, handlebars or the other components; it is in the ability to lose weight and get in shape. The challenge for all IT organizations is to help their business understand where the money spent on IT is going. At the same time, IT has to act more like a businessperson when it comes to discussions regarding spending priorities and control. But how do you get IT leaders to make this change when IT collects its costs by cost center? The simple answer is by utilizing allocation.

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About the Author(s)
  • Brian is a Product Marketing Manager for Application Development Management Solutions with and previously for Project and Application Portfolio Management, with extensive experience in presales and implementation roles.
  • This account is for guest bloggers. The blog post will identify the blogger.
  • The voice of HP PPM. Keep up with us for all things Project and Portfolio Management.
  • I help IT leaders to understand how well IT is performing from a business perspective.
  • 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.
  • WW Sr Product Marketing Manager for HP ITPS VP of Apps & HP Load Runner
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