In an uncertain economy, CIOs face rising pressure to justify spending, secure budget for innovation, and prove that IT delivers value. That’s difficult to do without a sound framework for IT financial management (ITFM). Our three-phase framework gives IT leaders a tested, ready-to-implement, and scalable model to analyze and understand IT expenditures – and communicate them in meaningful way to all stakeholders who have a vested interest in technology spending.

Many IT departments struggle to meaningfully communicate technology spend and the rationale behind it. The core issue is the lack of a shared model for communicating IT spend to Finance and the business – leading to inconsistent tagging, unreconciled numbers, and a lack of insights. Improve usability, depth, and transparency of technology spend data with a taxonomy that conveys meaning to all stakeholders.

1. A common cost language is a critical first step in IT’s financial accountability.

Establishing an IT cost taxonomy that clearly classifies IT’s financial data is the first step in demonstrating IT’s ability to meet its financial accountabilities. It enables full transparency and builds trust in the important decisions being made using that data.

2. A taxonomy is more than just a way to organize data.

It’s a communication tool. A taxonomy should make IT spending meaningful to non-technology audiences. If you can’t tag your technology spend in a way that’s meaningful to these audiences, you can’t expect them to understand it.

3. Collaboration with Finance is key.

Your taxonomy is one part of the finance ecosystem. Collaborate with your central Finance team as well as other important stakeholders (e.g. Procurement) to ensure a truly meaningful IT cost taxonomy that works for everyone.

Use this step-by-step blueprint to balance the books and build IT credibility.

Our three-phase methodology provides a cohesive roadmap to improve your ITFM capabilities, starting with an organized and meaningful IT financial data set. Use this framework to:

• Discover exactly what IT financial data is and where it lives in your organization.
• Classify and organize your IT financial data and create cost allocation and attribution rules.
• Provide a foundation for transparency and evolve your ITFM capability overall.