3 ITFM Best Practices for 2024

Best Practice 1: Consolidate Your IT Cost Data

Importance of Accurate IT Cost Data

To make informed decisions about IT investments, it’s crucial to have a thorough understanding of your IT expenses. Although general ledgers (GLs) are used as the source of truth for financial transactions and are two-dimensional (cost centers and accounts), the structure of GLs often cannot handle the complexity of the IT cost base. IT cost data includes specific transaction data, such as hardware and software activity usage data, which cannot be captured within the traditional cost center and account structure. Furthermore, IT costs may be dispersed over numerous GL accounts, making it even more complex to determine the total amount spent on IT.

Using ITFM Tools for Data Management

Gartner advises using four different types of views for your GL to address these issues: an asset view, a technology perspective, a business services view, and an investment view. Depending on how many views your organisation requires, accommodating these additional dimensions is complicated and cumbersome with a traditional GL. This is where an ITFM tool comes into play. ITFM technologies are created specifically to deliver precise, quick, and scalable views of IT costs. They can manage specific consumption data, including server host names or desktop serial numbers, which aids in providing transparency and understanding of the consumption activities of IT services. ITFM tools act as a sub-ledger of the GL, housing all the views, transparency, consumption, service data, unit rate calculations, showback and chargeback data, and reporting on all of them. While the GL is best for financial reporting, ITFM tools are ideal for multiple views on spend, providing distinct focus and strengths.

Best Practice 2: Establish a Strong ITFM Foundation

Assessing the Landscape

To achieve the benefits of an effective ITFM solution, it is essential to determine the key stakeholders, their reporting needs, and the data sources required to support the ITFM procedure. Engage with business partners, IT teams, and finance departments to understand their needs and expectations, as well as offer unconsidered solutions.

Defining Objectives and Metrics

Establish the parameters, objectives, and metrics that will be used to gauge success. Setting goals that align with the organisation’s overarching business plan is essential.

Creating a Roadmap

Build a roadmap that explains the steps necessary to accomplish the ITFM objectives. A timetable, milestones, and the resources needed to complete each task should all be included in this plan. To ensure that the roadmap stays aligned with the organisation’s strategy, it should be evaluated and updated regularly.

Building a Minimal Viable Product (MVP)

An MVP should be created with feedback from stakeholders. The MVP is a basic version of the ITFM tool designed to demonstrate the value of the process and to help refine the objectives and metrics. This is one of the many areas in which MagicOrange can assist, by collecting and analyzing IT spend data to provide insights for better decision-making. By using MagicOrange to create an MVP, organizations can validate their decisions with basic reports and dashboards while minimising investment.

Best Practice 3: Engage Stakeholders for Success

Importance of Stakeholder Engagement

To take a project forward, stakeholder engagement is crucial. Create an environment of trust and collaboration by showing willingness to align IT with business goals, listening to stakeholders’ needs, and collaboratively finding solutions. Support ad-hoc requests and set up regular slots where stakeholders can drop in to ask questions.

Proactive Stakeholder Collaboration

Set regular meetings with business partners to discuss future plans and priorities. Be open to opportunities to turn day-to-day funds into allocations that could grow the business or beat previous targets. Collaborate to prioritize these initiatives. This approach ensures that IT planning becomes more collaborative, with ownership extending beyond IT and financial departments, and prevents IT from being seen as a ‘black box’.

Why Choose MagicOrange for ITFM

Recognition and Flexibility

MagicOrange is recognised by Gartner, Forrester Research, and OMDIA as an established and leading IT Financial Management tool. The tool has a very flexible approach and can easily accommodate any taxonomy. This flexibility gives MagicOrange a real edge when it comes to expanding beyond IT and including other divisions across the enterprise.

Comprehensive Support and Consultancy

Many ITFM platforms on the market do not support businesses after implementation. Clients are expected to pay more for any additional consultation or support. With MagicOrange, consultancy services are provided as part of the initial cost once the tool is implemented, ensuring that implementation is successful and the benefits are realised.

Driving Profitability and Value

At MagicOrange, customers will be assisted through their IT Financial Management/TBM and Cost Transparency journey to drive profitability and unlock value. If your organisation requires a business partner to support you on your ITFM journey, the first step is to contact MagicOrange and speak with our team of experts.