Increased user numbers and demands for new technologies have caused the costs of IT Services to grow faster than other costs and are perceived as high and inflexible. The complex nature of Accounting for IT usage often leads to dissatisfaction and questionable 'value for money' of the services themselves. IT Services must understand true cost of providing service and manage costs professionally.
ITIL Financial Management supports the organization in planning and executing business objectives, and requires consistent application to achieve maximum efficiency with the minimum of conflict. The scope of Financial Management includes Budgeting, IT Accounting and Charging.
Benefits of ITIL Financial Management
The benefits of ITIL Financial Management include:
Increased confidence in the setting and managing budgets
Provision of accurate cost information to support IT investment decisions
Accurate cost information for determining the cost of ownership for ongoing services
More efficient use of IT resource throughout the organization
Increased professionalism of staff within the IT organization
Possible problems
The following problems may be encountered when implementing IT Accounting and Charging:
Limited understanding in IT Services in Cost Modelling and Charging mechanisms could potentially lead to over-complex and ineffective systems
IT Accounting relies on planning information internal and external to IT Services Management which may not be routinely available, thus delaying project(s)
Staff combining accountancy and IT experience are rare, may involve staff external to IT Services whose priorities may differ
IS strategies and objectives of the organization may not be well formulated, documented and prediction of Capacity requirements are not accurate
Senior business managers may not recognize the benefits of IT Accounting and Charging, resenting administrative overheads and limitations on workload
IT organization becomes inflexible to Changes in Users' demands once costs become an influence
Processes are so elaborate that the cost of system exceeds the value of information produced
Monitoring tools providing resource usage information are inaccurate, irrelevant, costly to develop and maintain
Costs
The costs fall into three broad categories:
Administration and organization costs for planning, implementation, ongoing operations and management of the process
Extra computing resources to automate and facilitate IT Accounting and Charging
Purchase and support of tools required to carry out the processes
When costs are visible, particularly when Real Charging is in place, demand for some services may fall, assisting organizations to identify and reduce inefficient use of IT resource.