Financial professionals find smart and efficient ways to free up working capital by reducing expenses and growing profit. Other tasks include; market research, market analysis, identifying new opportunities, etc. Making capital investments is possibly the most salient corporate finance responsibility and can have profound business consequence.
Bad capital budgeting (for instance under-funded investments or outrageous investing ) can jeopardize a company's financial standing, either because of inflated financing costs or having an imperfect operating capacity. Within firms, any department desiring to make a huge expenditure must typically run it by the Finance Division to secure funding.
On the flip side, IT management is a specialty by which all information technology resources of firms are administrated. Resources are managed based on needs and priorities.
Technology plays a paramount role in enhancing the overall value chain of a firm. Created value, made feasible by technology, is the fundamental focus of IT management. Creating value for clients, help sell services as well as products.
While the value creation for a firm requires a network of links between external environments, it needs the alliance of corporate strategies. It also calls for business and technology management to operate as a synergistic, creative, and collaborative body rather than a purely mechanistic span of control. Formerly, computing technology, run in a silo-like manner. Thus, one set of resources was devoted to one specific business application.
Until the 1960s, computing technology supported only complex calculations.They couldn’t be easily enhanced or redesigned to support real demand. This led technology providers to expand and supplement their product-centric infrastructure and management services with converged infrastructure environments that combined storage, servers, security, networking, management and facilities.
When it comes to managing information technology operations at the firm, ITIL is generally employed. It can be used in both the public and private sector to provide firms with a framework on how to structure and manage information technology operations. ITIL or BS15000 is the benchmark for service delivery in services procurement. ITIL checklists are neither organization-specific nor technology-specific.
However, it can be applied by organisations toward strategy and delivering value. It is always updated to ensure accuracy and to add emerging technological advances. ITIL also offers a systematic and expert approach to the management of IT service provision, and provides the benefits below:
- Decrease IT cost
- Enhance IT services through the use of proven best practice processes
- Enhance Customer satisfaction through a more professional approach to service delivery
- Productivity is Improved
- Improve Third-party delivery services
- Enhance use of skills and experience
- Standards and guidance
What Is The Cost Of Acquiring IT Infrastructure?
IT infrastructure is acquired at the most rational price, which certainly does not mean cheap. Ensured by IT Financial Management, firms are not only able to acquire IT infrastructure at a good price but also calculate the cost of offering IT services. These costs may then be recouped from the client of the service.
Using IT financial management processes help service managers to ascertain the amount being spent on security countermeasures in the delivery of IT services. During risk and business impact assessments, it is key to note that the sum being spent on these countermeasures need to be leveled with possible losses and risks that the service could incur.
Whereas a risk assessment report aims to determine risk factors, a business impact analysis report attempts to envisage how any identified risks will actually affect the firm if they occur.It is important to manage cost in the long run so that it reflects on the cost of offering IT services. And what is possibly charged in the recovery of these costs.
IT Professionals care about services they provide, Service Level Agreements (SLAs), suppliers, retailers, technology etc. However, there are largely lots of questions concerning financial issues of the IT services.
- What is the exact cost of our service?
- What is our overhead cost?
- How much are we suppose to spend?
Basically, variance results are generally used for revising monetary amounts for the next planning and budgeting cycle, and also for very simple departmental performance tracking.This process plans income as well as expenditure of money for a firm.
The following are the formulas for computing variance:
Variance % = Actual / Forecast – 1
or
Variance $ = Actual – Forecast
Variance % = Actual / Forecast – 1
or
Variance $ = Actual – Forecast
Planning and forecasting cannot be overemphasized, because it decreases the risk of over-spending. Performance-based budgeting also involves developing budgets based on the relationship between service funding levels and expected profit margin from that IT service. It is a way of preparing the budget based on the evaluation of the productivity of the distinct operations in a firm, which is a more cost-efficient and effective budgeting outlays.
ITIL Capacity Management is mainly to make sure that IT supplies are right-fit to meet now and future organizational requirements in a cost-effective way. The goal of ITIL Capacity Management is to establish the capacity of IT services and IT infrastructure to help provide the required service level targets at best price and on time.
ITIL Capacity Management is mainly to make sure that IT supplies are right-fit to meet now and future organizational requirements in a cost-effective way. The goal of ITIL Capacity Management is to establish the capacity of IT services and IT infrastructure to help provide the required service level targets at best price and on time.
This requisite skills from other sectors of the organization to pinpoint what services are needed, what IT infrastructure is needed to aid these services, what level of contingency will be required and what the budget of this infrastructure will be.
