Cost Transparency and Effective IT Governance

May 15, 2009

Download During downturns in the business cycle, many CIOs today are forced to cut capital spending and rein in costs for running IT. At the same time, they need to be planning for the recovery. This means CIOs must focus on cost optimization and competitiveness. In other words, running IT like a business. Senior management often sees IT as a black box - and a black hole for capital outlays - with no real visibility into where the money goes or how it translates to business value. At the same time, IT management often views the company's expectations as unrealistic given the budget and human resource constraints. Why has it been so difficult to bridge the gap and deliver true financial visibility into IT activities? And what can be done about it now, in the face of continuing pressure on IT budgets and growing complexity in the IT environment?

This paper provides substantive answers to these questions, with new insights into the underlying issues and a closer examination of the opportunities inherent in effective IT Financial Management (ITFM). The paper summarizes the basic requirements of ITFM, highlights some of the flawed practices that have created problems, presents best practice principles, and finishes with a summary of how the HP ITFM solution can help create a mature and efficient IT organization.