Financial Management
ITIL® defines Financial Management as:
…the sound stewardship of the monetary resources of the organisation. It supports the organisation in planning and executing its business objectives and requires consistent application throughout the organisation to achieve maximum efficiency and minimum conflict.
Financial Management requires a delicate balance to be effective. On the one hand, the cold objectivity provided by numbers ultimately translated into dollars must be weighed against the very real perceptions of Users. Complicating the equation are the often subtle cause and effect relationships at work within the context of this Discipline and its interplay with others, such as Service Level, Capacity, Configuration, and Change Management. Financial Management is key, however, to providing a verifiable metric to ensure that IT requirements are firmly grounded in business requirements and it is therefore worthwhile in some form for organizations of every size.
The process generally begins with requirements for the IT services necessary to satisfy a business need. Using various strategies, the actual costs of providing these services are compiled. At this point, to maintain consistency, budgeting decisions should be made within the framework of the organization's larger financial management strategy. Items such as which entities within the hierarchy will "pay" for services and how they will be "billed" must be clearly understood if budgets are to be accurate and delivered with confidence. Once budgeting is complete and resources allocated, the accounting system tracks usage and associates costs. more »
