Saturday, April 7, 2018

Financial Management for IT Services

Objective of Financial Management for IT

  • Provide IT services at a reasonable cost:
    • Support business in planning and realizing its business objectives
    • Ensure that IT spending is reasonable
    • Minimize financial risks in management decisions

Functions of Financial Management for IT Services

  • Cost Control develops an investment strategy to identify priorities in the use of resources. It covers all IT resources.
  • Management Reporting conducts cost/benefit analysis of IT resources by department. It also plans for future investments and looks at opportunities for cost reduction.

Factors for Delivering IT Services at Reasonable Cost

  • Quality involves
    • capacity
    • availability
    • performance
    • disaster recovery
    • support
  • Cost is concerned with
    • expenditures
    • investment
  • Customer requirements
    • determine the cost and quality of the service

Financial Management for IT Services Activities

  • Budgeting aims to predict costs and define financial plans for objectives
  • Accounting monitors how money is spent. It understands issues more than the cost of each service. Cost elements are also defined.
    • Cost types include:
      • Materials are hardware and software costs
      • Labour covers personnel costs like salaries, training and travel costs
      • Overhead costs that are related to the financial activities, housing and internal charges between departments
  • Charging involves billing clients for services provided. It encourages efficient use of IT resources by users.
    • Defines charging policies and determine the rate