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
- disaster recovery
- 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