TRANSPARENCY IN THE IT SERVICE CATALOGUE

The IT service catalogue and the service costs and prices behind it are essential indicators for the business. Here, too, it is essential for the business to be able to provide information about the expenses generated. Modern IT financial management solutions offer the business a self-service feature, which provides the necessary data in a way that it can be interpreted by managers who are not IT specialists. In this way, ITFM takes over a central controlling task and automates evaluations to support decision-making.

The business management should be interested in which services are purchased and which expenses or costs are caused by them. The relationship between price and performance can only be assessed if it is presented transparently. Often a more precise definition of the services catalogue is required. What are the essential performance characteristics of an IT business service, which service level agreements are included and how scalable is the solution in terms of business development? IT and business have to work hand in hand to master upcoming challenges in ever faster changing business environments. A cryptic description of services that are neither understood by the user, nor the stakeholder or the provider is not the basis for IT management.

Transparenz im IT Servicekatalog

The service catalogue must be written in a clear and comprehensible manner and must be tailored to the target group. That means explicitly that the number of business services offered and thus the number of items in the service catalog must be limited. The challenge lies in the fact that the business has specific, heterogeneous requirements whereas the technology basis ideally works cost-optimized and preferably homogeneous.

ITFM tools can resolve this area of conflict by breaking down the IT service catalogue items into underlying infrastructure services, hardware, software and licenses for the interested business owner. Drill-down into the depths creates considerable potential for designing and sizing the right business services in terms of type and scope.

IDENTIFICATION OF COST DRIVERS AND POTENTIALS

As soon as stakeholders understand the business and which parts of a service are cost drivers, intrinsic optimization processes take place. IT management and the business can work together to optimize services from both cost and performance aspects without relinquishing control over strategic technology decisions.

The goal of this process should be a service portfolio that shows both the services currently offered and the service potential they contain. This differentiation is of central importance under cost aspects. Not all the costs of an IT organization go directly into the services provided, but rather into the purchase, administration and maintenance of core business applications or are simply not attributable. At the same time, provisioned capacity potential is available but not used by the business. A service portfolio reflects these aspects and moreover contributes to IT risk management, which in turn is in the interest of the business.

Meanwhile, in many companies, no active chargeback of IT services within the company is carried out and even an upstream showback is still not standard practice. The cost accounting systems, internal cost allocation and controlling resources often cannot guarantee this. It is undisputed that an at least imputed allocation of services or performance analysis is indispensable for cost optimization from a performance perspective. In practice, this can be proven impressively with benchmarks.

UNDERSTANDING COST ALLOCATION AS AN OPPORTUNITY

An introduction of chargebacks or showbacks is often not driven out of IT. Rather, IT is confronted with the decision by the CEO or CFO. This process is not very elegant, since a cost allocation should be in the interest to the CIO. Budgets become transparent, services more comprehensible and strategic investments are driven by the support of the business. The reason for the passivity of IT has been the lack of tools for the automated and cause-related recording of IT expenses broken down by business services and the fact that service portfolios have not been defined in terms of performance. ITFM tools solve this problem and link the competencies of IT with the requirements of controlling. Nevertheless, the application owner and user of these tools is primarily IT. This should dispel the reservations of many CIOs on the subject of activity allocation. It is not a danger, but rather an opportunity.

IT FINANCIAL MANAGEMENT TOOLS ILLUSTRATE THE VALUE CONTRIBUTION OF IT

IT Financial Management Tools enable the assessment of IT expenditures: Costs are linked to services in a comprehensible and therefore tangible way. This makes it clear to business representatives that technology is needed and that IT therefore contributes value to the business. This makes IT not only a business partner, but also a co-designer.

IT financial management tools go so far as to break down IT costs and services to different user groups. While the business primarily uses applications, development teams consume resources for platforms and test environments. These and other distinctions are of considerable relevance for business management decisions. The consumption of resources and the requirements of high availability are thus contrasted with concrete use cases of the different user groups. These can be represented in practical key figures: IT costs per user type, per instance, per business process or business result. In IT Financial Management, this is referred to as user perspectives in various degrees of detail. For this very reason, ITFM provides essential parameters for the business that can be taken into account in decision-making.