In a time when IT costs are continuously rising and companies need to use their resources more efficiently, IT Financial Management (ITFM) and Technology Business Management (TBM) are becoming increasingly important. But what exactly are ITFM and TBM, and why should a company care? ITFM is the discipline focused on the strategic planning, control, and management of IT spending. The goal is to create transparency around IT costs, use budgets more efficiently, and position IT as a business enabler rather than just a cost center.
Technology Business Management (TBM) is a structured framework that helps organizations manage their IT operations efficiently and in alignment with business goals. It goes beyond financial management and includes areas such as portfolio management, service delivery, performance optimization, and cost transparency. The main objective of TBM is to link IT spending directly to strategic business objectives and enhance collaboration between IT and other departments.
In contrast, IT Financial Management (ITFM) focuses specifically on the financial control of IT services and resources. It includes budgeting, cost control, financial planning, and accounting for IT organizations. An increasingly important area within ITFM is Financial Operations (FinOps), which addresses the financial challenges and optimization of cloud costs. The overarching goal of ITFM is to ensure that IT services are delivered in an economically sustainable and strategically sound way, aligned with the company’s financial framework.
TBM provides a holistic management approach that includes the strategic, operational, and financial aspects of IT governance. ITFM is a core component of TBM but focuses solely on cost transparency and the financial efficiency of IT. While TBM helps companies align IT investments with business value, ITFM enforces cost discipline and ensures efficient IT spending. TBM is especially relevant for CFOs and CIOs, as it creates a common language between IT costs and business objectives. Organizations that combine both approaches benefit from greater efficiency, tighter budget controls, and a stronger connection between IT and business strategy.
Why is ITFM so important in the beginning?
- Rising IT costs: Companies are investing more in IT – without proper control, inefficient spending quickly accumulates.
- Aligning CFOs and CIOs: ITFM ensures that technical and financial decisions are better coordinated.
- IT as an investment, not a cost factor: With ITFM, companies can clearly define the value contribution of their IT.
Key building blocks of ITFM
- IT budgeting – How IT budgets are planned and optimized.
- Cost allocation & transparency – Who is responsible for which costs?
- IT service management – How IT services are efficiently managed.
- Automation & reporting – Real-time visibility into IT costs.
ITFM in the context of digital transformation
IT faces significant challenges as digitalization fundamentally changes operational processes. Key developments include:
- Process automation and digitalization
- Remote work and hybrid work models
- Digital workplace transformation
- Accelerated market changes
Challenges and developments in the IT landscape
Staffing & sourcing
The IT industry is struggling with a shortage of skilled professionals and rising personnel costs:
- Shortage of qualified IT personnel
- Rising labor costs in IT
- Increased use of outtasking and outsourcing
Business models and technologies
Companies are increasingly leveraging digital innovation to gain a competitive edge:
- New digital, online, or automated business models
- Enhancing existing models through digital components
- Implementing AI & robotic technologies
- Using big data and advanced analytics software
The role of IT in the enterprise
IT is no longer just a support function but a central part of value creation:
- Growth and increasing complexity of technologies
- Widespread adoption of cloud technologies
- Expanding service and application portfolios
- Decentralized business requirements
- IT as a business enabler and trusted advisor
- IT as a profit center and strategic success factor
- IT as the backbone of value delivery
Regulatory requirements & security
As digitalization progresses, so do demands for compliance and security:
- Increased compliance, reporting, and audit requirements
- Rising number of cyberattacks
- Growing importance of cybersecurity measures
IT Financial Management (ITFM) is a crucial tool for managing rising IT costs efficiently and ensuring transparent, strategic IT financial planning. Organizations that combine ITFM and TBM benefit from improved budget control, clearer investment decisions, and stronger alignment between IT and business strategy.
