Where are you on the IT Financial Management Maturity Curve?

With IT playing a greater role in business success, it makes sense that organizations take a more disciplined approach to IT financial management. But some organizations are further along the maturity curve than others. Where a company lands on that curve can mean millions of dollars in savings – or costs. 

In many organizations, IT financial management is still limited to spreadsheets or other manual modes of tracking, measuring and monitoring technology investments. While spreadsheets have served a role, staying wedded to these obsolete tools limits IT’s ability to transition from operational cost centers to innovating and delivering the greatest business value. 

Even organizations that have moved up the maturity scale to include corporate budgeting and planning applications struggle to gain the level of detail needed for true IT financial transparency. Moving to a comprehensive IT financial business management (ITFBM) solution brings greater control and visibility to IT finance and business management services and helps organizations advance the maturity curve around IT financial discipline. 

IT financial management (ITFM) can generally be broken down into five levels of effectiveness or practice maturity. Which level best describes your organization?


Level One: Ad Hoc — The ITFM practice is ad hoc and unorganized. Few if any staff and financial resources are dedicated to it. Success is based on the competence and efforts of a small number of individuals who either take an interest in the process or produce “heroic” efforts. Despite this chaotic environment, the practice may be implemented successfully. But because it is uncoordinated, efforts are often inefficient and go over budget and schedule. Quality may also vary widely because different people perform the same tasks over time. 

Level Two: Planned — The ITFM practice is planned and deliberate as opposed to being performed on a reactive or as-needed basis. Resources are allocated to the practice, responsibilities are assigned, and the process is managed to some level of repetition. The practice is done with little depth, however, and may vary from business unit to business unit. 

Level Three: Institutionalized — The ITFM practice is routine and part of the IT and line-of-business organizations’ “fabric.” The organization has strategically determined the best way to approach the practice and has institutionalized it. Practices are known and coordinated within and outside the organization. 

Level Four: Evaluated — Data from the ITFM practice – as well as the ITFM practice itself – is regularly evaluated and analyzed. Measures of performance and progress are collected and analyzed. Often a quantitative understanding of success is known and tracked, and the organization has a better ability to predict or estimate IT spend ROI. 

Level Five: Optimized — Because of its recognized importance to the organization, the practice is continuously reflected on and improvements incorporated. 

Distinctions between levels one and two are based on the degree to which an organization is reactive (level one) versus purposeful and proactive (level two). At level three, the practice is performed regularly, consistently across processes and staff, and has been performed enough that the organization has gained a certain level of proficiency and sustainability. At level four, the organization has committed to tracking the practice for purposes of better understanding how to improve performance; the organization is monitoring the quality of the practice. Practice objectives are well documented and managed to consistently. Level five demonstrates an even higher level of organizational commitment to the practice, as the organization cares enough about it to learn from and improve performance over time. 

Through a mature ITFBM approach the IT organization has access to accurate data and a roadmap to reach a state of alignment with the rest of the business – the “Holy Grail” for today’s CIO. For example, mobility, cloud and big data are emerging as technologies that can significantly improve the business, but the challenges run parallel to the opportunities. 


CIOs need to understand the strategic business value of technology trends and how they can be used in a new, transformational direction for the organization. Providing senior management, business divisions and even individual departments with greater transparency into the cost of their IT consumption ensures accurate information is used to drive decisions and that IT investments align with business priorities and objectives. The ROI for IT expenditure is no longer a matter of mystery, but one of objective, accurate and sustainable reporting processes. 

Moving along the maturity curve helps organizations make practices and processes easier. Adopting a robust ITFBM solution, including a software-as-a-service (cloud) application and a partner who provides comprehensive support is the most efficient way for an enterprise to capture that expertise and do more with fewer resources. Together, those two elements — a deep bench of specialized, consultative business-process expertise and cloud application implementation to improve flexibility while reducing roll-out costs – define a mature, value-added ITFBM solution. 

Increasing IT fiscal maturity can bring a state of efficiency to budgeting, reporting and forecasting and ensure deep cost transparency is part of regular operating procedure. Best in class companies that have advanced up the IT financial maturity curve are using actionable data intelligence to improve decision-making, optimize IT investments and achieve greater business value. Where are you on the IT financial management maturity curve?

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