cyberbizafrica August 26, 2023We then examine the IT financial management practices members seek to improve in order to achieve these goals, as well as the tools they are implementing to derive value from their cost transparency efforts. Next, we focus on the primary audiences for IT cost information across the enterprise. And finally, we close the summary with an in-depth look at the main ongoing challenges members face around IT cost transparency. CIO Insight offers thought leadership and best practices in the IT security and management industry while providing expert recommendations on software solutions for IT leaders. It is the trusted resource for security professionals who need to maintain regulatory compliance for their teams and organizations. CIO Insight is an ideal website for IT decision makers, systems integrators and administrators, and IT managers to stay informed about emerging technologies, software developments and trends in the IT security and management industry.
Many entities are involved in the planning and delivery of major infrastructure projects. Legislation and Government policies, guidelines and frameworks provide overarching rules that govern the financial management of these projects and the State Budget process provides Parliament with a regular opportunity to scrutinise new and ongoing spending. Many entities are involved in the planning, governance and delivery of major infrastructure projects. A high-level summary of key entities and their roles and responsibilities is provided below. Application of evidence-based strategic planning practices allow for the identification of infrastructure needs and challenges, which provide the foundation for the development of robust infrastructure proposals. IWA’s work aligns with and supports application of the WA Government’s Strategic Asset Management Framework (SAMF).
Gartner research: Trusted insight for executives and their teams
Regular analysis of the expenses and costs assists executives in understanding the performance of teams and the relation of employees and consumption. When the results are constantly reviewed, this can lead to a discovery of unnecessary services and software that does not bring any results. Employees will be able to figure out which of the used materials are more valuable to the company and help to prevent additional expenses. IT cost transparency is basically tracking the total price of the delivery and maintenance of the IT services provided to a certain business. Various management applications are used to calculate all the expenses and make sure that the budgets are not drained for nothing.
When you replace all approximate amounts with precise numbers and explanations, businesses are capable of making objective decisions. Cost transparency shows all the expenses that are connected with the provided service including assets and labor. This makes it easier for stakeholders to have a clear conversation without misunderstandings. IT departments should not be viewed as a cost centres anymore but be recognised as revenue producers. By understanding the correlation among systems and replacing assumptions for real data, organisations can add real value to their business and make strategic decisions with evidence, a real advantage for uncertain times.
Data Management vs Data Governance: An Introduction
Centralized finance (CeFi) is defined as a financial ecosystem where centralized authorities control financial assets… Bring definition and detail to your technology spend, and recover valuable resources by streamlining complex, redundant efforts. A set of agency “stories” that document the key activities, inputs, outputs, and other LOB intersections to describe how the Federal government operates. These IT Cost Transparency standards have been developed by a cross-functional team, based on industry best practices and incorporating agency feedback.
- They will serve as a substantial input to IT lifecycle standards and agency modernization efforts.
- Being able to decommission unnecessary hardware and software is a huge piece of cost transparency.
- A high-level summary of key entity roles and responsibilities is provided in Appendix 2.
- This is particularly poignant in the Japanese market, where the role of CDO/ CIO, while on the rise, only exists in a small number of organizations.
- By putting things into terms for even non-IT leaders to be able to understand and analyze, the business can start to put plans into place on what makes sense and what does not.
To improve performance, companies should aim for cost transparency—obtaining costing data that goes beyond what’s necessary for financial reporting or inventory valuation. We reviewed the cost and time performance of 20 projects using information from entities and Budget Papers. For each project we compared its current approved cost and time budgets to both original and prior approved budgets, and assessed the extent of cost and time variances.
Transparency Report: Major Projects
Cost optimization activities often occur organically within different areas of the IT organization, and are not managed centrally unless a cost reduction target is mandated. “Increased demand for IT projects and services, coupled with the challenges that arise as organizations move to digital business models, has heightened the need for CIOs to do more than simply manage the IT budget,” says Jim McGittigan, research vice president at Gartner. “CIOs serious about making long-term changes on the financial side of their IT organization need a framework to plan for these changes.” One of the first steps towards IT cost transparency is to find the IT asset baseline. This is accomplished by performing a complete analysis of the number of IT assets that are chargeable and determining how they are used. These assets might include things such as servers, networks, storage, software, mobile devices, and employee workstations.
When all three elements are implemented in the daily routine of the company, the cost optimization will be achieved in no time. Many companies use several servers and hold expensive licenses, so the understanding of how it cost transparency valuable they are to a business is crucial. Software, hardware, and licenses may appear to be the most expensive part of the list. An ability to discard unnecessary elements is an enormous part of the cost transparency.
[Case Study] State IT Agency Simplifies Cost Allocation to Gain Visibility and Trust
It is the essential first step towards standards that will drive economies of scale and leverage the government’s buying power. Nhu Le is a manager at Strategy& with over 10 years of advisory experience across Australia, Hong Kong, Japan and Malaysia markets. She has extensive experience in designing and leading digital transformation programs. She has advised clients in banking and insurance on getting the best values from technology investments and enablement, such as core system modernization, strategic IT investments, IT operating model optimization and organization-wide digital transformation. Project summary sheets within this report have been prepared by the OAG to provide a description of each project and the project’s cost and time status (Appendix 1). The CCT also released a set of financial aid offer examples that meet the initiative’s principles and standards for institutions to use in developing or updating their aid offers and a glossary of common financial aid terms and definitions.
This allows Infrastructure WA to provide independent advice to the Premier as required by the Infrastructure Western Australia Act 2019. Infrastructure WA advice aims to ensure projects align with Government’s objectives and costings are well-informed prior to an investment decision being approved and announced. I have also recommended all State entities seek Infrastructure WA’s advice and assistance when preparing their infrastructure strategies, plans and policies. The planning and delivery of these major infrastructure projects are specialised and complex.
The 3 elements of IT cost transparency
IT cost transparency combines elements of activity based costing, business intelligence, operational monitoring and performance dashboards. It provides the system on which to implement ITIL v3 Financial Management guidelines to assist with Financial Management for IT services and is closely related to IT Service Management. As costs are regularly reviewed and analyzed, executives have the ability to see how their employees affect consumption and how teams are performing. When staff knows that data is going to be seen and shared, it can lead to increased engagement and reduced unnecessary costs. Once numbers are reviewed on a routine basis, cost transparency can influence employees to notice services and software that isn’t beneficial. What this means is that the numbers from the analysis and asset baseline must be understandable in order for action to occur.
The commitment comes as lawmakers, think tanks and government entities continue to scrutinize the financial aid offers that colleges and universities present to students. Together, these institutions serve more than 3.5 million college students in the United States. If you decide to add IT cost transparency just to check it off the list, you won’t achieve any results.
Antipattern 3: Approaching IT cost transformation as discrete, incremental initiatives on a highly fixed IT cost structure
Build a new appreciation for the value of IT across the organization, and empower IT Leaders to make an impact on the business. Identify the minimum data fields required to support the inputs and outputs noted in the use cases and capabilities. Connect directly with peers to discuss common issues and initiatives and accelerate, validate and solidify your strategy. Our independence as a research firm enables our experts to provide unbiased advice you can trust. Cost transparency uncovers areas of spending previously ungoverned or unaccounted for by IT.