Managing Your Finances

Managing Your Finances Spending money wisely is a very important thing to know how to do if you own a business or if you like to invest your money. Financial Management is a great tool that is relevant to all three service provider types. Internal service providers are asked to operate in the same levels of financial visibility and accountability as their external counterparts.

Financial Management enables an organization to understand the worth of their IT services in financial terms. It also aids the understanding of the value of their assets, and also allows us to set realistic budgets. The key is to be able to attribute a value to the services being offered. This will cause a change in the perception of IT and its value to the business.

The questions you should ask about Financial Management are:

Which services are the most costly, and why?

What services do you offer, what is the demand of these services, and how much do they cost to provide to customers?

How efficiently can we give our services compared to other companies?

In what areas do we have the highest opportunities for us to focus on in terms of Continual Service Improvement?

Having a Good Business Case

For every service offered there should be an adequate business justification. A good business case will consider qualitative and quantitative dimensions. A business case may take many forms but broadly speaking all will include objective and impact and will take the following form:

An introduction

This is used to show the objectives addressed by the service. What is the proposal for and what do we want to achieve?

Methods and assumptions

It's very important to show all your assumptions so they can later be compared against reality. Also it is very important to document your methods. These may help to identify costs which help with the evaluation. The likely beneficiary will also need to be identified.

The business impact

This is where the beneficial outcomes, financial, and non-financial are identified. Clearly a commercial service provider will be concerned with the profit of your service. Any kind of provider will need to show a degree of financial and organizational performance.

Risks and contingencies

The identification of possible alternate outcomes which might be experienced and the identification of ways of reducing the likelihood or accommodation of the outcome if it occurs.

I hope this article helps your finances,

-Robert Weiss.