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Achieve IT Spend & Staffing Transparency

Lay a foundation for meaningful conversations with the business.

  • IT spend has increased in volume and complexity, but how IT spend decisions are made has not kept pace.
  • In most organizations, technology has evolved faster than the business’ understanding of what it is, how it works, and what it can do for them.
  • How traditional financial accounting methods are applied to IT expenditure don’t align well to modern IT realities.
  • IT is often directed to make cuts when cost optimization and targeted investment are what’s really needed to sustain and grow the organization in the long term.

Our Advice

Critical Insight

  • Meaningful conversations about IT spend don’t happen nearly as frequently as they should. When they do happen, they are often inhibited by a lack of IT financial management (ITFM) maturity combined with the absence of a shared vocabulary between IT, the CFO, and other business function leaders.
  • Supporting data about actual technology spend taking place that would inform decision making is often scattered and incomplete.
  • Creating transparency in your IT financial data is essential to powering collaborative and informed technology spend decisions.

Impact and Result

  • Understand the uses and benefits of making your IT spend more transparent.
  • Discover and organize your IT financial data.
  • Map your organization’s total technology spend against four IT stakeholder views: CFO, CIO, CXO, and CEO.
  • Gain vocabulary and facts that will help you tell the true story of IT spend.

Members may also be interested in Info-Tech's IT Spend & Staffing Benchmarking Service.

Achieve IT Spend & Staffing Transparency Research & Tools

1. Achieve IT Spend & Staffing Transparency Deck – A detailed, do-it-yourself framework and process for clearly mapping your organization’s total technology spend.

This deck mirrors Info-Tech’s own internal methods for delivering its IT Spend & Staffing Benchmarking Service in a do-it-yourself format. Based on Info-Tech’s proven ITFM Cost Model, it includes an IT spend mapping readiness assessment, expert advice for sourcing and organizing your financial data, a methodology for mapping IT staff and vendor spend according to four key stakeholder views (CFO, CIO, CXO, and CEO), and guidance on how to analyze and share your results.

Achieve IT Spend & Staffing Transparency Storyboard

2. IT Spend & Staffing Transparency Workbook – A structured Excel tool that allows you to allocate your IT spend across four key stakeholder views and generate high-impact visualizations.

This workbook offers a step-by-step approach for mapping and visualizing your organization’s true IT spend.

IT Spend & Staffing Transparency Workbook

3. IT Spend & Staffing Transparency Executive Presentation Template – A PowerPoint template that helps you summarize and showcase key results from your IT spend transparency exercise.

This presentation template offers a recommended structure for introducing key executive stakeholders to your organization’s true IT spending behavior and IT financial management as a whole.

IT Spend & Staffing Transparency Executive Presentation Template

Achieve IT Spend & Staffing Transparency

Lay a foundation for meaningful conversations with the business.

Analyst Perspective

Take the first step in your IT spend journey.

Talking about money is hard. Talking to the CEO, CFO, and other business leaders about money is even harder, especially if IT is seen as just a cost center, is not understood by stakeholders, or is simply taken for granted. In times of economic hardship, already lean IT operations are tasked with becoming even leaner.

When there's little fat to trim, making IT spend decisions without understanding the spend's origin, location, extent, and purpose can lead to mistakes that weaken, not strengthen, the organization.

The first step in optimizing IT spend decisions is setting a baseline. This means having a comprehensive and transparent view of all technology spend, organization-wide. This baseline is the only way to have meaningful, data-driven conversations with stakeholders and approvers around what IT delivers to the business and the implications of making changes to IT funding.

Before stepping forward in your IT financial management journey, know exactly where you're standing today.

Jennifer Perrier, Principal Research Director, ITFM Practice

Jennifer Perrier
Principal Research Director, ITFM Practice
Info-Tech Research Group

Executive Summary

Your Challenge Common Obstacles Info-Tech's Approach
IT spend has increased in volume and complexity, but how IT spend decisions are made has not kept pace:
  • Technology has evolved faster than the business' understanding of what it is, how it works, and what it can do for them.
  • How traditional financial accounting methods are applied doesn't align well to modern IT realities.
  • IT is directed to make cuts when cost optimization and targeted investment are what's really needed to sustain and grow the organization in the long-term.
Meaningful conversations about IT spend don't happen nearly as much as they should. This is often due to:
  • A lack of maturity in how ITFM (IT financial management) is executed within IT and across the organization as a whole.
  • The absence of a shared vocabulary between IT, the CFO, and other business function leaders.
  • Scattered and incomplete data about the actual technology spend taking place in the organization.
Lay a foundation for meaningful conversations and informed decision-making around IT spend.
  • Understand the uses and benefits of making your IT spend more transparent.
  • Discover and organize your IT financial data.
  • Map your organization's total technology spend against four IT stakeholder views: CFO, CIO, CXO, and CEO.
  • Gain both vocabulary and facts that will help you tell the true story of IT spend.

Info-Tech Insight
Create transparency in your IT financial data to power both collaborative and informed technology spend decisions.

IT spend has grown alongside IT complexity

IT spend has grown alongside IT complexity

Growth creates change ... and challenges

IT has become more integral to business operations and achievement of strategic goals, driving complexity in how IT funds are allocated and managed.

How IT funds are spent has changed
Value demonstration is two-pronged. The first is return on performance investment, focused on formal and objective goals, metrics, and KPIs. The second is stakeholder satisfaction, a more subjective measure driven by IT-business alignment and relationship. IT leaders must do both well to prove and promote IT's value. 		Funding decision cadence has sped up
Many organizations have moved from three- to five-year strategic planning cycles to one-year planning horizons or less, most noticeably since the 2008/2009 recession. Not only has the pace of technological change accelerated, but so too has volatility in the broader business and economic environments, forcing rapid response. 		Justification rigor around IT spend has increased
The need for formal business cases, proposals, and participation in formal governance processes has increased, as has demand for financial transparency. With many IT departments still reporting into the CFO, there's no getting around it - today's IT leaders need to possess financial management savvy. 		Clearly showing business value has become priority
IT spend has moved from the purchase of discrete hardware and software tools traditionally associated with IT to the need to address larger-scale issues around interoperability, integration, and virtualized cloud solutions. Today's focus is more on big-picture architecture than on day-to-day operations.

ITFM capabilities haven't grown with IT spend

IT still needs to prove itself.

Increased integration with the core business has made it a priority for the head of IT to be well-versed in business language and practice, specifically in the areas of measurement and financial management.

However, IT staff across all industries aren't very confident in how well IT is doing in managing its finances via three core processes:

  • Accounting of costs and budgets.
  • Optimizing costs to gain the best return on investment.
  • Demonstrating IT's value to the business.

Recent data from 4,137 respondents to Info-Tech's IT Management & Governance Diagnostic shows that while most IT staff feel that these three financial management processes are important, notably fewer feel that IT management is effective at executing them.

IT leadership's capabilities around fundamental cost data capture appear to be lagging, not to mention the essential value-added capabilities around optimizing costs and showing how IT contributes to business value.

Graph of Cost and Budget Management

Graph of Cost Optimization

Questions for support transition

Source: IT Management & Governance Diagnostic, Info-Tech Research Group, 2022.

Take the perspective of key IT stakeholders as a first step in ITFM capability improvement

Other business unit leaders need to deliver on their own specific and unique accountabilities. Create true IT spend transparency by accounting for these multiple perspectives.

Exactly how is IT spending all that money we give them?
Many IT costs, like back-end infrastructure and apps maintenance, can be invisible to the business.

Why doesn't my department get more support from IT?
Some business needs won't align with spend priorities, while others seem to take more than their fair share.

Does the amount we spend on each IT service make sense?
IT will get little done or fall short of meeting service level requirements without appropriate funding.

I know what IT costs us, but what is it really worth?
Questions about value arise as IT investment and spend increase. How to answer these questions is critical.

At the end of the day, telling IT's spend story to the business is a significant challenge if you don't understand your audience, have a shared vocabulary, or use a repeatable framework.

Mapping your IT spend against a reusable framework helps generate transparency

A framework makes transparency possible by simplifying methods, creating common language, and reducing noise.

However, the best methodological framework won't work if the materials and information plugged into it are weak. With IT spend, the materials and information are your staff and your vendor financial data. To achieve true transparency, inputs must have the following three characteristics:

Availability Reliability Usability
The data and information are up-to-date and accessible when needed. The data and information are accurate, complete, and verifiable. The data and information are clearly defined, consistently and predictably organized, consumable, and meaningful for decision-making.

A framework is an organizing principle. When it comes to better understanding your IT spend, the things being organized by a framework are your method and your data.

If your IT spend information is transparent, you have an excellent foundation for having the right conversations with the right people in order to make strategically impactful decisions.

Info-Tech's approach enables meaningful dialogue with stakeholders about IT spend

View of meaningful dialogue with stakeholders about IT spend

Investing time in preparing and mapping your IT spend data enables better IT governance

While other IT spend transparency methods exist, Info-Tech's is designed to be straightforward and tactical.

Info-Tech method for IT spend transparency

Put your data to work instead of being put to work by your data.

Introducing Info-Tech's methodology for creating transparency on technology spend

1. Know your objectives 2. Gather required data 3. Map your IT staff spend 4. Map your IT vendor spend 5. Identify implications for IT
Phase Steps
  1. Review your business context
  2. Set IT staff and vendor spend transparency objectives
  3. Assess effort and readiness
  1. Collect IT staff spend data
  2. Collect IT vendor spend data
  3. Define industry-specific CXO Business View categories
  1. Categorize IT staff spend in each of the four views
  2. Validate
  1. Categorize IT vendor spend in each of the four views
  2. Validate
  1. Analyze your findings
  2. Craft your key messages
  3. Create an executive presentation
Phase Outcomes Goals and scope for your IT spend and staffing transparency effort. Information and data required to perform the IT staff and vendor spend transparency initiative. A mapping of the allocation of IT staff spend across the four views of the Info-Tech ITFM Cost Model. A mapping of the allocation of IT vendor spend across the four views of the Info-Tech ITFM Cost Model. An analysis of your results and a presentation to aid your communication of findings with stakeholders.

Insight Summary

Overarching insight
Take the perspective of key stakeholders and lay out your organization's complete IT spend footprint in terms they understand to enable meaningful conversations and start evolving your IT financial management capability.

Phase 1 insight
Your IT spend transparency efforts are only useful if you actually do something with the outcomes of those efforts. Be clear about where you want your IT transparency journey to take you.

Phase 2 insight
Your IT spend transparency efforts are only as good as the quality of your inputs. Take the time to properly source, clean, and organize your data.

Phase 3 insight
Map your IT staff spend data first. It involves work but is relatively straightforward. Practice your mapping approach here and carry forward your lessons learned.

Phase 4 insight
The importance of good, usable data will become apparent when mapping your IT vendor spend. Apply consistent and meaningful vendor labels to enable true aggregation and insight.

Phase 5 insight
Communicating your final IT spend transparency mapping with executive stakeholders is your opportunity to debut IT financial management as not just an IT issue but an organization-wide concern.

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals.

Use this tool in Phases 1-4

IT Spend & Staffing Transparency Workbook

Input your IT staff and vendor spend data to generate visual outputs for analysis and presentation in your communications.

Key deliverable:

IT Spend & Staffing Transparency Executive Presentation

Create a showcase for your newly-transparent IT staff and vendor spend data and present it to key business stakeholders.

Use this tool in Phase 5

IT and business blueprint benefits

IT Benefits Business Benefits
  • Gain insight into exactly where you're spending IT funds on hardware, software, service providers, and the workforce.
  • Understand how much it's costing IT to deliver specific IT services.
  • Illustrate differences in business consumption of IT spend.
  • Learn the ratio of spend allocated to innovation vs. growth vs. keeping the lights on (KTLO).
  • Develop a series of core IT spend metrics including IT spend as a percent of revenue, IT spend per organization employee, and IT spend per IT staff member.
  • Create a complete IT spend baseline to serve as a foundation for future benchmarking, cost optimization, and other forms of IT financial analysis.
  • Understand the relative allocation of IT spend across capital vs. operational expenditure.
  • See the degree to which IT differentially supports and enables organizational goals, strategies, and functions.
  • Have better data for informing the organization's IT spend allocation and prioritization decisions.
  • Gain better visibility into real-life IT spending behaviors, cadences, and patterns.
  • Identify potential areas of spend waste as well as underinvestment.
  • Understand the true value that IT brings to the business.

Measure the value of this blueprint

You will know that your IT spend and staffing transparency effort is succeeding when:

  • Your understanding of where technology funds are really being allocated is comprehensive.
  • You're having active and meaningful dialogue with key stakeholders about IT spend issues.
  • IT spend transparency is a permanent part of your IT financial management toolkit.

In phase 1 of this blueprint, we will help you identify initiatives where you can leverage the outcomes of your IT spend and staffing transparency effort.

In phases 2, 3, and 4, we will guide you through the process of mapping your IT staff and vendor spend data so you can generate your own IT spend metrics based on reliable sources and verifiable facts.

Win #1: Knowing how to reliably source the financial data you need to make decisions.

Win #2: Getting your IT spend data in an organized format that you can actually analyze.

Win #3: Having a framework that puts IT spend in a language stakeholders understand.

Win #4: Gaining a practical starting point to mature ITFM practices like cost optimization.

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit Guided Implementation Workshop Consulting
"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful." "Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track." "We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place." "Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."

Diagnostics and consistent frameworks are used throughout all four options.

Guided Implementation

Info-Tech recommends the following calls in your Guided Implementation.

Phase 1: Know your objectives Phase 2: Gather required data Phase 3: Map your IT staff spend Phase 4: Map your IT vendor spend Phase 5: Identify implications for IT
Call #1: Discuss your IT spend and staffing transparency objectives and readiness. Call #2: Review spend and staffing data sources and identify data organization and cleanup needs. Call #3: Review your mapped IT staff spend and resolve lingering challenges. Call #4: Review your mapped IT vendor spend and resolve lingering challenges. Call #5: Analyze your mapping outputs for opportunities and devise next steps.

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI is between four to six calls over the course of two to three months.

Want even more help with your IT spend transparency effort?

Let us fast-track your IT spend journey.

The path to IT financial management maturity starts with knowing exactly where your money is going. To streamline this effort, Info-Tech offers an IT Spend & Staffing Benchmarking service that provides full transparency into where your money is going without any heavy lifting on your part.

This unique service features:

  • A client-proven approach to meet your IT spend transparency goals.
  • Vendor and staff spend mapping that reveals business consumption of IT.
  • Industry benchmarking to compare your spending and staffing to that of your peers.
  • Results in a fraction of the time with much less effort than going it alone.
  • Expert review of results and ongoing discussions with Info-Tech analysts.

If you'd like Info-Tech to pave the way to IT spend transparency, contact your account manager for more information - we're happy to talk anytime.

Phase 1

Know Your Objectives

This phase will walk you through the following activities:

  • Establish IT spend and staffing transparency uses and objectives
  • Assess your readiness to tackle IT spend and staffing transparency

This phase involves the following participants:

  • Head of IT
  • IT financial lead
  • Other members of IT management

Phase 1: Know your objectives

Envision what transparency can do.

You're at the very beginning of your IT spend transparency journey. In this phase you will:

  • Set your objectives for making your IT spend and staffing transparent.
  • Assess your readiness to tackle the exercise and gauge how much work you'll need to do in order to do it well.

"I've heard this a lot lately from clients: 'I've got my hands on this data, but it's not structured in a way that will allow me to make any decisions about it. I have these journal entries and they have some accounting codes, GL descriptors, cost objects, and some vendors, but it's not enough detail to make any decisions about my services, my applications, my asset spend.'"
- Angie Reynolds, Principal Research Director, ITFM Practice, Info-Tech Research Group

Achieve IT Spend & Staffing Transparency visualization

Lay a foundation for meaningful conversations with the business.

About Info-Tech

Info-Tech Research Group is the world’s fastest-growing information technology research and advisory company, proudly serving over 30,000 IT professionals.

We produce unbiased and highly relevant research to help CIOs and IT leaders make strategic, timely, and well-informed decisions. We partner closely with IT teams to provide everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.

What Is a Blueprint?

A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your IT problems.

Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.

Need Extra Help?
Speak With An Analyst

Get the help you need in this 5-phase advisory process. You'll receive 5 touchpoints with our researchers, all included in your membership.

Guided Implementation 1: Know your objectives
  • Call 1: Discuss your IT spend and staffing transparency objectives and readiness.

Guided Implementation 2: Gather required data
  • Call 1: Review spend and staffing data sources and identify data organization and cleanup needs.

Guided Implementation 3: Map your IT staff spend
  • Call 1: Review your mapped IT staff spend and resolve lingering challenges.

Guided Implementation 4: Map your IT vendor spend
  • Call 1: Review your mapped IT vendor spend and resolve lingering challenges.

Guided Implementation 5: Identify implications for IT
  • Call 1: Analyze your mapping outputs for opportunities and devise next steps.

Author

Jennifer Perrier

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