Budgeting

    Arm IT for The Next Budget Meeting with the True Cost of Service Delivery

    October 29, 2015
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    By Wyndham Sellers

    Big data and detailed reporting are giving finance departments the tools to make supremely accurate budget forecasts. Is your IT team prepared to run the gauntlet?

    For small and midmarket companies, budget forecasting season is upon us, although larger companies have been at it since August or even earlier. Fortune 500 giants and startups alike are guarding their coffers with renewed vigor this year, especially in light of drastic FP&A missteps made by firms like Caterpillar and J.P. Morgan, per Reuters and the Wall Street Journal.

    Implementing a driver-based forecasting model can help companies stay ahead of market shifts and prioritize long-term business goals. By forcing a department to start from zero and justify every expense on the balance sheet, finance teams can identify drivers as well as ancillary and unneeded costs.

    This system poses challenges for IT departments nonetheless, but it also affords them the ability to stay ahead of the game by identifying and delivering their true cost of service.

    Easier Said Than Done

    One of the largest hurdles for IT departments wresting with a driver-based model is the fact that most of their business involvement is indirect. It’s quite difficult to determine the real cost of each employee’s network usage or the labor cost of helpdesk tickets, which untangle issues for workers across an organization.

    As a result of these nebulous costs, IT departments too often portray the role of spoiler in budgetary discussions. Ideally, the driver-based system eliminates the guesswork from budget planning and forecasting, provided that both IT and finance have easy access to the resources that inform those drivers. But short of sound and complete information, the spoiler label persists.

    The fuel for a robust forecasting system is data. As such, reports on usage, purchasing, variables, and anything else need to be accessible at all times to adjust a running forecast. In years past, IT has been throttled by the technology made available to them. In the present, they’re limited only by the extent to which they utilize the tech at their disposal, according to Internet Magazine.

    The More You Know

    The more data your IT department can utilize, the more they can justify costs in the face of ever-tightening budgets. Customized tools can make crucial data more accessible  Deloitte explains that implementing an integrated platform is the best way to build a successful pipeline into a cost reporting system.

    More and more software firms offer advanced tools that allow IT to deliver cost of service effectively. Yet, few can build proprietary tools from the ground up, tailor them to your business, give them the requisite horsepower, and deliver information that is both convincing to a finance team and aligned with business objectives.

    TeamQuest consistently builds the best integrated tools in the market, and the list of satisfied customers keeps getting longer. Our IT solutions insulate against unforeseen challenges, maximize ROI, and arm your IT team to deliver the clearest cost of service at the annual budget sitdown  all while remaining agile in the face of volatile market conditions.

    (Main image credit: BBC World Service/flickr)


    Category: finance