Info-Tech Research Group's latest findings highlight the pressing need for refined IT financial management in today's digital-first landscape. As organizations navigate through periods of potential economic uncertainty, precise budgeting and spending have become paramount. The firm's newly published blueprint offers crucial insights and strategies to enhance financial clarity, optimize resource allocation, and align IT expenditure with strategic business goals.

TORONTO, May 2, 2024 /PRNewswire/ - As digital-first strategies have become increasingly essential for organizations to compete, an emphasis on refined IT financial management has also become vital. Precise IT budgeting and spending are critical in the current economy, especially in periods of market uncertainty and fluctuation. Info-Tech Research Group's latest research, Develop a Fit-for-Purpose IT Financial Taxonomy, offers IT leaders practical tools to enhance financial clarity, optimize resource allocation, and align IT expenditure with strategic business goals. This blueprint outlines a structured approach to categorizing IT expenditures that supports strategic business objectives, enabling enhanced financial management and insightful decision-making in today's digital economy.

"If IT needs to defend IT expenditures, forecast future costs, demonstrate value, and have any credibility with the CFO and other senior managers, it must not only understand the finances but also have the right tools to analyze, report on, and explain those finances," says Jennifer Perrier, principal research director at Info-Tech Research Group. "This starts with having access to good quality and usable data and information about technology costs and expenditures and, most importantly, knowing what that data actually means."

Info-Tech's latest research identifies three main issues contributing to inadequate IT financial data:

1. Poor data reliability
2. Poor data usability
3. Poor data availability

"These three data problems are the root cause of many IT financial management woes," explains Perrier. "Discovering exactly what data is present and classifying it in a way that provides context, enables financial analysis, and supports effective communication are the critical first steps in improving IT financial data quality and IT financial management capability overall."

Communication challenges are further complicated by a fundamental misunderstanding between IT and finance departments, creating barriers that can hinder the effective management of shared financial data. To bridge this gap, the firm advises that leaders establish an IT cost taxonomy as an initial step. This taxonomy will classify IT's financial data, enhancing the department's ability to meet financial responsibilities and build trust in decisions based on that data.

In the blueprint, Info-Tech explains that the primary purpose of a taxonomy is to organize information by describing and representing it in a way that simplifies retrieval, understanding, and interpretation. However, implementing a new IT cost taxonomy should be approached with care, thought, and diligence to ensure that it is effective and yields the intended benefits over the long term.

Info-Tech recommends leaders take the following three steps to refine IT financial data and improve overall IT financial management (ITFM) capabilities through a robust cost taxonomy:

1. Understand what IT financial data is, where it originates, and where it lives in an organization.
2. Develop a meaningful taxonomy for classifying and organizing IT financial data.
3. Implement a meaningful taxonomy as part of the overall IT financial management program.

An established IT cost taxonomy is the cornerstone of successful communication between IT and business units, as it creates a shared vocabulary that can be leveraged and understood in every interaction within the organization. Info-Tech emphasizes the importance of developing and implementing a practical IT cost taxonomy, recognizing it as a vital step toward strategic alignment, operational efficiency, better decision-making, and financial transparency. Organizations are advised to prioritize this integration to maximize the benefits of their IT and business collaboration.

For exclusive and timely commentary from Jennifer Perrier, an expert in IT financial management, and access to the complete Develop a Fit-for-Purpose IT Financial Taxonomy blueprint, please contact pr@infotech.com.

Registration is now open for Info-Tech Research Group's annual IT conference, Info-Tech LIVE 2024, taking place September 17 to 19, 2024, at the iconic Bellagio in Las Vegas. This premier event offers journalists, podcasters, and media influencers access to exclusive content, the latest IT research and trends, and the opportunity to interview industry experts, analysts, and speakers. To apply for media passes to attend the event or gain access to research and expert insights on trending topics, please contact pr@infotech.com.

Info-Tech Research Group is one of the world's leading research and advisory firms, proudly serving over 30,000 IT and HR professionals. The company produces unbiased, highly relevant research and provides advisory services to help leaders make strategic, timely, and well-informed decisions. For nearly 30 years, Info-Tech has partnered closely with teams to provide them with everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.

To learn more about Info-Tech's divisions, visit McLean & Company for HR research and advisory services and SoftwareReviews for software buying insights.

Media professionals can register for unrestricted access to research across IT, HR, and software and hundreds of industry analysts through the firm's Media Insiders program. To gain access, contact pr@infotech.com.

For information about Info-Tech Research Group or to access the latest research, visit infotech.com and connect via LinkedIn and X.

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SOURCE Info-Tech Research Group