Purpose: to support the organization’s strategies and plans for service management by ensuring that the organization’s financial resources and investments are being used effectively
Main characteristics:
Does not make funding decision, prioritizing investments, distributing profits (strategy management, risk management, portfolio management)
Roles in SFM (hard to find right capability):
Overcome by:
1. Practice success factors (PSF)
Two PSFs for SFM:
1.1 SFM supports overall strategy
SFM has the purpose of improving the quality of decision making with reliable and accurate financial information about products and services: must have a defined approach to the identification of costs and detail needed in budgeting and pricing
SFM is an overhead: must balance the cost of the practice to the benefit received (use the guiding principles to ensure SFM provides the necessary benefits)
Application to the service financial management practice | |
Focus on value | Start by identifying stakeholders and their needs. Do not spend resources on features that do not bring any benefits |
Start where you are | Analyze currently available information, tools, and procedures. Consider optimizing and integrating them before investing resources in a new solution |
Progress iteratively with feedback | Expand the scope and details of the practice iteratively, with regular and careful consideration of the feedback. The practice has many interconnected parts (for example, budgeting depends on the cost model), so ensure that the first iterations are good enough to continue |
Collaborate and promote visibility | The quality of the cost data depends on the understanding and readiness to cooperate across the organization. Explain, promote, and engage people to ensure that cost data is accurate, timely, and relevant. Demonstrate the benefits of good service financial management to the stakeholders |
Think and work holistically | Ensure a holistic understanding of the costs of products and services, considering all types of resources and costs. Do not limit cost and budget models to the data that is easy to get and allocate. At the same time, do not overcomplicate the models |
Keep it simple and practical | The practice and its models and reports should be as simple and practical as possible. Verify this with the stakeholders; ensure there is no unnecessary data in the reports. Reports should be tailored for the needs of the decision-makers |
Optimize and automate | Optimize resource-consuming procedures, especially the collection and processing of cost data (particularly related to people’s costs). Where reasonable, automate data collection, processing, and reporting |
1.2 Financial information is available
SFM is a subset of organizational financial management, don’t solely focus on compliance and control. SFM primary focus is the provision of reliable financial information to stakeholders
SFM tightly related to practices that provide management information:
SFM inform management decision to:
Go back to ITIL 4 Strategic Leader Certification Course: Practices to finish this chapter or to the main page ITIL 4 Strategic Leader Certification Course.
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