The Role of IT Finance as a Business Partner

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Author: Tony Pantaleo, Senior Product Customer Success Manager at ServiceNow

Traditionally the role of finance within IT performed three activities for the Organization.   They kept the books and processed debits and credits for items as accruals, purchase orders, invoices and capitalization. They tracked actuals and provided the organization with monthly expense reporting. And finally, finance teams were the gate keepers to the budget where they constructed and maintained a list of budget request. If unplanned expenditures were requested over the course of the year, the traditional first words mentioned by many executives were "go see finance"

Today, more and more IT Finance leaders are branding themselves, and their teams, as Finance Business Partners.   This is not just an attempt to modernize a traditional title but rather express the fundamental change in how IT Finance leaders view their responsibility to the organization. It's a shift, from a backward focused view of costs to an economic forward looking view of the cost to deliver IT Services.   To accomplish this task, IT Finance teams now use robust financial management tools that are owned and managed by IT (vs. the General Ledger which is under the jurisdiction of the Corporate Controller) and have richer insight into the operational activities within IT.   The combination of these, now enable IT Finance to Influence the delivery of IT Services more than ever.

The ability of an IT Finance Business Partner to influence, revolves around a couple of key attributes. Business Partners must be forward thinking.   It's important to know the historical results of your business but as any financial advisor will tell you "past performance is not an indicator of future results".   Business Partners appreciate how IT Services are constructed and can identify the consumers of these services.   Most importantly, IT Finance Business Partners have the ability to align business outcomes with financial results.

So what is required to transform an existing IT Finance team into Influential Business Partners……a solid foundation and a few strong pillars.

The foundation (or platform) needs to be; rock solid, leveraged by teams across the organization, a communication vehicle, an enabler to execute work and provides real time data. Once established, it provides a base for the team's transformation.

There are four critical actions necessary to build and support an influential IT finance team.

1. Develop a single source for all Global IT business information.   This is comprised of financial and operational data such as; projects, services offered (i.e., service catalog), assets under management (both HW/SW), vendor information, financial, incident and problem management case history.
2. Provide timely and relevant information to support Business decisions.   Move past the traditional month end actual vs. budget expense reports. Provide insight into; who across the organization is consuming IT, what Services are being consumed, how IT spending is (or isn't) in alignment with the overall strategic goals of the enterprise, and how are investments in IT adding velocity to the enterprise.
3. Mature the team's ability to interpret information.   Most IT Finance teams acquire individuals from other areas of finance with strong backgrounds in GAAP.   While traditional finance activities must be maintained it will not influence IT operational teams.   Finance teams need to understand how the factory of IT operates.   I'm not suggesting that IT Finance has to send financial analyst to C++ training but they do have to understand the various levers for each area of the IT factory.   For example, the levers that drive storage cost are vastly different than those that drive network cost.
4. Establish a track record of providing robust decision support analytics throughout the complete IT Finance lifecycle.   It starts with providing cost visibility into management expense reporting (also know as cost center reporting), cost visibility into IT Business Services and cost visibility into IT Shared Services.   Once there is visibility into the present, then the team can provide insight into the future and the economic impact of change.   The future state is captured during the planning & forecasting cycles and analyzed on a monthly basis to monitor performance.   As analysis is refined over the course of the year, it provides awareness to undercover optimization opportunities by exposing inefficiencies or mismatches in supply and/or demand.

The transformation from Finance team to Business Partner hinges on the ability to provide financial insight that is aligned to the business outcomes IT provides.   Having dedicated financial management software that is integrated into an enterprise platform is a force multiplier and can accelerate your teams journey.

To learn more about IT Financial Management and view a video on how AmerisourceBergen gained financial visibility with ServiceNow, visit:

Financial Management | IT Financial Management | ServiceNow