Cost Management and Financial Management plugins - what's the difference?

michaelcassidy · ‎01-22-2019

I can see both of these plugins in the product documentation, but I can't seem to find any info about which plugin/product is most appropriate for various use cases. Or do they work together?

I'm curious about:

Subscription costs - seems like Cost Management is free with standard ITSM... but Financial Management requires ITBM licensing?
History & purpose - what came first? Is one designed to replace the other? Eg Cost Management replaced by Financial Management within ITBM? What are the major differences or limitations of each product?
Can a customer begin using Cost Management, then migrate to Financial Management if required? Looks like they both make reference to Expense Lines.

We're in early days of considering using ServiceNow for IT cost reporting & chargebacks/showbacks and looking for advice on plugins related to achieve that.

Thanks!

Sunil B N · ‎01-22-2019

Hi Michael,

Licensing: Cost Management and Financial Management work together. Cost management is free with Platform. The Financial Management Core (com.snc.financial_management) plugin requires a separate subscription from the rest of the Now Platform.

History & Purpose: Cost management helps to track associated to CI(configuration items) and create related expense lines and allocations to Business Units and cost centres. Financial Management includes Financial modelling(formerly known as Cost transparency) which provides fiscal periods, allocation engine, workbench and reports and dashboards. It also includes Financial Charging(formerly known as Service Charging/ Showback) which helps in reporting the financial aspects of a business service to the various stakeholders in the organization that consume this service.

Plugin Detail: Financial Management Core (com.snc.financial_management) plugin activates the following applications:

Financial Modeling: Activates Financial Modeling application, formerly known as Cost Transparency.
Financial Charging (com.snc.service_charging): Activates the showback and service charging features of Financial Charging application, formerly known as Financial Reporting.
Cost management

Read more here.

For chargeback/showback Financial Charging Plugin is something you may be interested in.

I hope I was able to give some glimpse on what you are looking for.

Best Regards,
Sunil B N

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Sunil B N · ‎05-14-2020

Hi Soren
Apologies that I had not been to reply for this. I can only comment on what can be used for which purpose.

Cost allocation/Cost Models - To understand the cost allocation across the segments you define(could be business units/departments/cost centres and so on)

Chargeback/ Showback statement/ Financial Statement - Tracks the costs of IT hardware, software, cloud services, or any shared services that are used by a business unit.

The costs are then consolidated and presented to the business unit, as a reporting invoice (showback statements), to show the quantum of services and products they have consumed over a fiscal period.

Rate cards - Helps to generate actual expense lines. There are different rate cards. CI rate cards, Labour rate cards & Task rate cards.

Best Regards,
Sunil B N

Andrea42 · ‎03-01-2020

Hi Sunil

I'm trying to setting the Cost Management and Financial Management in my instance.

I start with CM but I have some problem.

I created the budget
I created the cost centre

I have some expensives line for CI and Asset, now which is the next steps? how setting the automatic allocation in the cost centre Can you help to understand?

thanks

Sunil B N · ‎03-01-2020

Hi Andrea,

This may help you:

https://docs.servicenow.com/bundle/newyork-it-business-management/page/product/cost-management/conce...

With respect to Financial Management, the set up will be little bit different.
You can read about it here more: https://docs.servicenow.com/bundle/newyork-it-business-management/page/product/it-finance/concept/co...

Cheers,
Sunil B N

Sanjiv Sachdev · ‎05-15-2020

Hi,

There are many IT Financial Management (ITFM) solutions out there which enable financial modelling and cost transparency. These solutions use operational data e.g. CMDB, FTE and financial data. Cost modelling tools enable an organisation to determine the cost of running their IT services e.g. email or Salesforce and look to calculate the Total Cost of Ownership (TCO) of a service. The TCO is the fully loaded cost of a service and includes labour, hardware, software etc.

I have implemented a number of ITFM solutions and happy to discuss further the difference between IT Financial Management (ITFM) and cost modelling vs. project financials.

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