As organizations invest heavily in technology to enable innovation and transformation strategies, IT has evolved from being more of a support function to a key enabler of business outcomes. The ability to calculate and present the ROI of IT spend is key to further investment. However, many companies still struggle to articulate the value that IT is delivering to the business.
The 2025 Gartner CIO Digital Leadership study backs this up, saying, “When the strategic contribution of IT is unclear to stakeholders, CIOs frequently encounter resistance to the IT strategy and its associated investment requirements.”
To bridge the chasm between business value and IT strategy, many companies are turning to IT Financial Management (ITFM). ITFM is the practice of analyzing, planning, and optimizing the costs of IT to ensure financial transparency, align IT spending with business goals, and share the value of IT to the business and executives.
Companies trying to manage IT spend without the proper tools and frameworks face many challenges, but two big ones stand out.
First, most teams are still working with manual and rigid processes. Using multiple spreadsheets on disconnected systems is fraught with errors and is slow. When decisions are based on inaccurate and outdated information, it is harder to plan with confidence and be proactive when markets change.
Second, there is an overall lack of visibility into IT spending. It is common for organizations to not have a clear picture of where money is going, how budgets are allocated, and what value IT investments are delivering. Without a concise, clear view, it is difficult to align spending with corporate goals or justify future investments in technology.
Organizations that continue with legacy approaches to managing IT spend risk accurately measuring ROI and business value, lack accountability and strategic alignment through shared cost allocation, and will view IT as a cost burden rather than a transformation engine.
ITFM platforms, like IBM Apptio, offer much more than cost tracking. While they are designed to ingest data from thousands of sources and give a company complete visibility into IT spend, they also proactively identify cost-saving opportunities, enable forecasting, and demonstrate real-time variance analysis. The IBM Apptio platform includes solutions across these four areas:
- Costing:
Proactively manage and understand IT spend, reduce waste, and align technology investments to strategic priorities.
- Planning: Create a repeatable, accurate, and collaborative process that reduces time spent on budgeting and forecasting while accelerating the frequency of plans.
- Billing: Eliminate labor-intensive manual billing and charge-back and empower business leaders to reduce consumption.
- Benchmarking:
Understand how you compare to peers, and justify and defend costs for more-informed decision making.
Companies of all sizes are actively adopting ITFM tools to optimize costs and investments. ITFM puts the right data in the hands of the right stakeholders to ensure financial transparency, align all IT spending with business objectives, and shares the value of IT with the business.
Are you interested in learning how LRS can help you adopt ITFM best practices and use Apptio to develop a proactive IT financial strategy? Please contact us to start the conversation.