The Financial Management Toolkit The Missing Financial Management Planning Process Theory and Tools Guide ITIL Compliant_5 docx

Financial Management Workbook Page 52 Financial Management Workbook Page 53 3.2 Policies, Objectives & Scope IT Services Policies, Objectives & Scope Process: Financial Management Status: In draft Under Review Sent for Approval Approved Rejected Version: <<your version>> IT Service Continuity Date: Financial Management Workbook Page 54 Policies, Objectives and Scope for Financial Management The document is not to be considered an extensive statement as its topics have to be generic enough to suit any reader for any organization. However, the reader will certainly be reminded of the key topics that have to be considered. Policy Statement A course of action, guiding principle, or procedure considered expedient, prudent, or advantageous Use this text box to answer the “SENSE OF URGENCY” question regarding this process. Why is effort being put into this process? Not simply because someone thinks it’s a good idea. That won’t do. The reason has to be based in business benefits. You must be able to concisely document the reason behind starting or improving this process. Is it because of legal requirements or competitive advantage? Perhaps the business has suffered major problems or user satisfaction ratings are at the point where outsourcing is being considered. A policy statement any bigger than this text box, may be too lengthy to read, lose the intended audience with detail, not be clearly focused on answering the WHY question for this process. The above Policy Statement was; Prepared by: On: <<date>> And accepted by: On: <<date>> Refer to Implementation Plan – Project Plan for planning and implementation guidelines (that includes the Policy, Objectives and Scope statements). Financial Management Workbook Page 55 Objectives Statement Something worked toward or striven for; a goal Use this text box to answer the “WHERE ARE WE GOING” question regarding this process. What will be the end result of this process and how will we know when we have reached the end result? Will we know because we will establish a few key metrics or measurements or will it be a more subjective decision, based on instinct? A generic sample statement on the “objective” for Financial Management is: The object of Financial Management is to provide stewardship for the cost effectiveness of the IT Services and the supporting Infrastructure in such a manner that IT Services can be budgeted for, accounted for, and charged at a fair and reasonable price. In addition to this, Financial Management will perform iterative optimization activities to ensure constant improvements and alignment. Note the keywords in the statement. For the statement on Financial Management they are “cost effective” and “budgeting, accounting and charging”. These are definite areas that we can set metrics for and therefore measure progress. An objective statement any bigger than this text box, may be too lengthy to read, lose the intended audience with detail, not be clearly focused on answering the WHERE question for this process. The above Objective Statement was; Prepared by: On: <<date>> And accepted by: On: <<date>> Refer to Objectives and Goals for detailed statement of process objectives/goals. Refer to Reports, KPIs and other Metrics for metrics, KPI’s for Financial Management. Financial Management Workbook Page 56 Scope Statement The area covered by a given activity or subject The above Scope Statement was; Prepared by: On: <<date>> And accepted by: On: <<date>> Use this text box to answer the “WHAT” question regarding this process. What are the boundaries for this process? What does the information flow look like into this process and from this process to other processes and functional areas? A generic sample statement on the “scope” for Financial Management is: The Financial Management process will be responsible for budgeting, accounting and charging involving the following aspects of the IT Infrastructure: • Hardware • Software • System Software • Etc Financial Management will not be responsible for those components that exist under the banner of Applications Development. An scope statement any bigger than this text box, may be too lengthy to read, lose the intended audience with detail, not be clearly focused on answering the WHAT question for this process. Financial Management Workbook Page 57 3.3 Communication Plan IT Services Communication Plan Process: Financial Management Status: In draft Under Review Sent for Approval Approved Rejected Version: <<your version>> IT Service Continuity Date: Financial Management Workbook Page 58 Communication Plan for Financial Management The document is not to be considered an extensive statement as its topics have to be generic enough to suit any reader for any organization. However, the reader will certainly be reminded of the key topics that have to be considered. This document serves as a GUIDE FOR COMMUNICATIONS REQUIRED for the Financial Management process. This document provides a basis for completion within your own organization. This document contains suggestions regarding information to share with others. The document is deliberately concise and broken into communication modules. This will allow the reader to pick and choose information for e-mails, flyers, etc. from one or more modules if and when appropriate. This document was; Prepared by: On: <<date>> And accepted by: On: <<date>> Financial Management Workbook Page 59 Initial Communication Sell the Benefits First steps in communication require the need to answer the question that most people (quite rightly) ask when the IT department suggests a new system, a new way of working. WHY? It is here that we need to promote and sell the benefits. However, be cautious of using generic words. Generic Benefit statements Specific Organizational example Improved Customer Service This is important because… Reduction in the number of Incidents In recent times our incidents within IT have… Provides quicker resolution of Incidents Apart from the obvious benefits, the IT department in recent times has… Improved Organizational learning A recent example of … saw the individual and others in the company start to… The above Communication module (or elements of) was/were distributed; To: On: <<date>> By: On: <<date>> Financial Management Workbook Page 60 Financial Management Goal The Goal of Financial Management The Goal of Financial Management can be promoted in the following manner. Official Goal Statement: To provide cost effective stewardship of the IT Assets through a Financial Management process, providing budgeting, accounting and charging policies. • High visibility and wide channels of communication are essential in this process. Gather specific Financial Requirements from nominated personnel (Special Tip: Beware of using only Managers to gain information from, as the resistance factor will be high) • Oversee the monitoring of process to ensure that the business needs of IT are not impacted, but taking into account that changes are required to ensure continued high levels of IT Service Delivery and Support. • Provide relevant reports to nominated personnel. (Special Tip: Beware of reporting only to Managers. If you speak to a lot of people regarding Service Support and Delivery then you need to establish ways to report to these people the outcomes and progress of the discussions). Always bear in mind the “so what” factor when discussing areas like goals and objectives. If you cannot honestly and sensibly answer the question “so what” – then you are not selling the message in a way that is personal to the listener and gets their “buy- in”. The above Financial Management Goals module was distributed; To: On: <<date>> By: On: <<date>> Financial Management Workbook Page 61 Financial Management Activities Intrusive & Hidden Activities Information regarding activities was distributed; To: On: <<date>> By: On: <<date>> The list of actions in this module will have a direct impact on end users and IT Staff. They will be curious as to why working with them in this manner, rather than the historical method of just “doing it”. There could be an element of suspicion and resistance, so consider different strategies to overcome this initial skepticism. 1. Business Availability Requirements • Interview and record the needs from the Business • Capture any critical areas • Create Financial Management criteria based on the requirements 2. Budgeting • Perform an assessment of the critical services from a cost perspective • Put in place communication guidelines for distributing the budget • Create the IT Budget. Allow accurate scope for predicting costs for the coming year 3. Accounting • Create a cost model • Setup measurements for the cost model based on Service and delivery areas • Communicate the cost model 4. Charging • Correct categorization of cost types, elements and units is essential to determine the right level of charging • Communicate methods for charging for the IT Services • Provide a simple, fair and realistic charging policy for IT Services 5. Reporting • Set appropriate Service Level Achievements • Agree through Service Level Management the SLA’s for Financial Management • Communicate to IT Staff the reason and benefits • Communicate to business staff the reasons and benefits [...]... the cost of Financial Management were distributed; To: On: By: On: Page 62 Financial Management Workbook 3.4 Financial Management Process Manager IT Services Roles and Responsibilities Process: Financial Management Status: Version: 0.1 Release Date: Page 63 Financial Management Workbook Detailed responsibilities of the Financial Management process owner The Financial Manager… Description... customers and end-users need to be constantly informed of the activities and services being provided through Financial Management This provides good customer service and adds a level of comfort to the users in the sense that they can “see” action taking place A well run Financial Management process will make major inroads into altering the perception of the IT Organization Details regarding the cost of Financial. .. representatives of the organization management and the Finance Department, to develop the policies of Budgeting, IT Accounting and Charging Will implement and maintain the IT Financial Management Process, covering Budgeting, IT Accounting and Charging 3 Will assist in developing account plans and investment cases for the IT organization and its Customers 4 Must be capable of managing the IT organization... (Set-up and ongoing) • Software – Tools (Set-up and ongoing) • Hardware – Infrastructure (Set-up) • Education – Training (Set-up and ongoing) • Procedures – external consultants etc (Set-up) The costs of implementing Financial Management will be outweighed by the benefits For example, many organizations have a negative perception of the Financial Management process as it seems to constantly measure the. . .Financial Management Workbook Financial Management Planning Costs Information relating to costs may be a topic that would be held back from general communication Failure to convince people of the benefits will mean total rejection of associate costs If required, costs fall under several categories: • Personnel – Financial Management staff, database management team (Set-up and ongoing of the availability... role, then you can check yourself against the list (with ticks or look to update your resume) Will provide guidance for the development of suitable cost models 9 Notes/Comments Will provide close support to Service Level Management, Capacity Management and Business relationship Management, especially during budget and If you are looking to appoint a process manager or promote someone from within the. .. Customers 4 Must be capable of managing the IT organization budget 5 Will prepare budget forecasts and assist Customers in preparing IT elements of their budgets 6 Will be requires to report regularly to IT managers and Customers on conformance to budgets 7 Should select suitable tools and processes for gathering Cost data 8 Will seek agreement for suitable IT Accounting policies, e.g Depreciation 10... senior management on the costeffectiveness of IT solutions 12 Will identify methods of charging within the organizations charging policy 13 Will provide justifications and comparisons for charges 14 Will ensure that regular bills are prepared for Customers 15 Will prepare a price list of Services, if required 16 Use the notes/Comments column in different ways If you are looking to apply for a process. .. Management and Business relationship Management, especially during budget and If you are looking to appoint a process manager or promote someone from within the organization you can make notes about their abilities in the particular area Page 64 . <<date>> Financial Management Workbook Page 60 Financial Management Goal The Goal of Financial Management The Goal of Financial Management can be promoted in the following. the boundaries for this process? What does the information flow look like into this process and from this process to other processes and functional areas? A generic sample statement on the. sample statement on the “objective” for Financial Management is: The object of Financial Management is to provide stewardship for the cost effectiveness of the IT Services and the supporting