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What Is IT Financial Management?

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  • Written By: D. Nelson
  • Edited By: M. C. Hughes
  • Last Modified Date: 24 June 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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Information Technology (IT) describes all of the services and components of computer and telecommunication networks. Businesses that use the Internet, telephones, email, network servers, and fax machines use IT. A professional who practices IT financial management is responsible for budgeting all IT needs. His or her goal normally is to provide the most optimal services for the lowest possible cost. Many experts believe that there are three components that a professional should consider when practicing IT financial management: equipment and hardware, software, and all related labor and services.

A common goal of IT financial management is to make sure that all IT equipment is functional and that it is being used in the most cost effective manner. Many IT managers use asset management tracking systems. These systems often require managers to attach barcodes to pieces of hardware that they can scan to read the status of a piece of a equipment. A manager can use this system to schedule inspections and track location of equipment.

An IT financial management professional should also develop a system to manage software. Software describes the programs that run on computers. A successful system for financially managing software may include automatic security updates and features upgrades when manufacturers introduce new versions of software. By consistently updating software in a timely manner, a manager can reduce costs of repairs and replacements.

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IT labor is another component considered by IT financial management professionals. Managers might consider workloads and projects to determine how much labor is needed at a given time. By inspecting and updating hardware and software to avoid malfunctions, an IT manager can reduce labor and service costs. Well functioning programs can lead to reduced dependence on technicians.

The three components of IT financial management are interconnected. For example, if a manager saves money on equipment by inspecting and repairing it before it breaks down, a greater portion of a budget can be used to purchase optimal software. Likewise, when IT labor is not deployed effectively, networks may suffer more problems since they might not be monitored properly.

Professionals in the IT financial management field also compare security costs with costs associated with risk. In other words, a manager should be familiar with risks, such as viruses, security breaches, and system malfunctions so he or she can determine where a system is most vulnerable and what the impact of loss might be. A manager then should consider various security options and choose one that is effective against the greatest risks with a cost that does not require too much of a budget. When security costs are too high, an organization might lack funds to support effective IT networks.

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