Welcome to the intricate world of ITFM software and it’s own special language.

Terms like “granular”, “transparency”, “visibility”, “agile” and “defensible” all take on new meaning in the ITFM world. Understanding the terminology and becoming familiar with all the acronyms can be quite an adventure.

Here’s a glance into ITFM-101 where we can start with some of the widely used acronyms.

ITFM – Information Technology Financial Management

ITBM – Information Technology Business Management

TBM – Technology Business Management

SBM – Service Business Management

These acronyms essentially have the same purpose – to explain costs in business terms.

1. IT Financial Management, or ITFM, is the most commonly used acronym in our industry. The remaining acronyms serve to clarify what ITFM actually means.

ITFM simply refers to the financial management of IT departments. Every major organisation has particular strategic demands that drive the IT budget. From a costing perspective, these demands can be incredibly difficult to manage and explain – especially for those departments that use IT services but do not see the cost impact of their requirements. IT leaders are looking for more professional automated solutions – ClearCost IT Financial Management software is a purpose-built tool making life easier for IT Professionals.

2. The ITBM acronym – Information Technology Business Management, makes this distinction by referring to “business” rather than “financial” management of IT. Since business leaders and IT leaders often speak two different languages, establishing a direct correlation between business demands and IT spend is crucial.

When each department can clearly see how their objectives impact the overall budget, they will be held accountable for their spending. Once every department becomes aware of their particular role in the IT budget, executives can optimise their investments to make the entire organisation more agile and efficient. ITBM also illustrates the concept of “running IT like a business,” which is now a top priority for organisations in all industries.

We’ve tried to simplify the acronym even further by dropping the “I,” but “TBM” doesn’t quite capture our purpose. Plus, our methodology can be applied to services beyond IT as well, including centralised Human Resources, Finance, Property, or Legal functions that provide services back to other internal departments. We have begun using “SBM,” or Service Business Management, to emphasise the importance of service-based data to explain costs.

The sheer number of acronyms that our thought leaders use interchangeably indicates just how complex our industry really has become. Executives in management, finance, shared services, and IT all have unique challenges and objectives, and yet they often struggle to speak a common language.

As our advancements in business and technology continue to evolve, IT financial clarity is more important than ever. What languages are departments within your business speaking? Can they understand each other? If not, ClearCost’s IT Financial Management software can have everyone, from the admin team right up to your CIO & CFO aligned with a universal ITFM language in as little as 90 days.

For more information on ITFM best practices, please visit our website or contact us.