Implement an Adaptive System for IT Financial Management

Drive an Exponential IT future for technology spend and investment.

Analyst perspective

To be truly agile, you need a well-designed and rock-solid foundation that everyone can rely on.

The most elegant things in life are never simple behind the scenes – they’re often carefully and thoughtfully designed to be that way, and just as often have evolved from some pretty clunky and awkward predecessors. The same can be said of your approach to IT financial management.

The way IT financial management is commonly practiced in many organizations is ad hoc and opaque, leaving IT and other decision-makers unable to quickly and appropriately respond to changing conditions and emerging opportunities. To keep pace with a highly dynamic future that Info-Tech calls Exponential IT, most organizations will need to reinvent their approach to IT financial management so that it can operate with agility and confidence.

Enabling your organization for this future means recrafting the system of IT financial management to be responsive and adaptable, and bringing all financial process owners and their interests together to collaboratively evolve financial management practice organization-wide. Start your Exponential IT journey now.

Jennifer Perrier Principal Research Director, CIO Practice Info-Tech Research Group

Executive summary

Your Challenge

• IT leaders need to be able to respond quickly to changes in the technology landscape and accelerate realization of organizational strategies.
• Unfortunately, most finance and procurement functions within IT and across the organization as a whole are not capable of being executed with the confidence or agility needed to get and stay ahead of emerging opportunities.
• Not only are opportunities being missed, but waste and overspend are being created as well.

Common obstacle

• IT is only one of many players when it comes to how technology funds are spent. One unskilled, unenlightened, or uncooperative actor can undermine efforts to improve IT financial management.
• Organizational finance and procurement functions tend to be siloed and mired in manual, unoptimized processes, limiting what IT can do to improve.
• Industry-specific regulatory constraints combined with unease around innovation throw speed bumps and roadblocks in IT’s path toward transformation.

Info-Tech’s Approach

Enable your organization’s practice of IT financial management to be agile.

• Understand the context within which IT financial management is operating today and establish agility-focused design principles and objectives.
• Mature IT’s capabilities by aligning and evolving its system for managing IT financials with an eye to built-in agility.
• Collaborate with core finance and procurement functions to improve their integration, agility, and analytic capability through automation and analytical tools.

Info-Tech Insight

Slow, bureaucratic, low-trust IT financial practices can crush an organization’s ability to respond and innovate. To succeed with Exponential IT, organizations need the flexibility to invest in new, high-value capabilities as they arise. A foundational step for Exponential IT is the modernization of IT financial practice hallmarked by CIO-CFO partnership, automated and optimized financial management processes, and a more flexible approach to IT funding

Introduction: What is Exponential IT?

• The technology curve has recently bent exponentially.
• Generative AI has been the catalyst for this sudden shift, but there are more and more new technologies emerging (e.g. quantum computing, 5G), putting significant pressure on all organizations.
• All IT leaders and organizations are at risk of falling behind if they do not adopt new technologies fast enough.
• Exponential IT is a framework defined by Info-Tech Research Group to instruct IT leaders across all IT domains on how to transform their organization and elevate their value creation capabilities, to close the gap between the exponential progression of technological change and the linear progression of IT’s ability to successfully manage that change.
• This blueprint provides guidance on establishing an agile IT financial management system by aligning, standardizing, and evolving a more dynamic and coordinated approach to financial management practices.
• CIOs/delegates can use this blueprint to partner with the leaders in their organization’s core finance and procurement functions to enable an Exponential IT future for technology spend and investment.

Your Exponential IT journey

To keep pace with the exponential technology curve, adopt an Exponential IT mindset and practices. Assess your organization’s readiness, and embark on a transformation journey.

Adopt an Exponential IT Mindset

Info-Tech resources: Exponential IT Research Center, Research Center Overview, and Keynote

Explore the Art of the Possible

Info-Tech resources: Exponential IT research blueprints for nine IT domains

Gauge Your Organizational Readiness

Info-Tech resource: Exponential IT Readiness Diagnostic

Build an Exponential IT Roadmap

Info-Tech resource: Develop an Exponential IT Roadmap blueprint

Embark on Your Exponential IT Journey

Info-Tech resources: Implement an Adaptive System for IT Financial Management

To access all Exponential IT research, visit the Exponential IT Research Center - Go to this link

The state of Exponential IT is characterized by the following attributes

These attributes develop at different speeds – this means that reaching a state of Exponential IT is usually not a near-term objective.

However, when you’ve reached that state, what you’ll see is all these characteristics working together in a coordinated way that allows your organization to bring the right technologies to the right people at the right time.

• Integrated: Organizational functions partner and share data, information, and decision-making with other functions in the organization.
• Consistent: Policies, processes, and procedures are standardized across the organization, including supporting tools.
• Straightforward: Processes/procedures are clearly defined, simplified where possible, and usable.
• Comprehensive: All use cases have been identified, are in place, and supporting processes defined and exercised.
• Transparent: Data and information is complete, clean, classified, organized, and accessible.
• Adaptable: Processes can be updated, changed, and evolved to keep pace with changes in legislation, regulation, business conditions, or other needs.
• Dynamic: Processes like reporting can be executed accurately in real-time and on-demand.
• Future-oriented: Practices focus as much on planning for the future as on tracking of (and learning from) the past.
• Meaningful: The importance and purpose of activities are understood, align with and advance organizational objectives; and are treated as a worthwhile investment of time and resources.

Exponential IT isn’t a project. It isn’t a concrete thing that you can look at or touch. Rather, it’s a paradigm, an approach, a state of mind that evolves and is rooted in thoughtful and well-designed practices.

Apply Exponential IT to financial management

The journey from one end of the scale to the other is marked by a series of scenario-based milestones.

See the Info-Tech tool IT Financial Management System Design Workbook for full descriptions of these milestones.

The degree to which…	Non-Exponential		Exponential	The degree to which…
…the core finance function partners and shares information and decision-making with other functions in the organization.	Siloed		Integrated
	Random		Consistent	…financial management policies, processes, and procedures are standardized across the organization, including supporting tools.
…financial management processes are clearly defined and usable.	Confusing		Straightforward
	Opaque		Transparent	…financial data and information is clean, organized, and accessible.
…all financial use cases have been identified, are in place, and supporting processes defined and exercised.	Limited		Comprehensive
	Rigid		Adaptable	…financial management processes can be updated or evolved to keep pace with changes in legislation, regulation, conditions, or needs.
…financial management processes can be executed accurately in real-time and on-demand.	Static		Dynamic
	Retrospective		Future-oriented	…financial management practice is focused on planning for the future (financial management) versus tracking of the past (accounting).
…financial management activities are understood; align with organizational objectives; and are seen as a good investment of time and resources.	Pointless		Meaningful

However, recognize that there will be challenges…

Many struggle to exist in an Exponential IT world.

Unfortunately, most IT departments and the organizations within which they exist do not have sufficiently mature financial and procurement management practices to operate effectively in an Exponential IT world. This is caused by:

• A lack of knowledge and expertise on the part of both IT and finance/procurement about each other’s disciplines.
• A lack of interdepartmental integration, data sharing, and cooperation between IT, finance, and procurement.
• Significant gaps in the type and quality of data being used to track technology expenditure and make technology investment decisions.
• A lack of governance mechanisms and tools to help prioritize, schedule, organize, and notify primary actors, partners, and collaborators around IT financial activities.
• A tendency to take a historical or reactive stance to financial and procurement issues (accounting) instead of a future-looking, proactive one (financial management).

As a result, not only are opportunities being missed to advance business strategies and transform the organization, but waste and overspend are being created as well.