Building a better bottom line is just as important for an IT department as it is for the whole organization at the enterprise level. Implementing sound financial management within an IT framework is broader than simply being more efficient. Many factors are involved: an understanding of the main drivers of IT costs, aligning IT spending plans with overall business strategy, using financial resources efficiently, viewing IT expenditures as investments and having procedures to track their performance, and implementing sound processes for making IT investment decisions.

Estimating what a project will cost is only half the battle; controlling those costs during the project and after delivery is equally critical. In this article, we examine some methods to predict and manage costs, part of a sound basis for overall IT financial management.

1. Control baseline costs
2. Acknowledge hidden IT spending impacts
3. Understand long-term application costs
4. Understand IT cost estimation truths
5. Leverage current system investments
6. Implement short-term cost cutting measures
7. Implement long-term cost cutting measures
8. Implement pricing and chargeback mechanisms
9. Use governance to drive IT investment decisions
10. Quantify the value/benefit proposition for IT investments