What is IT Cost Management?

The digital transformation trend, which started to show its effect in the 21st century, increased its importance in 2020 with COVID-19. For years, businesses have been making efforts to improve their IT infrastructure by investing in technology to improve their operational processes and customer satisfaction. In parallel with the growth of IT infrastructures, the IT costs of companies also increase. So, companies need to implement cost control to avoid over-budget.

Definition of IT Cost Management

IT cost management defines the business processes performed to control IT-related expenditures in companies. The IT cost management process includes the evaluation, estimation and analysis of an organization's IT cost such as implementation, hardware, integration, etc.

While information technologies are vital elements of an organization's infrastructure, it is also important that they be in an efficient and optimized structure. For this reason, costs are one of the most important metrics when evaluating the efficiency of an IT structure.

Why is IT Cost Management Necessary?

The IT budget is never unlimited. CIOs want to make their IT investments in the most optimized way to use the existing IT budget. IT cost management can be started by first examining the efficiency of existing resources. Since IT cost management is a subcomponent of IT inventory management, we need ITAM here. ITAM shows us what assets we have in our IT inventory. In this way, unused or duplicate technology assets can be identified and disposed of.

Key Benefits of IT Cost Management

• Simplifies supplier management.
• Improves cohesion of business units and IT.
• Provides measurement of the costs of external resources.
• Indicates the value generated by IT spending.
• Ensures the optimization of the IT budget by identifying unnecessary costs.
• Generates resources for projects with high IT value.

IT cost management is a key component of the strategic business plan, an essential component of a functional business company for businesses of all sizes. This poses a variety of threats if companies do not perform IT cost management.

Future projections of IT-related spending are included in a business plan. A business plan typically includes five-year financial projections. Financial figures within the IT cost management component of a business plan depend on the company's annual budget. This can cause major cash flow problems for a company if the part of managing IT costs is out of sync with the rest of the business plan.

IT Cost Management Software

Spreadsheets and software applications are heavily used in IT cost management. But, it is not very efficient for companies with a complex IT structure to track and evaluate IT costs with spreadsheets. IT cost management software provides a centralized platform that enables businesses to manage and budget all their IT expenditures.

What is IT Asset Management?

IT Asset Management encompasses monitoring and managing the assets in a business's IT inventory throughout their lifecycle. Performing IT cost management alone is not enough. If a business is ultimately to achieve its IT goals, it must focus on optimizing the IT environment as a whole.

Loggle, an IT asset management software, offers an IT cost management tool. You can track all your software, hardware, licensing, maintenance, additional development and outsourcing expenses of your integrations with Loggle.

Start implementing end-to-end IT asset management with our Application portfolio management, hardware asset management, integration inventory management and IT cost management solutions!