When an organization spends hundreds of millions (or more) on IT, visibility and control over that spend is a high-stakes proposition that can make or break a CFO’s legacy.
Yet many companies manage enterprise IT budgets with traditional FP&A tools that are ill-equipped to handle the complexity and decentralized nature of today’s IT spending.
In this context, IT financial management (ITFM) has emerged as a defining capability for helping CFOs drive the business forward in the face of accelerating technological change. Let’s take a closer look at how.
1. Improving Forecast Accuracy
One of the biggest ways ITFM empowers CFOs is by making IT forecasting more accurate.
Traditional forecasting methods rely heavily on manual spreadsheets and lack granular detail, whereas ITFM introduces a more continuous, detailed, and accountable model that:
- Integrates actuals in real time from the financial book of record
- Maps spend to IT structures to provide decision-making context
- Supports rolling forecasts across multiple years
- Surfaces variances quickly and ties them to those accountable
The reason this is so important is that if you over-forecast, you miss opportunities to spend your money effectively, and if you under-forecast, you create funding challenges.
Budget owners know that if they don’t spend allocated funds this year, they may get less budget next year. The result is that they overshoot their forecasts, pushing leftover funds from one month to the next as the gap between forecast and actual spending grows increasingly wider.
Consider, for instance, the Fortune 500 organization where a 10% variance on a $1B IT budget meant $100M in forecasted spend that never materialized. Those millions represent a massive opportunity cost to the organization, where companies miss the chance to invest IT dollars strategically to drive the business forward – all because the forecast wasn’t accurate.
2. Unlocking Reinvestment Opportunities
ITFM frees up funds for reinvestment and innovation by helping companies optimize IT spend intelligently. The key lies in ITFM’s ability to connect operational detail with financial data, linking every dollar spent to services, applications, products, business units, and strategies.
This level of granularity is what allows finance leaders to understand where the money is going and what specific value it provides to the organization. It’s also what supports a more surgical approach to optimization, compared with traditional top-down cost-cutting mandates.
ITFM’s detailed view into IT spending helps CFOs better identify areas of inefficiency, assess the downstream impact of cuts, and redirect spending toward higher-value initiatives. The result is smarter, more targeted cost reductions that deliver maximum impact with minimal disruption.
3. Shortening Planning Cycles
The sooner leadership has access to updated information and insights from the monthly financial close, the sooner they can use that information to make decisions. Part of the issue is that teams often wait until the end of the month to process actuals, leaving leadership waiting on revised financials.
ITFM solutions can drive significant business process improvement in this area with capabilities such as:
- Automatic integration with the financial book of record
- Real-time actual mapping and forecasting
- Automated generation of accruals
Solutions like Nicus also shorten planning cycles with methodologies such as incremental actuals processing. For a company with 10,000 lines of actuals that the team must process, it can turn a 15-day process into one that takes just three.
In the end, these capabilities mean leaders have the insights they need when questions arise, not weeks later when the opportunity has passed. The result is faster pivots, quicker responses to market changes, and greater business agility overall.
4. Aligning IT Spending with Strategy
Unlike traditional FP&A, ITFM is built around providing complete transparency into how IT spending aligns with the broader business strategy. With the right solution, you can connect spend to anything that makes sense for your organization — but some of the most common and high-impact connections include:
- Services
- Applications
- Products
- Business Units
- Strategies
The reason why this connection is important is that it’s what allows you to judge the impact to any of these deliverables if you adjust the budget line. If you don’t have this connection, making changes is like cutting wires to a bomb without knowing which one is the right wire. If you’re right, it works. If you’re wrong, it blows up.
5. Maximizing Technology ROI
CFOs frequently approve major technology investments without visibility into whether they’re providing real ROI to the company, or they approach an investment based on a projected ROI — but no one follows through to confirm whether that ROI was actually delivered. The explosion in AI investments is the latest example, similar to the massive budget run-ups seen in the early days of cloud adoption.
By integrating financial and operational data, ITFM empowers finance leaders to ask critical questions: Who is using this tool? What are they using it for? What value is it delivering to the organization?
That means instead of hoping for results, CFOs can track ROI throughout the investment lifecycle to ensure every dollar is working as hard as possible.
What sets ITFM apart is its ability to move beyond static reporting to provide CFOs with a dynamic, decision-ready framework. By integrating financial and operational data within a responsive, granular cost model, ITFM gives finance leaders the clarity and control to reallocate spend intelligently and influence outcomes with precision.
Learn more about Corporate Planning vs. ITFM tools in our free eBook
