Effective financial management will help you more accurately quantify the value of the services you are providing to the business as well as the value of the assets used to provide those services. If you are not responsible for financial management in your organization, many of these concepts may not be relevant to you; however, everyone in IT should have an understanding of the following key concepts;
Service Valuation; is the assessment of the service in financial terms and is mutually agreed upon by the provider of the service and the customer
Business Impact Analysis; helps you assess value as well as how much you should be willing to expend to provide and maintain the continuity of a particular service
Return on investment; We all know this one or as we adjust in a SaaS world, Return on Deployment
Service Portfolio Management; is a means by which you can dynamically and transparently govern resource investment
Demand Management; assists in avoiding both excess capacity as well as not enough capacity
The Business provides funding to IT so that IT can support critical business activities. Financial management and service economics is all about being a good steward of the money that the business entrusts to your. Ask yourself: Am I truly using this money in the best possible way to deliver the services the business wants? Ultimately you need to understand the economics of your IT business so that you can ensure you are being a good steward.