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ITIL Financial Analysis

ITIL Financial Analysis. Contents. Service-focused analysis Customer profitability Asset valuation Actual vs. planned spending Funding options Post-Program ROI (Return on Investment) Analysis. Service-focused analysis. Service-focused analysis

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ITIL Financial Analysis

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  1. ITIL Financial Analysis

  2. Contents • Service-focused analysis • Customer profitability • Asset valuation • Actual vs. planned spending • Funding options • Post-Program ROI (Return on Investment) Analysis

  3. Service-focused analysis • Service-focused analysis • Costs for the provisioning of each service, itemized by cost types (e.g. licenses, material, labor) • Direct costs (clearly attributable to a specific service) • Indirect costs (shared among multiple services) • Trends in the provisioning costs for services • Variable cost dynamics • Estimates of how costs will change in the case of • Increasing service demand • Decreasing service demand • Thresholds of service demand which require the service provider to make significant investments • Service Value Potential (estimate of the price a customer is prepared to pay for the services) • Competing alternatives and their prices • Value of the service provider’s comparative advantages (e.g. security concerns) • Costs for switching to competing service offerings • Profitability • Actual revenues from each service • Profit margins for each service • Identification of financially unviable services • What services are no longer provided efficiently relative to competing offers • What services are provided to customers at a financial loss? • What services risk becoming unprofitable because of declining demand?

  4. Customer profitability • Actual revenues from each customer • Profits from each customer

  5. Asset valuation • Values of tangible service assets (infrastructure components) • Estimates of the values of intangible assets (e.g. technical expertise, knowledge of the customers’ business processes)

  6. Actual vs. planned spending • For all items covered in the IT Budget: • Forecast (planned budget) • Actual spending on record • If applicable, gap analysis

  7. Funding options • Possible savings from leasing/outsourcing technology as opposed to owning it (shifting costs from the CAPEX budget to the OPEX budget).

  8. Post-Program ROI (Return on Investment) Analysis Assessment if financial objectives of past investments have been met.

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