Why managing IT costs without visibility means hoping, not steering
This article is part 1 in a series on IT Financial Management (ITFM), written by Ruben Bloembergen, Manager Sourcing & IT Advisory at Eraneos. The series covers IT cost transparency (part 1), showback and chargeback (part 2), modern budgeting and forecasting (part 3), value-based steering with benchmarks and KPIs (part 4), freeing up budget for innovation (part 5), and a mature ITFM organization as a source of competitive advantage (part 6).
“We don’t actually know where our IT spend is going, let alone how to explain it.”
“Our reporting is too manual and too fragmented.”
“By the time the numbers are right, it’s too late to act.”
Sound familiar? You’re not alone. For many CEOs, CFOs and CIOs, IT remains a financial black box. There’s a total figure. There are budget codes. But the story behind them is missing. And that’s a problem. Because as long as you don’t know where your IT euros are going, every decision about cloud, data and AI is made half blind. ITFM is not about spending less, it’s about spending better, and positioning IT as a partner that creates value. Without that foundation, IT stays a cost line in the boardroom, not a source of value.
"ITFM is not about spending less, it's about spending better."
The reality: IT as a black box
IT costs are scattered across general ledger accounts, legacy cost centers and contracts. Finance has its own overview, IT has another, and the business sometimes builds a third. Every reporting cycle, someone spends weeks collecting figures, aligning definitions and explaining exceptions.
Meanwhile, the questions pile up. How do IT costs relate to revenue? Why is the IT bill higher this year? How much goes to keeping the lights on, and how much to building what’s next? The answer is too often an estimate and a promise to follow up within a few weeks.
The effect is predictable. The CFO sees IT as an unexplainable cost. The CIO ends up defending rather than steering. The business feels no ownership, because it can’t see how its own choices drive costs. Discussions rarely focus on value, almost always on cost.
What Eraneos consistently sees across sectors: when visibility is lacking, organizations reach for tooling. Understandable, but the root cause almost always lies elsewhere, in how costs have historically been booked, how data is distributed and how responsibilities are assigned. Tooling doesn’t fix that. A clear cost model does.
What IT Financial Management actually is
IT Financial Management is not another layer of administration. It’s a different way of looking at IT costs, one where finance, IT and the business work from the same facts and speak the same language. Three things are central:
- Visibility. Not a generic “IT” line item, but insight per service, application, business unit and project. You see what is being delivered, what it costs and who uses it.
- Control. Budgets and forecasts are built on evidence, not guesswork. Variances surface quickly. The budget becomes a steering tool, not a ritual.
- Optimization. You see where overlap exists, which legacy systems are expensive and where savings are possible. And just as importantly: where investing more actually pays off.
Without this foundation, every digital transformation is financially blind.
Today versus tomorrow: how the conversation changes
Today, the CFO asks in a quarterly review: “What does our commercial chain actually cost us in IT?” What follows is a round of calls to finance, IT and the business. Spreadsheets are gathered, figures retyped, definitions aligned. The report lands just in time, but it’s already outdated and full of assumptions.
With transparency in place, that conversation looks different. The CIO shows directly which services are delivered to which domains and what they cost. The CFO drills down into licensing, infrastructure, support and third-party spend. A business unit lead sees what share of the budget flows to their chain and which services sit behind it.
The question shifts from “why is it more expensive?” to “which decisions led to this increase, and is that what we intended?” Volume growth, price increase or inefficiency: you can see the difference and act on it. Only then does the boardroom conversation become one about value.
From fragmented data to management information
Moving from spreadsheet chaos to actionable insight doesn’t require a large program, but it does require a few deliberate choices.
Agree on a shared cost model. Finance, IT and the business decide together which services to distinguish, which cost categories belong to each, and at what level to report. Build on existing standards rather than inventing something new. In the projects Eraneos supports, this conversation is often the turning point: it forces clarity about what IT actually delivers and to whom.
Keep the model practical and adaptable. A good cost model isn’t the most complete one, it’s the most usable one. Avoid overcomplicating it, and build in room to adjust as new insights or developments emerge. That way it evolves with your organization rather than becoming obsolete.
Connect financial and operational data, and make it repeatable. As long as exports from your financial system, configuration database, cloud environment and HR are manually combined each month, you’ll spend hours on reports that arrive too late. Automate where you can, and turn reporting into a repeatable process.
Embed it in your organization’s regular decision-making cycle. That means the recurring moments where IT costs and priorities are structurally discussed: quarterly reviews, portfolio sessions and budget rounds. Assign responsibility for the cost model and reporting to a single role with clear accountability. Without that anchor, you’ll be back in Excel within a year. Organizations that do this well report consistently shorter time spent finding and correcting figures, less debate about the data and more discussion about what it means, and optimization opportunities that quickly free up several percentage points of the IT budget, resources that can be reinvested with purpose.
What does this mean for you?
How long does it take your organization to genuinely answer a board question about IT costs? If the answer is “weeks,” you’re not steering. You’re hoping.
Don’t start with tooling. Start with an honest conversation. Bring together your CIO, CFO and a few IT and business leaders, and ask one question: which questions about IT costs can we not answer properly today? The answer to that question is your first ITFM roadmap.
Anyone who wants to position IT as a serious business partner has no choice but to get this foundation in order, now. Every month you wait is another month of steering half blind.
Next in this series
The next article looks at how to make IT costs visible and tangible at the points where decisions are made. We examine showback and chargeback. Showback means showing departments what IT costs them, without directly charging them for it. Chargeback goes one step further: costs are actually allocated to the consuming department or chain. Both approaches bring accountability closer to the business and make IT choices more concrete.
Following articles will cover modern budgeting and forecasting, value-based steering, and freeing up budget by shifting from run to grow.
