ITIL Leadership Playbook – Week 7, Blog 2

“You don’t control IT if you can’t model its cost. And you can’t lead it if you don’t understand its value.”

💸 The Reality: IT Budgets Without Cost Intelligence

Most CIOs can walk you through their cost centres.

They’ve got the P&L. They’ve got the run vs change numbers.
They sit in the monthly reviews. They sign off the accruals.

But here’s the truth:
That’s not financial management. That’s financial housekeeping.

What’s missing is insight — into how technology consumption drives spend, where waste hides in the estate, and how cost links to business value.

So when cloud costs creep, or a CFO asks what a 20% cut would really mean, the response is often tactical, late, and unconvincing.

Because IT leaders aren’t lacking numbers — they’re lacking models.

❌ The Problem: You’ve Got Budgets, Not Insight

Let’s be clear — every CIO has a budget.
But few have a dynamic model of how IT spend behaves.

That means:

• New starters get added, but no one can say what that does to service costs.

• Cloud costs spike, but there’s no link to usage or business demand.

• Forecasts are flat, based on last year plus a guess — not consumption trends.

• Vendor spend balloons, but no one can connect it to outcomes.

This isn’t just frustrating. It’s dangerous.
Because without financial insight, strategy gets reduced to survival.

“By 2027, 70% of digital leaders will report cloud cost overruns as the top reason for failed transformation initiatives.”
— Gartner, 2024

✅ The Good: When CIOs Own the Financial Narrative

World-class IT leaders don’t just manage spend — they engineer value.

That means:

• Cost-to-serve models are linked to the service catalogue and updated quarterly.

• Run vs Change breakdowns are visible by service, product, and team.

• Cloud costs are tagged, forecasted, and tied to consumption drivers.

• Showback models let business leaders see their footprint and challenge value.

• Service dashboards include cost overlays — not just uptime metrics.

• Vendor performance is tied to outcomes — not just uptime SLAs.

This is financial management as a leadership discipline, not a support function.

❌ The Bad: When IT Is Just Bean Counting

Too many IT organisations are stuck in backwards-looking, spreadsheet-based cost control.

Symptoms:

• Forecasts are static and always overrun.

• Service owners don’t know what they cost to run.

• Finance can challenge spend better than IT can defend it.

• Vendor renewals go through without scenario planning.

• Cloud costs rise but the CFO hears “we’re looking into it.”

This is how transformation initiatives stall.
Because no one trusts the numbers — and the story’s always reactive.

🧠 CIO WAR CHEST: Questions That Signal Financial Maturity

Ask these now — they’ll expose whether your org is managing costs or just reporting them.

1. What’s our run vs change split this quarter, and how does it trend?

   • Ask: IT Finance Lead, PMO

   • Data: Budget ledger, time allocation, project OPEX/CAPEX ratio

2. Which services are the most expensive to run — and do they align with business priorities?

   • Ask: Service Owner, Portfolio Lead

   • Data: Cost-to-serve model, service tiering

3. What happens to our service costs when user volumes grow?

   • Ask: Service Design, CloudOps, Finance Business Partner

   • Data: Cost elasticity models, onboarding forecasts

4. Where is our cloud spend increasing the fastest — and is it tied to planned demand?

   • Ask: CloudOps Lead, Tooling Analyst

   • Data: Tagged cloud consumption reports, growth drivers

5. Do we track vendor spend against outcomes — not just contract terms?

   • Ask: Procurement Lead

   • Data: Scorecards, outcome-based payment models

6. Are cost models part of our service dashboarding — or hidden in spreadsheets?

   • Ask: Tooling Lead, Ops Governance

   • Data: Visual dashboards with cost metrics, crosswalks with usage data

🧨 The Hard Truths for CIOs

• You can’t lead what you can’t model.

• Every “unexpected” cloud bill is really a failure to forecast.

• If your team can’t tell Finance how cost links to value, they’ll define value for you.

• If you can’t articulate the business cost of service X, why fund it?

🎯 What Great Looks Like

Modern CIOs aren’t just operational leaders.
They’re technology economists — fluent in how services behave, scale, and create value.

They:

• Forecast spend like a trader — with models, not guesswork.

• Challenge vendor costs using scenario modelling and outcome data.

• Link cost transparency to accountability at team level.

• Integrate ITFM tooling into the wider service management and delivery platform.

• Collaborate with Finance as a partner, not a cost centre.

🛠 How We Help

We embed ITFM into the operating model:

• Service-aligned cost models.

• Dashboards linking cost, usage, and outcomes.

• Run vs change tracking with benchmark data.

• Cloud governance controls to prevent waste.

• Vendor cost-performance mapping.

👉 Need to move from financial reporting to financial leadership? That’s what we do.

🔜 Coming Up: Risk, Security & Continuity

Next week, we close the series with resilience — and it’s a big one:

• Blog 15: Risk Management – ITIL’s Role in Strategic IT Risk Reduction

• Blog 16: Information Security Management – Why ITIL Security Practices Must Align With Business Protection