Avoiding Unnecessary IT Spending: An ITIL-Driven Approach

# ITIL

# Service Management

# Thought Leadership

Why IT Financial Maturity Matters

March 9, 2026

Yurguen Penaranda Thomas

Why IT Financial Maturity Matters

Year after year, many IT budgets grow, yet the same question remains: are we really creating more value, or just financing complexity? Many organizations still manage their IT budget simply as a cost center, rather than as an enabler of value. In organizations where IT financial practices are not very mature, a contradiction often exists: on one hand, IT is seen as one of the most expensive areas of the organization, but on the other hand, business areas request high-end computers, immediate response times from IT, IT systems that practically never fail, etc., and all of this translates into higher costs.

One of the main reasons why this contradiction occurs is when organizations still operate with a siloed approach. IT maintains a purely technical focus, but there is inadequate communication with business areas or finance departments. This results in situations where no one questions whether there might be a more economical way to meet the requester’s requirements without affecting the expected quality.

The contribution of ITIL Guiding Principles to IT financial management

The guiding principles introduced in ITIL 4 and further emphasized in ITIL Version 5 can be very useful for achieving better optimization of financial resources within an organization’s IT area.

Focus on Value: This guiding principle allows for a “cost-benefit” analysis by asking whether the organization’s needs truly justify the investment that will be made in equipment, infrastructure, licenses, and IT services. The answer to this question may be yes—for example, due to technological obsolescence, regulatory requirements, or innovation needs, there may indeed be value that justifies the investment. It may also be concluded that there is a more economical option to meet the organization’s needs, generating savings compared to the initial proposal. Or it may even be concluded that there is no justification supporting the investment at all, leading the organization to reject the proposal and avoid an investment that would not generate value.

Start where you are: When one of the business areas or administrative departments of an organization presents an initiative that involves IT costs, applying this principle can be very valuable. It allows organizations to ask: What do we already have that could be useful to develop this initiative? It may be that the organization already has a software tool capable of meeting the requesting area’s requirements, significantly reducing the cost of implementing the initiative. Another scenario could be that there is no software that fully meets the requirement, but one that could be customized to do so, which would also reduce the cost of the initiative. It may also be that, as part of applying this principle, existing personnel, knowledge, or lessons learned from the past are identified that could contribute to financial savings during the execution of the initiative. It is also possible that the conclusion after applying this principle is that the organization truly does not have any software, knowledge, or previous experience that could help execute the initiative—but at least the review was conducted.

Think and work holistically: Applying this principle in these types of scenarios can help organizations view a requirement not just as the need of a specific department, but instead analyze whether the implementation could be used by multiple areas across the organization. This can generate greater value from the implementation while spreading the cost across several departments or business units.

Keep it simple and practical: Sometimes it is mistakenly believed that the solution to organizational challenges is to implement cutting-edge software tools. This principle helps organizations maintain focus on having simple practices, processes, and workflows that generate the expected value. The more complex a software tool is, the higher the associated costs (implementation, maintenance, licensing, training). Therefore, when applying this principle from this perspective, organizational leaders can question whether it is truly necessary to implement a robust and expensive software tool, or whether a simpler and lower-cost option could meet the requester’s needs just as effectively. A clear example of this can be seen with the rise of AI. It is currently the technological trend worldwide, and organizations do not want to fall behind. However, the question remains: is adopting AI truly necessary for every organization (considering the cost involved in its implementation), or is it simply about being part of the trend?

Optimize and automate: Similar to the previous point, automation or the implementation of software tools should not necessarily be the first option when trying to solve errors in the organization or improve operational efficiency. Applying this principle means first focusing on identifying optimized practices or processes: simplifying tasks where possible, eliminating tasks that do not add value to any stakeholder, restructuring the organization, or providing proper training to staff. These types of measures could generate benefits such as error reduction and improved delivery times, and may become more economical solutions than implementing software tools. Even when automation tools are eventually implemented, having optimized processes beforehand allows the value obtained from automation to be significantly greater compared to automating inefficient processes.

Value co-creation as an enabler for efficient IT budget usage

Value co-creation (a concept introduced in ITIL 4 and reinforced in ITIL Version 5) proposes that within a service relationship, the expected value is created jointly between the service provider and the service consumer. By adopting this approach, savings can be identified within an organization’s IT spending. This is because the service consumer becomes more involved throughout the entire service lifecycle (starting from the design stage) and provides continuous feedback. This helps the service provider—whether internal or external to the organization—identify the optimal solution (in terms of costs and resources) for the consumer’s needs, without having to offer a much more expensive solution that the consumer does not actually require.

The MoSCoW methodology to prioritize IT spending

The MoSCoW methodology can be very useful for prioritizing the requirements that a technological element (software, service, equipment, or infrastructure) that the organization must acquire should have. This methodology allows requirements to be classified into four categories: Must have (requirements that must absolutely be fulfilled), Should have (important requirements but not strictly necessary), Could have (desirable but not necessary requirements), and Won’t have (less critical requirements or those that have already been defined as not being included at the moment).

Using this prioritization of requirements allows the budget allocated for this technological investment to focus primarily on the must-have requirements, while the requirements classified in the other categories may or may not be considered depending on how much additional budget the organization is willing to allocate to satisfy those non-essential requirements. This ensures that the cost of the technological acquisition is objectively supported by the requirements that truly add value to the organization, rather than simply by what the requester wants.

KPIs to support the need for IT investment

ITIL Practices (introduced in ITIL 4 and maintained in ITIL Version 5) propose a series of baseline KPIs (Key Performance Indicators). The analysis of these KPIs measured by the organization can help support the need to make certain IT investments, so that these investments are not simply based on the requester’s opinion. For example, statistics showing high consumption of resources (CPU, RAM, storage) (generated through the Monitoring and Event Management practice) can support the need to acquire additional resources. Statistics related to information security risks (generated through the Information Security Management practice) can support the need to acquire more robust information security software. RTO and RPO statistics (generated through the Service Continuity Management practice) can support the need to acquire backup infrastructure.

Focusing not on increasing the IT budget, but on defining it strategically

A well-developed adoption of ITIL can generate financial benefits when it comes to IT investments. The focus should not be on increasing the budget, but rather on developing it strategically, where the value generated by each investment is clearly understood and where clear criteria exist for prioritizing IT investments. To achieve this, there must be proper alignment and communication between the IT department, the organization’s business areas, and providers, in order to jointly find the IT solution that satisfies the requester’s requirements in the most cost-effective way possible. IT financial maturity is not achieved by deliberately cutting costs, but rather by aligning investments with the value they are expected to generate.

Enjoyed this post? Join the conversation by leaving a comment or sharing your thoughts below, we’d love to hear your experiences and perspectives. Don’t forget to explore our upcoming events for more opportunities to learn and connect, and visit the forum to continue the discussion.

Where conversation, connection, and real-world practices come together.