{"id":4435,"date":"2015-03-04T06:30:36","date_gmt":"2015-03-04T06:30:36","guid":{"rendered":"https:\/\/multiacademstg.wpengine.com\/20000academy\/blog\/2015\/03\/04\/itil-and-iso-20000-budgeting-and-controlling-part-ii-decision-making-tool\/"},"modified":"2025-06-13T15:47:07","modified_gmt":"2025-06-13T15:47:07","slug":"itil-and-iso-20000-budgeting-and-controlling-part-ii-decision-making-tool","status":"publish","type":"post","link":"https:\/\/advisera.com\/20000academy\/blog\/2015\/03\/04\/itil-and-iso-20000-budgeting-and-controlling-part-ii-decision-making-tool\/","title":{"rendered":"ITIL and ISO 20000 Budgeting and controlling Part II \u2013 A decision-making tool"},"content":{"rendered":"

When I started exploring ISO\/IEC 20000<\/a>, one of my thoughts was \u2013 it\u2019s an IT Service Management standard. And immediately I thought of incidents, changes, service assets\u2026 but I didn\u2019t have high expectations regarding financial management. It turned out that I was wrong. ISO\/IEC 20000 sets requirements for budgeting and accounting for services (see the blog post \u201cISO 20000 \u2013 The perfect way to improve IT services<\/a>\u201d to find out more about ISO\/IEC 20000). There are not too many of them, but they are clear, concise and, I would say \u2013 just enough.<\/p>\n

But, before I begin, let me remind you to first read part of this blog series: \u201cITIL and ISO 20000 Budgeting and controlling Part I \u2013 Know your business<\/a>\u201d,\u00a0where you will find an explanation of budgeting, budgeting procedure, and charging. Although it describes budgeting and controlling in general, it\u2019s a good read to gain further understanding of ISO\/IEC 20000 requirements.<\/p>\n

Budgeting setup<\/h2>\n

In ISO\/IEC 20000, budgeting is bundled with accounting. That\u2019s logical, because to be able to budget, you need to know the costs and cost structure of your services. And, according to ITIL<\/a>, the definition of accounting is \u201cthe process responsible for identifying the actual costs of delivering IT services, comparing these with budgeted costs, and managing variance from the budget.\u201d So, first you have to master accounting of the services, and then you can start with budgeting.<\/p>\n

One thing is certain \u2013 ISO\/IEC 20000 does not cover all details about budgeting and accounting. There are many requirements that must be fulfilled, but details lay outside the Service Management System (SMS). The SMS is a management system to direct and control the service management activities you perform. But, information like level and detail of the information needed for the budget, form used to collect the data, budgeting period, etc. are set by the financial department or CFO. So, you will have to establish a strong interface with them.<\/p>\n

But, that\u2019s not all. Other business units are also important, because the standard requires you to budget licenses, etc. for the services you provide. Take, for example, a desktop service: you have to budget the number of licenses needed for, e.g., an operating system. And you don\u2019t know how many people a business unit plans to employ in the next business year. So, you have to get that information from them.<\/p>\n

Basically, the purpose of the budgeting according to ISO\/IEC 20000 requirements, is to enable you to control the financial aspect of the services, as well as changes and improvements to those services.
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