If you were about to make a decision with a potential $10 million impact, would it give you pause to learn your numbers might be more than 50% off? Assuming you have any financial numbers at all.
That’s the implication for IT asset managers and other IT and business stakeholders relying on financial data manually keyed into ServiceNow IT Asset Management (ITAM) workflows, who are essentially flying blind when it comes to making high-stakes decisions.
The reason is that the financial data virtually all companies use in ServiceNow ITAM today doesn’t capture the true total cost of ownership (TCO) across the asset lifecycle. In many cases, these data points are not populated at all.
Let’s look closer at why the financials that organizations use are so far off, and how to get accurate TCO data into ServiceNow to support smarter IT spending and decision-making.
IT Asset Managers oversee the lifecycle of IT resources, working closely with Software Asset Managers (focused on software licensing and compliance), Hardware Asset Managers (managing physical devices), and Enterprise Asset Managers (integrating IT with broader organizational assets). Together, they ensure optimized value and risk management. All these stakeholders need financial data to do their jobs effectively.
While ITAM on ServiceNow includes placeholders for financials, those organizations that do enter data there typically only include the purchase price of individual IT assets.
Here’s why this is a mistake: the purchase price only represents part of TCO, defined as the total amount spent over the entire lifecycle of an IT asset. Internal and external labor costs, for instance, are completely overlooked, despite the fact that they represent the largest proportion of IT spending related to the ownership of the assets.
For IT asset managers, this one omission alone results in underrepresentation of asset costs by 60-70%, such that the numbers aren’t even directionally accurate.
The question then becomes, if you’re basing decisions on numbers that are so far off, are you making the right decisions?
A full accounting of TCO must incorporate costs from every stage of the asset lifecycle, including:
Without this level of detail, IT asset managers and other IT and business stakeholders risk making decisions based on incomplete and inaccurate TCO data. For many organizations, this means missing opportunities to improve asset utilization, under-representing the true costs leaving an environment and overlooking waste that could be eliminated to reduce CapEx and OpEx across the enterprise.
Part of the challenge in getting accurate TCO aligned to IT assets is that the data it requires lives in so many different places across the organization. What’s more, IT and finance teams typically operate in separate silos, leading to discrepancies between reported numbers and actual expenditures that become a sum of errors across the board. In cases of discrepancy, business leaders are more inclined to trust finance’s version of the numbers over IT’s.
Nicus FMDB for IT Asset Management bridges this gap, populating data from the general ledger into the ServiceNow ITAM workflow. The FMDB cost allocation engine allows organizations to tie IT assets to more than just purchase price, encompassing internal and external labor costs, hardware, software and cloud provider costs.
Built in collaboration with ServiceNow, FMDB sits at the nexus between finance and IT operational data, and can be deployed in a matter of hours so companies can:
New technologies like AI are driving significant increases in IT budgets, with Gartner survey data showing that 92% of companies have plans to invest in AI.
Without effective cost management, however, these investments risk following the same trajectory as early cloud initiatives—overpromising on cost savings while driving up significant hidden costs.
In the early days of cloud adoption, many organizations assumed that migrating IT to the cloud would be a cost-saving measure. Companies that only accounted for direct expenses like subscription fees while ignoring factors like migration costs and operational overhead faced massive budget shock as actual costs far exceeded expectations.
In fact, some companies nearly went bankrupt in the rush to the cloud due to ungoverned spending and a lack of transparency into TCO.
Today, ungoverned AI investment presents a similar risk, with companies dumping millions of dollars into AI across every corner of the organization without a full understanding of what they are spending.
With Nicus’ expanding range of FMDB products for ServiceNow, companies can reduce this risk, aligning AI investments to where it’s being used across the enterprise. Only then can you link the cost footprint to value, so you can see which AI investments are actually helping you reach the goals you set out to achieve.
As companies continue to grow their footprint on ServiceNow, ITAM has the potential to do more than tally up assets—it can rewrite the script on IT’s strategic value. In other words, what’s more compelling: showing that you retired 17 unwanted assets, or proving with hard numbers that those cuts saved the company $100,000?
Establishing clear alignment between IT and finance drives more credible and defensible decision-making, but the true benefits go even deeper. With the ability to track accurate TCO throughout each stage of the asset lifecycle, ITAM teams shift from being cost centers to impact drivers, delivering wins that unlock real transformation.
Get your free trial of Nicus FMDB on ServiceNow