Financial transparency of the itSMF: let's have some.

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The IT Skeptic estimates itSMF International, the "not-for-profit" governing body separate from the 40+ local chapters but owned by the members, turns over somewhere approaching a million dollars annually. They do this without any public reporting of their finances, as far as I can tell.

5% of itSMF local chapters' income goes to itSMFI, though certain chapters are holding out on paying. Let's do some beer-coaster maths shall we? 40 chapters worldwide. USA has 7000 members, my country has 400. Looking at the list of chapters, I'm guessing at least ten of them have a thousand members, and lets say the other thirty at 200 each. All pretty conservative numbers: that gives us 7000 + 10*1000 + 30*200 = 23,000 members. According to one source there are 75,000 members. Let's spilt the difference at 50,000. Say average dues US$100 each that's $5M. Then chapters have additional revenue from sponsorship, book sales, conferences etc. Let's say 50% more again, conservative extimate $7M. So thats .05*$7M = $350k, say somewhere between $200k and $500k per annum from the chapters.

In addition there are 8 global members at $40,000 each, so there's another $320k - no wonder they have a global membership drive on right now offering 30% discount on V3 publications (ask about getting a 30% discount for your local chapter or - gasp - even for yourself as a member... and see what happens). [Incidentally if a global member takes a 100-user licence of V3 this discount represents about $20k. As regular members they would have got half that, so they get about 25% of their dues back in extra discounts alone and the local chapters lose all that revenue. Actually not all, 20% of global members' fees supposedly flows back to local chapters somehow, to compensate them for the fact that a number of local staff of global members get free membership. That's right: itSMFI collects the revenue while the local chapters carry the cost of servicing their staff.]

In addition itSMFI is entering into paid contracts to do ITIL V3 translation, book publishing, and other commercial ventures, revenue unknown.

I would estimate itSMFI revenues at half a million to a million dollars a year. That's not small change. So here's my questions:

1) itSMFI is required to file annual audited accounts in the UK but that does not constitute transparency. The 2006 annual report has been posted on the itSMFI website. This is an excellent indication of itSMFI activities and the Board are to be commended for posting it. But there is no financial information. What were the revenue and expenses? How was money made and where was it spent? What was the breakdown across administrative services, travel, legal services, and consulting services? A not unreasonable question to guys spending several hundred thousand dollars of our money per year.

2) What is itSMFI doing to promote itSMF worldwide (as distinct from ITIL), and specifically what services are provided to local chapters when starting up? Do they get seed funding? Mentoring? Constitution, processes, website or other templates drawn from the IP of 40 member chapters? Web hosting services? The annual report indicates that this is an area that fell behind. What will be provided to a new one today?

3) What is itSMFI doing to govern itSMF worldwide? What oversight is there of the affairs of chapters? What accountability is there to the centre? What steps has itSMFI taken to provide independent audit or governance of the election problem at itSMF USA to protect the itSMF brand internationally?

4) How and when is the annual meeting announced, in particular calls for nomination? Are there minutes of previous meetings? Who is eligible to stand? For that matter where is the itSMFI constitution / bylaws / operating rules published?

5) What role does itSMFI play in giving itSMF members "a unified voice"? [Note: this is a phrase which has suddenly appeared in a FAQ on the website, but still does not rate a mention in the objectives. We'll get there....] itSMFI is represented on a number of bodies, but how does itSMFI communicate with its constituents? When will direct forms of communication such as a forum be implemented?

Whilst this article is focused on itSMFI, take a look at your local chapter of itSMF and ask the same questions, substituting "locally" for "worldwide". If you are not happy about the answers, start asking the questions out loud: where's the report? What do we get for our money?

Or of course you could just continue to hand over the money and take whatever you are given.



The reality is that they are a corporation in disguise. Money drives them.

Where does that money go? Where do you think, one way or another.

It is high time people saw through this charade and opted for a genuine open route.

Much better

Hey come on - give the guy a break. We are already getting more information from the new CEO of ITSMF on its activities than we've ever had before. Continual sniping and demanding will not make things happen any quicker. Do not let your behaviour get in the way of something positive - that is just being churlish.

Well done Skeptic and well done Keith. More information still required but keep the blogging up.

Can we be clear and careful

Can we be clear and careful on roles here. Keith is Company Secretary of ITSMF International. He is not CEO of International. He is CEO of itSMF UK. International has a remit to act on global issues that affect all Chapters. It would be interesting to discover what Governance it has in place so that its officers are a) selected in an open and transparent way (for example the recent appointment of the Company Secretary might be a good one to start with...Sorry Keith!!!!) and b) that International Officers don't find themselves in a position of a conflict of interest with their operational roles and financial responsibilities within a chapter.
(Keith I think the confusion arises from the International 'About us page' which notes your position as 'CEO & Company Secretary. Please can you ask your colleagues in UK to amend website to reflect just the role you have in International Board as this is the International Board page? It's causing a bit of confusion and I'm sure you wouldn't want that!! If the Chapter CEOs are to be listed (why not?) then ALL of them should be listed)

Sure - Clarity and careful are my middle names!

I'm happy to oblige if in fact you are correct, but you are not. Not sure where you are getting your information from but here are the facts anyhow. I speak from a position of authority on this.

My role is as Company Secretary and Chief Executive Officer for itSMF International. I'm titled as Chief Executive Officer - Operations. The itSMFI has an agreement with the UK Chapter which is for the "provision of services" to itSMFI and this has recently been extended to April 2008. It specifically includes the role of Chief Executive Officer (clause 2.1 to 2.3 - if you are a Board member who has written the commentary above).

itSMFI also employ a consultant under contract, who is helping the organisation to look at strategic development and he often goes under the title of Chief Executive Officer - Strategy.

I have been tasked as Company Secretary by the Chairman, to update and modernise the governance structure. This will be discussed at the Board in July and if approved put to the chapters either at an EGM or at the AGM.

I am also CEO of the UK Chapter.

Am I wasting my time giving you this information?

Yours in ITSM!


Thanks Keith So itSMFI has 2

Thanks Keith
So itSMFI has 2 CEOs -- both are under contract. One is for Strategy and one is for Operations. So for clarity to the members both must be listed under the appropriate page under the itSMFI About Us page. What is troubling is that it gives the appearance that itSMF UK, who clearly manage the website under contract, have seen fit to include the only the Operational CEO who is a UK Officer. It gives a bad impression -- but I'm sure it actually is a simple oversight and because of the clarity that was promised it will be rectified.
So that there are no future misunderstandings the Governance of itSMF must follow the principle that itSMFI MUST be independent and separate from any Chapter and its operations to ensure that it can deal with all Global issues and Chapters in a level and objective fashion.

(PS What happened to Ken Wendle whose role on the About Page is Governance?)

Ken's still there

Ken's still there and that's his role. I don't see the link with the CEO question. Or do you mean where is he in some specific governance context, such as the itSMF USA election governance issue?


The itSMFI has always worked in a stealth mode. Information has alway been slow to come from them, and when it does come out, it has been drug out. Keith seems to have opened that door and perhaps can make some changes in the perception that the international is worthy of support. That being said, what's going on and what can be expected it the months before the next AGM?

Aren't elections due this year? Have nominations surfaced, or will they do it the way the US does it, the old fashion Chicago style.

ATTENTION all readers who are itSMF members

That is precisely question 4 above. I encourage all readers who are itSMF members (most of you I assume) to ask that and any other questions of your local chapter. Ask them formally and ask your chapter executive to pass them officially to itSMFI for response. If that doesn't work email the chairman direct:

I'm just a troublemaking nutter living on "the last two rocks before you step off the planet". I can safely be ignored. A groundswell of queries from multiple chapters cannot.

Well Done

I hope you get satisfactory answers to those questions!

Now! Now!


Beer coaster maths is great but very rarely accurate, and certainly not after a few beers! Have you been drinking again?

itSMFI is a company which has to publish its accounts at the UK's Companies House like any other UK based company. These accounts are a matter of public record and they are be freely available to anyone wishing to pay Companies House the fee for getting hold of them. This is true of itSMF UK and any company based in the UK which is probably why, we have the fairest legal system in the world.

We shall likely put these financial reports onto the website in future, together with the Chairman's report to which you point and this should save you the £10 or so, fee that Companies House charges for producing them for you.

But just to let you know in 2006 itSMFI's turnover was in fact £77,098 (split roughly equally between Global membership and Individual Chapter subscriptions/levies) with administrative expenses of £20,161 and an additional income of £86 for Bank interest. It actually made a small surplus before tax of £57,023. No dividends have been paid and surpluses were planned into itSMFI's 2007 business delivery.

The 2007 recently independently audited accounts (which are going through the process of approval before submission to Companies House as they must - and so, are not a yet a matter of public record) looks like showing a small operating loss.

This seemingly up and down pattern is natural for this type of organisation.

Yours in ITSM!


I reckon my numbers are pretty close for the current year

Perhaps. But I reckon my numbers are pretty close for the current year as the 5% tythe really cuts in, V3 sales take off, new revenue streams come on line, and the global members pay up.

And absolute figures aside, I still think we should see the breakdowns of how it came in and how it went out.

My numbers will be $120k too high for this year

My numbers will be $120k too high for this year since there are now five global members instead of eight. So a million might be a stretch, but half a million is still probable. So I still stand by the original giuesstimate of "half a million to a million dollars"... assuming everyone pays up.

Duh make that six

there are six global members. Did i see five or did I imagine it...?

So the figure is only out by $80k, not $120k. As a reader has pointed out that pales into insignificance next to the sponsorship funds being handled for the V3 rollout.

Add in five sponsors at over a hundred thousand dollars each

No they won't. Turnover will far exceed a million. You have forgotten the V3 rollout. Add in five sponsors at over a hundred thousand dollars each. I imagine they as much as anyone will be looking for better financial reporting this year!!!

We need more

Where is the last audited itSMFi financial statement? Why isn't it posted?

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