The purpose of this presentation is to illustrate how to calculate IT costs in a scientific way and not guessing. IT financial management is one of the most complicated subjects to address. From a business perspective IT financial transparency is usually a pain.
The start of the presentation was a bit boring and I was about to quit. However it became more interesting and I moved forward.
The presentation introduces the importance of understanding the Business Blueprint for IT which is built from the Service Catalog (both Business and Technical ) and the understanding of the Value Network. Once you’ve the Business Blueprint for IT you can add a financial layer by assigning the cost related with each item/component in the Blueprint.
Compiling the Business Blueprint for IT helps to give insights regard the following in one model:
- Budgeting
- Development
- Delivery
- Recharging
- Quality
However, the subject is still not easy and it should be very well investigated, especially when it comes to calculate the costs which should include:
- Overhead costs: rent, administration, HR, electricity….etc
- Asset costs: servers, routers, machines, equipments…etc
- Project costs: Project management cost, projects implementation…etc
- Labor costs: salaries, per diem, overtime…etc
The presentation also discussed how to automate the process of collecting the information and how to report and present them.
The last slide was a very good conclusion as it summarized it all in a step-by-step approach:
- Identify infrastructure costs from a service perspective
- Measure the cost of managing and transforming IT by centralizing and automating resource management and time reporting
- Identify cost-drivers and allocate the cost of all services you delivery fairly
- Define the business value of services and provide business units with understandable options, such as gold, on-site support, high performance 24/7
- Compare costs and business values to identify value adding activities
- Determine what services to operate and what services to buy
Finally, one of the reasons why I liked this presentation is that what I do to enable IT financial transparency and it matches the process suggested by an ITSM veteran and Principal Consultant at CA.
Ala' Yasin Abuhijleh 