True Cost of IT

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1. Background
2. Acronyms/Definitions
3. Business Case
4. Benefits
5. Risks/Issues
6. Success Criteria
7. Case Studies
8. Companies
9. Links

1.Background

• IT is no longer a doer of services.  Transforming into a very critical component of the business unit
• Most companies spend 2 to 3% of their revenues on IT, financial service firms, spend nearly 10%.   It is estimated that 10 to 25% of these expenditures are “wasted” due to: 
• Uncontrolled business unit IT related spending. 
• Shadow IT, especially related to Cloud, Big Data and Mobile 
• Underused / improperly deployed resources / Lack of understanding where and how IT assets are deployed. 
• Business management and IT have difficulty on proper allocation strategy of IT costs  Key questions commonly asked include: 
• Are we spending too much or too little on IT? 
• Is there a way to reduce IT costs without affecting our business operations? What actions could be taken to contain future IT expenditures and assess ROI and TCO

2. Acronyms/Definitions

1. Bill of IT - Detailed cost breakdown.  Allocate like electricity.
2. Cost Allocation - By properly identifying, measuring and allocating costs to business units based on a usage model for example, it can be determined if IT assets are being under utilized or IT assets spend is appropriate on type of assets being purchased,
3. Maturity Model - xx

3. Business Case

• Understanding the cost of IT services, or expressing the cost burden placed on IT by various business units, inevitably leads to better decision-making around exactly how to assign the costs from one category or group to another.
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4. Benefits

• Minimize IT Costs
• Maximize Business Value

5. Risks/Issues

• Lack of IT cost transparency / connection to the business unit (BU) for IT costs accumulation and allocation 
• “Hidden” costs incurred/managed outside of IT:
  Shadow IT, costs incurred by BU not known by IT or CFO 
• Limited correlation between IT costs and derived business value 
• Disproportionate spending on older applications and infrastructure 
• Lack of an agreement on a set of “rules” for allocating IT spend.
• Cloud - Some organizations are moving to the cloud without knowing they are moving to the cloud

6. Success Criteria

1. xxx

7. Case Studies

• xxx

8. Companies

1. Cloud Transformation & Security Solutions Hong Kong

9. Links

1. xxx