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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
- Bill of IT - Detailed cost breakdown. Allocate like electricity.
- 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,
- 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.
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
- xxx
- xxx
8. Companies
9. Links
- xxx
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