User:CostCustodian/ITCostTransparency

IT Cost Transparency is a new category of IT Management software and systems and that enables Enterprise IT organizations to model and track the total cost to deliver and maintain the IT Services they provide to the business. IT Cost Transparency solutions integrate financial information such as labor, software licensing costs, hardware acquisition and depreciation, data center facilities charges, from general ledger systems and combines that with operational data from ticketing, monitoring, asset management, and project portfolio management systems to provide a single, integrated view of IT costs by service, department, GL line item and project. In addition to tracking cost elements, IT Cost Transparency tracks utilization, usage and operational performance metrics in order to provide a measure of value or ROI. Costs, budgets, performance metrics and changes to data points are tracked over time to highlight trends and the impact of changes to underlying cost drivers in order to help managers address the key drivers in escalating IT costs and improve planning.

IT Cost Transparency combines elements of activity based costing, business intelligence, operational monitoring and performance dashboards. It provides the system on which to implement ITIL v3 Financial Management guidelines and is closely related to IT Service Management.

While specific solutions vary, capabilities can include:


 * Simplified or automated collection of key cost driver data


 * An allocation or cost modeling interface


 * Custom reporting and analysis of unit cost drivers, including CIO dashboards


 * Ability to track operational metrics such as utilization, service levels, support tickets along with cost


 * Bill of IT reports for chargeback or service allocation to Lines of Business


 * Forecast and budget tracking versus actual and over time


 * Hypothetical scenario planning for new project ROI analysis


 * Cost benchmarking against industry averages or common metrics

Analysts' Take
''“Globalization, consumerization, new competitors and new service models are radically ‘changing the shape of IT’. IT leaders must develop greater transparency into the costs, utilization and operations of their IT services in order to optimize their IT investments and evolve from being technology managers to being stewards of business technology.”''  -- Barbara Gomolski, Research Vice President, Gartner

"By making these costs transparent, the IT organization can fundamentally change the way business units consume IT resources, drive down total enterprise IT costs, and focus on IT spending that delivers real business value. The CIO who leads this change can usher in a new era of strategic IT management--and true partnership with the business." --Andrew M. Appel, Neeru Arora, and Raymond Zenkich. McKinsey & Company.

IT Cost Transparency Articles
How to cut IT costs without Hemorrhaging

Scalpel or Cleaver: CIOs Can Show CFOs the Light

Unraveling the Mystery of IT Costs

Can IT Spending Shift from Reactive to Proactive?