The cost of IT shared services
Shedding light into the black box
When asked what’s included in their allocated information technology (IT) costs, many business unit (BU) owners are unable to answer–or even explain–what they are paying for. How would you answer this question?
What are you paying for?
This question is being posed more frequently as many organizations face increasing global competition and economic uncertainty, resulting in the need to reexamine operating models with a focus on better understanding operating costs and the value that support services bring to an organization.
In our experience, consumption-based costing models that allocate costs using a catalog of services provide BU owners with more insightful information than traditional allocation models that allocate costs based on static or generic sets of metrics. However, not all service catalogs define services in a way that’s meaningful for BU owners to understand. Further, many organizations struggle to prepare consistent company-wide cost allocation reporting in sufficient detail to support strategic decision-making.
By improving the transparency and relevancy of IT shared services cost information, IT and operating divisions can work together to formulate equitable allocations and foster accountability for the cost of IT shared services.
Cost transparency requires clear communication
Download the report to learn more about improving your organization's IT shared services cost reporting, including recommended practices to:
- Establish more equitable cost allocations
- Improve the transparency of IT cost information provided to businesses using IT services
- Provide business units with more relevant and meaningful information for decision-making, including decisions related to cost reduction strategies or IT investments
- Effectively roll-out allocation changes across an organization and promote accountability