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Key sentences against the thicket with the IT costs

Trigonum outlines the elementary conditions for a lasting transparency with the IT expenditures

(Hamburg, 21.02.2008). According to a study of the Hamburgian consultancy Trigonum Ltd., the situation concerning the transparency of the IT costs in the enterprises very often is quite bad. Two of five of the companies call them dissatisfactory; every sixth person in charge of the IT evaluates them as being in need of improvement.  "The IT as a black box with its costs is less accepted than before", judges Trigonum manager Peter Bodino. Therefore, the consultant has compiled key sentences for a better clearness of the IT expenditures:

To develop more enthusiasm for economic aspects and take them into consideration while making a decision: Most and above all critical discussions in respect to the economic efficiency of the IT suffer from the fact that typically only felt statements can be made about the actual costs for technology, staff or external service providers. However, where concrete expenditures originate, they can be shown in concrete figures. The fact that this subject attains in practice not enough meaning, results above all, that IT managers see themselves primary as an engineer of information and only marginally as an business economist. It is a matter of shaking the self-image of the person in charge, because without a basic economic positioning also other measures for the optimisation of the cost transparency can only unfold with a poor effect.

The organizational processes and responsibilities are clearly to be determined: IT costs can only be analyzed in the extent as suitable data have been determined.  Because they are seldom centrally available, it has to be determined concretely, who makes which information available, in which rhythm and in which form. Also a responsible person acting as a recipient and a responsible person for the further processing of the data has to be appointed. These procedure rules must be very binding on all parties, so that the organizational effort remains restricted.

Definition of IT products or services as a raster for the cost analysis:

Transparency is a question of the order. Therefore, it has proved itself in practice to carry out a structuring according to IT products/services (workplace, SAP, email, other applications etc.) and according to the type of costs - for example hardware, software, personnel expenditure, external services.  By additional subdivisions a general view of the IT can be created in this manner, with the factors relevant for costs and benefit evaluation, within the required degree of differentiation. And if this raster was compiled once, it can be continuously updated.

Inquiry of all expenditures and costs which originate in connection with the realisation of the products / services: A precise look at the IT service costs often leads to very astonishing results, because in a concrete analysis suddenly expenditures emerge, which were rarely consciously perceived or presented in such an unexpected scale. Therefore the principle must count, on behalf of an informative economic evaluation, to show the cost structures extremely sophisticated by not saving on details. In particular it is necessary, to identify the complementary expenditures precisely that are associated with the IT services. Also the existing outsourcing and service contracts are to be examined carefully, because they contain according to experience a fund of insufficiently estimated costs.

A modern and efficient cost management requires the support of adequate tools: The presentation of the expenditures for staff, products and services are already very extensive anyhow. But if other analysis dimensions are taken into consideration, as for example the strategical meaning of certain investments, the cost-benefit ratio etc., the cost management threatens to sink into the thicket of the figures and evaluation parameter. Specialised tools support with the essential tasks, even if their functionality and analysis methodology are not optimally conceived. At least they offer assistance to the systematic approach and clear arranged presentation of the key data. At the same time such tools diminish the expenditure.

To determine the cost level via regular benchmarks or tenders to derive potential savings from it:

Nothing is more dangerous for the economic efficiency than the custom. Indeed, if orders are always placed with the same suppliers and service providers, very often for quality and flexibility reasons, the cost efficiency might fall behind. Therefore, regular comparisons must be installed as natural processes, so that no secret cost spirals will occur. In this regard appropriate actions are tenders about which a practicable orientation guide can be generated to actual market-oriented economical dimensions. If it is about internal originating costs, systematic benchmark projects are required, which should at least exemplarily carried out. However, on this occasion, is to be paid attention to the fact, that they have no alibi function, but pursue a seriously applied cost and efficiency comparison.

TRIGONUM GmbH
Notkestrasse 11
22607 Hamburg
Germany

Tel: +49 (0)40 3199 1618 0
Fax: +49(0)40 3199 1618 8

info@trigonum.de

www.trigonum.de



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