Understanding IT Costs

A collaboration of SusteIT and the University of York

My Involvement

• Heidi Fraser-Krauss new Head of IT Jan 2012• Liverpool model• Information sought - cost for services and

justification for SLA charge

What Information Did I Need?

• List of services (what are our services?)• List of Departments(how do you define a

department?)• Collect the costs(what costs?)• Allocation of costs(what basis?)

The “easy” costs

• Staffing – source Business Objects Report which is used at York for forecasting staff costs and budgeting – flows through from Resource Link

• Recurrent contract costs- my spreadsheet details for monthly prepayment purposes

• Overhead cost – use TRACK

The “hard” costs

• Capital – problem at York - the central fixed asset register is not reliable

• Department – does not have a detailed fixed asset register• Request from Central Finance for the annual depreciation charge

goes unanswered

How to map IT costs to a service

• I could identify the costs• Some costs could be easily and directly attributed to a

service and some costs could not• Costs that do not map directly what do you do with

these?• What about Infrastructure costs that are required across

a variety of services? ( e.g. a server is multifunctional)• How do you allocate Infrastructure (what is

Infrastructure?) across services

Conclusion

A Service Costing Model initiative needs to be driven and developed by an IT technical person who

1. Understands and can define Infrastructure2. Knows the component IT elements needed to deliver services3. Knows what proportions of this defined Infrastructure to allocate across

services

Once the model has been produced the finance person can populate it with the relevant costs