Budgets for IT : The Lever for Quality and Business Impact, Part 2

by Robert J. Benson, Tom Bugnitz, and Bill Walton

In a previous Advisor, we stated that "the IT budget process and the resulting budget should be an exercise in developing and refining an accurate cost view of every activity that IT undertakes, not just an exercise in setting and acquiring resources for the coming budget period" (see " Budgets for IT: A Critical Factor for IT Management, Part 1," 3 November 2004). Whereas most budgets use categories such as salary, hardware, software, and so on, we proposed establishing a budget that instead uses IT activities and services as budget categories, and determines the cost to support them and by extension supports the business processes they relate to. Finally, we proposed focusing on the consumer of the IT services (the demand side) and what it costs to provide the "consumed" services, rather than IT (the supply side) and what it costs to run IT.

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Budgets for IT : The Lever for Quality and Business Impact, Part 2 8 December 2004