Determining the true cost of IT

Determining the real cost of IT projects and services is important for getting budget approval from company execs. But doing so has been a big challenge for IT managers.

Here are some steps IT can take to get closer to figuring out true costs, according to a recent article on CIO.com:

  1. Look at all cost elements — The cost of any IT service is a combination of the costs of staff labor, server use, applications, power consumptions, etc. IT managers can come up with a formula to account for all costs that go into each of their department’s projects, and then plug in numbers to get specific estimates.
  2. Come up with a common terminology — To get an idea of real costs and properly convey that information to people outside IT, everyone in the company must be on the same page regarding terminology.
  3. Add business skills to the IT department — To begin thinking of IT services in terms of their true costs, it may help to add IT staffers that also have business experience, such as accounting skills.

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