Accounting Policy and Cost Recovery Model
Develop policies for calculating costs associated with the consumption of IT services, and develop a model for cost allocation and recovery.
Improvement Planning
Practices-Outcomes-Metrics (POM)
Representative POMs are described for Accounting Policy and Cost Recovery Model at each level of maturity.
- 1Initial
- Practice
- Use an ad hoc accounting model on a best endeavour basis.
- 2Basic
- Practice
- Establish a basic accounting and allocation model.
- Outcome
- Basic resource management and IT accounting can track IT assets, expenses, and capital expenditures.
- Metric
- % of IT spend categories covered by accounting model.
- Practice
- Make basic IT costs visible for some business units.
- Outcome
- Chargeback can be introduced at the BU level.
- Metric
- % of IT spend covered by chargeback.
- 3Intermediate
- Practice
- Align with the organization accounting model defined by Finance.
- Outcome
- IT spend is aligned with planned high-priority business initiatives.
- Metrics
- IT Productivity: [Cost per standard IT output].
- % of IT costs charged back to business by projects and services.
- 4Advanced
- Practice
- Embed the IT AA model in the cost model of Finance and other business functions.
- Outcomes
- The AA model is fully reconciled with business/Finance cost models.
- More sophisticated accounting practices e.g. capture of software development labour capitalization are in place.
- Metric
- Relative Value Added: [IT attributable Value Added per IT Resource Unit (VAITRU)].
- 5Optimized
- Practice
- Optimize the IT accounting model to enable business units to fully control their costs, i.e. volume and quality.
- Outcomes
- Business units can quantify, evaluate, and compare the value provided by IT.
- Business units are able to steer IT service usage based on the required quality/volume and price.
- Metrics
- % of relevant costs directly charged back to BUs.
- Absolute Value Added: [IT attributable Value created (ITVA) per IT Resource Unit (ITRU)].
- Net Present Value (NPV) of IT projects.