IVI Framework Viewer

Accounting Policy and Cost Recovery Model

A2

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.