Funding Sources
Establish sources of IT financing, which may include a centrally allocated IT budget, allocations from other business units, and external sources (for example, joint ventures, industry consortia, vendors, suppliers, clients, and so on). Understand the costs of financing and the expected benefits to be derived from each funding source.
Improvement Planning
Practices-Outcomes-Metrics (POM)
Representative POMs are described for Funding Sources at each level of maturity.
- 2Basic
- Practice
- Obtain financing from a single internal source (e.g. central allocation to IT through the organization's financial planning cycle).
- Outcome
- There is a central view of the funds allocated to IT.
- Metric
- % of IT operations funded through central allocation.
- 3Intermediate
- Practice
- Obtain financing from multiple internal sources, including central allocation and some business unit financing — for example, for specific projects.
- Outcome
- Because financing is internal, the cost of funds is often linked to hurdle rates.
- Metrics
- % of IT operations funded through central allocation.
- % of IT operations funded through business units.
- % of IT services funded through chargeback.
- 4Advanced
- Practice
- Obtain financing from multiple internal sources, including central allocation and a broad range of alternative business unit financing, as well as financing from some external sources.
- Outcomes
- For each initiative the costs of financing (e.g. opportunity cost, hurdle rates), and the anticipated benefits to be derived from these funds, are known and understood.
- A broader range of initiatives are supported through the availability of some external sources of finance.
- Metrics
- % of IT operations funded through central allocation.
- % of IT operations funded through business units.
- % of IT operations funded through external sources.
- 5Optimized
- Practice
- Investigate financing from multiple sources, both internal and external.
- Outcome
- Funding allocation taps into multiple sources of finance to ensure capital cost efficiency.
- Metrics
- % of IT operations funded through central allocation.
- % of IT operations funded through business units.
- % of IT operations funded through external sources.