Most large organizations and an increasing number of medium-sized enterprises have introduced various methods of assigning IT costs to business activities or business units. However, often the method employed fails to deliver much value. In many cases, the overhead incurred in calculating recharges is a waste of resources. Enterprises should be cautious before adopting a recharge method unless it aligns well with their objectives, and is really worth the effort.
Determine the Objectives
Info-Tech's 2007 IT budget survey indicates that IT expenses consume an average of 6% of revenues. Business leaders want to know where IT incurs cost within their enterprise. Some want control over where funds are spent. Some enterprises require annual re-justification for IT expenses.