Providing Affordable IT Management to SME's Creating a financial budget
The basic principles of ITIL service management are based around two key objectives:
1) Increase system stability and availability
2) Reduce the cost of IT services
For most of these blogs, I have been focused on the first objective, but it is probably worth starting to explore the second in more detail. Now you could say its easy to reduce the costs of IT services – remove any services that you have not used for a while or don’t think you need. Example’s could be network support costs or the application support for a service that you have paid each year for the last 3 years but have never actually used. These could be good decisions, but before we get to that decision making process we need to understand a few basic things:
1) What do we spend on IT services at the moment
2) What is our projected spend for the future (including planned upgrades etc)
3) What services do we need to keep our business going
4) What suppliers and costs are available to deliver this level of service
Once we have these four pieces of information available, we can then start planning with a view to reducing our IT costs.
So lets focus on part 1, what do we spend on IT services at the moment? I am going to hazard a guess that this is not going to be an easy question to answer. Unless you are running some form of finance package or keep detailed accounts you may wish to work off of some generic groups. ITIL proposes that IT costs come from the following areas:
Hardware costs - physical IT hardware assets
Software costs - physical IT software assets
People costs – cost of people who manage or administer IT services
Accommodation costs – cost of any “environmental requirements, could include power, light etc External
Service costs – cost of any third party involvement including support contracts, license fees, subscriptions
Transfer costs – the cost of any other goods or services used for the provision of IT services which are generate internally within the company
The starting point would be to list all of these as a column on a spread sheet and then over a period of time (and referencing any documents, ledgers or receipts you have), expand on the area showing the service name, the frequency and the cost. In effect you are creating the starting point of an IT budget. If you would like more information on creating a budget as a starting point for you IT cost reduction program please email us asking for "FM1 - Creating an IT budget"
22nd May 2009
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