10 Advantages of IT Cost Transparency

 
 
By Karen A. Frenkel  |  Posted 08-12-2014 Email Print this article Print
 
 
 
 
 
 
 
 
 
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    Where's the Money?
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    Where's the Money?

    Cost transparency provides a view of where money is actually being spent throughout the business, so IT leaders can use that information to make accurate decisions about current allocations and future investments.
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    Cost Transparency Means More Leverage
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    Cost Transparency Means More Leverage

    When IT leaders assign distinct costs to the services they provide, they can more confidently communicate the reasons for those costs and their value to business counterparts.
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    Beyond Numbers and Data
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    Beyond Numbers and Data

    Numbers and data alone do not motivate decision-makers to act. Cost transparency provides a granular look at redundancies, waste and inaccuracies.
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    Replace Assumptions with Facts
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    Replace Assumptions with Facts

    Facts drive conversations about cost and decisions, rather than emotions and the perception of cost. Cost transparency helps clarify total cost, factoring in elements like labor and assets, which can have a big impact on numbers and ultimately on decisions.
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    Less Debate, Less Resistance
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    Less Debate, Less Resistance

    Fact-based conversations help prevent stonewalling because stakeholders have shared their understanding and belief in drivers of the relevant costs, so a more open and honest conversation can take place.
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    Proactive Change in Behavior
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    Proactive Change in Behavior

    Because cost is regularly reviewed and trended, executive partners can see how their teams and employees affect consumption and therefore costs. That leads to greater buy-in and engagement.
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    Initiatives Kept on Track
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    Initiatives Kept on Track

    Teams throughout the business can align investment with goals and proactively manage budgets and spending.
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    Gaining New Perspectives
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    Gaining New Perspectives

    Cost transparency drives innovation because it helps foster new ideas and helps executives get out of ruts through open conversations about current investments and future goals.
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    Prompt Financial Analysis
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    Prompt Financial Analysis

    Because cost transparency speeds up the traditional process of financial analysis, decision-makers spend less time waiting for data. The result is the latest cost data is available on-demand.
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    Catalyst for Change
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    Catalyst for Change

    Cost transparency uncovers areas of spending previously ungoverned or unaccounted for by IT. These new insights can prompt positive change throughout an organization.
 

A new niche—technology business management (TBM) software—is emerging with an emphasis on cost transparency to provide enterprise IT organizations with useful data and insights. Because TBM software offers detailed, granular data about the cost of providing applications and services, it enables CIOs to make faster, fact-based decisions about purchases. The goal is to help CIOs accurately and openly discuss budget allocations with the company's business side. Cost is the most common factor across the majority of IT budget decisions, and when IT spend data is exposed via cost transparency, IT departments can make educated and powerful decisions because they know where the money is spent. "Businesses must first look at which decisions are influenced by cost transparency and then how organizations use cost information in their decision-making," says Dave Wilt, senior director of products at Apptio, Inc., one of the players in this new niche. Once the business and IT departments are on the same page regarding the cost of running IT, they will ultimately be able to better evaluate strategies for innovation.

 
 
 
 
 
Karen A. Frenkel writes about technology and innovation and lives in New York City.

 
 
 
 
 
 

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