Who Is Paying the Bills?

A Cutter survey reveals that a healthy percentage of IT departments don't have a plan for managing their tech funding

Arlington, MA  October 22, 2002  According to a recent Cutter Consortium Executive Update, more than half of IT departments (56 percent) have explicit charging processes, but 44 percent do not.

Steve Andriole, a Cutter Consortium senior consultant who conducted the survey, asked, given the costs involved, how the 44 percent manage technology funding. "How do you determine funding responsibilities? And how do you determine how to pay for infrastructure, applications, [research and development], and ongoing technology management? These are huge issues  especially when you consider that the United States spends more than one trillion dollars a year on hardware, software and services."

According to Andriole, companies should first define their processes about who pays for what and then identify the governance around these processes.

"In a decentralized organization," said Andriole, "infrastructure is often maintained by a central technology group that charges users for what they actually use as well as some general and administrative expenses for running the railroad. Applications are often controlled by lines of business but, in a well-governed organization, are around some enterprise-specified applications architectures."

Sixty-four percent of the companies surveyed report their organizations have confusing or ambiguous technology-charging strategies and oftentimes fighting about whom should pay the bills.

"Clearly, how we fund technology applications, infrastructure and ongoing support is a major issue that must be addressed by well-defined processes and strong, consistent discipline. If either is missing, funding processes will remain confused and ambiguous," concluded Andriole.