Johannesburg, 19 May 2016
It is a fact that most businesses have very little idea what their IT budget is actually being spent on. This is where cost transparency (CT) comes into the picture: it offers organisations the ability to create visibility and understanding around the costs and volumes of their entire IT product and service portfolio, so that the business can make informed and fact-based strategic and tactical decisions around its IT investments.
CT effectively takes the total cost of IT - including your infrastructure, people and time allocations, data consumption, licensing and other, similar costs - and encapsulates this in an IT catalogue, which delivers an itemised list of IT products and services, including price and volume information with benchmarking against prior periods, budgets and industry standards.
These costs can be assigned to specific business units, enabling each unit to drill down to the exact source to which a specific cost is attributed. This provides them with the platform from which to make the right decisions around their IT investments, says Magic Orange.
This may sound a lot like Business Intelligence (BI), but is, in fact, vastly different. BI tools extract data from many systems and then deliver this information to the user. While CT is similar in some respects, it offers a far deeper understanding of the information than is possible through using BI alone.
CT enables a much more granular view of the information than BI, as it focuses on understanding the relationship between different activities and entities within the business, as well as all the costs and drivers associated with these. It takes into account not just the direct relationships, but even the more oblique connections, so that the true cost and value of every aspect of IT can be thoroughly understood.
In effect, where BI offers you the ability to extract and display information, CT extracts, configures, processes and then displays. These costs can be assigned to specific business units, enabling each unit to drill down to the exact source to which a specific cost is attributed.
Ultimately, the CT tool is designed to help businesses to reduce, consolidate and standardise expenditure. After all, if you are able to effectively unpack the cost of IT, you can use this knowledge to drive improved savings. CT is designed to give business access to the levers it needs to make truly informed IT decisions, unlocking greater value from existing IT investments and delivering increased savings with regard to future investments.
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