My point here is that the Cost Management area within the old ITIL structure is positioned Copyright © The Art of Service.
Page: 6 already made the decision that it is necessary and should be deployed.
Lastly, let’s bring in ROI.
ROI (or Return on Investment) is a measure (in percentage of costs spent) of how much payback we will receive in deploying our IT service at any point in time.
It is used primarily to justify that the IT service is viable financially.
I will say this now and again, that this ITIL Costing Methodology is not about ROI – but about developing a costing method that will work with any IT service and that can be reused over again.. The New ITIL Financial Management Position In the diagram ( IT Service ManagementProcess Model ), we now have a much better and clearer relationship understanding of how the Financial Management area is fully incorporated under ITIL.
The financial management area, including costing, is both an integral element of both Service Delivery and Service Support.
Costs are no longer just burdened by IT but now can be spread across (or charged back between both IT and IS user groups).
Now Financial Management clearly sits in the middle of the process flow is not just associated with Service Delivery.
Now we have full picture of the importance of ITIL Financial Management.
Understandably, they have been several ITIL areas we have glossed over, but one concept is important to remember in our efforts.
It could be place onto a stone tablet for our IT Best Practices, but it’s stated simply as: “ If you can’t measure it, then you can’t mange it.” Orignal Author Unknown. It a simple measure of costs, given the ITIL arena of disciplines that can be used for any simple or complex IT service and TCO is a significant but not the main portion of our picture.
So, a lot more information and detail will follow to reinforce this concept. Part of this concept goes to the heart of Customer Relationship Management in the ITIL process flow.
Our customers are both internal user groups and outside supplies, channel partners and re-sellers of our products.
Clearly they can’t do this without some direct involvement with the Financial Management area, because it has its links into overlapping areas of both Service Delivery and Service Support and the ability to measure each.
As an example, our Help Desk / Service Desk is in the Service Support area, but Monitoring and providing current Technology Copyright © The Art of Service. Page: 7 equipment and value is in the Service Delivery side.
Therefore, to show this in a slightly new form, I have included a graphic (see below) which shows this view from the IT Customer affect our IT services over the course of our analysis period.
We will put this all together and build a sample Costing Catalog then extend its value by describing the Yearly Unit Pricing value.
Finally, we will describe how to handle non- Relationship Management position.
So now, we need to put some substance behind our new method of costing in these important area. ordinary costs such as outsourcing and sub-services.
These are all defined, explained and used in our example of building an ITIL Costing Catalog. Our Road Map Ahead Let’s look at a short road map.
The sequence of steps in building this new methodology using ITIL’s Financial Management is: First we will introduce the concept of both Service and Costing Catalogs to define our service.
Then we will see how costs can be associated our major Common Costing Areas by using their specific CIs.
Later we will introduce the Cost Allocation Matrix which is used to distribute common costs evenly.
We will then introduce the concept of User group population numbers and how they
Read more about ITIL Process Flow : Part of this concept goes to the heart of Customer….: