IT Executives have over leveraged Spreadsheets to run the business of IT.
Recent industry analysts research shows that IT Executives have over leveraged Spreadsheets to run the business of IT. This has caused a myopic view of costs and investments. The problem is that the labor intensiveness and the underlying complexity of Spreadsheet-based IT financial analysis has caused cost allocation methods and investment decisions to be overly complex or too simple.
For example, many IT organizations are continuing to apply a single top-down allocation method for the chargeback or showback of IT costs to business units. These organizations are typically allocating IT costs based on:
- head count,
- percent of revenues, or
- rationalize IT costs using arbitrary weighting factors.
The value of Spreadsheet-based methods is thought to be simplicity. However, these simplified methods are counter-productive to the mission of good IT financial leadership, which is to encourage, if not drive IT cost consciousness.
These methods do not provide business leaders a path to be better financial stewards. They promote the belief among business leaders that they are paying more than their fair share for IT services, or it encourages excessive IT service use among others who are getting a free ride.
Watch this 4-minute video to learn how other companies are modernizing their IT cost allocation methods and eliminating their dependence on Spreadsheets.