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How
Much Did We Really Pay for That?
The
Awkward Problem of
Information
Technology Costs.
Frank Bannister, Department of Statistics,
Trinity College, Dublin, Ireland. Frank.Bannister@tcd.ie.
Patrick McCabe, Department of Business Studies,
Trinity College, Dublin, Ireland, Patrick.McCabe@tcd.ie.
Dan
Remenyi, Visiting Professor,
Trinity College, Dublin, Ireland, Dan.remenyi@tcd.ie
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ABSTRACT |
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Surprising little attention has been given to the tricky issue of
IT costs and this paper takes a speculative view of some of the key issues
involved in this demanding field of study by recognizing that there are two
sides to any IT evaluation: the cost of delivery and the benefit/value received.
In much IT evaluation, cost is taken as a given without much attention being
paid to the metrics and methodologies used to derive it. However the cost of IT
is a complex and contentious issue which presents the would be evaluator with
several difficulties. The difficulties presented by IT costing including
questions of cost identification, data capture, overhead allocation, soft costs,
accounting conventions and dis-benefits are explored. The ongoing debate on the
value of the total cost of ownership concept is discussed. An IT cost reference
model is proposed and it is argued that there is an urgent need for greater
emphasis on understanding and accurate tracking of true costs not just as a
technique for ensuring IT value, but also as a means of optimising individual
and/or organisational investment in and use of IT. |
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