IT Cost Allocation to Business Services

The basis of IT Cost allocation is the Architecture Graph
SAMU can visualize the entire architecture, including business services, applications, data, and infrastructure based on a data driven approach using live data from the repository. This visibility enables stakeholders to understand the interdependencies and relationships among different components in the architecture. This network of architecture components can be used to calculate the cost distribution of one component to other components.

Distribution of Collective Costs to Business Units/Services
In a complex IT architecture landscape, there are many collective cost components that are not directly associated to a give Business Unit or Service but are shared between them. These cost components are often quite significant. For example, Data center costs, Enterprise license agreements with vendors, expensive storage solutions, integration hubs, etc. If we are able to identify and split these costs using algorithms to the relevant business services, this can to lead to efficiency gains and better optimization of IT assets.

Cost Allocation Algorithms
The cost distribution is calculated using an algorithm for the purpose of mapping cost components to objects in the repository. These costs then can be spread across all the related components and the ratio can depend on many factors (usage, memory, database size, etc.). If we do this in a recursive and repetitive way, all common cost components are distributed across the entire graph allocating fragments of the original cost to other directly and indirectly impacted components. Because the business services are the last components considered in this graph, the cost fragments are shown for all of these.

The Cost of Non-transparent IT
By mapping costs to Enterprise Architectural components, the IT Department can justify the money being spent on technology by demonstrating to the Business side of the organization how much their business unit is costing the organization. With the help of reports, IT spend can be better allocated and aligned with business strategic initiatives. Areas where more money should be spent can identified, while others where too much is being spent on non-revenue generating services can be reduced or even discontinued. The overall transparency of the entire organization will increase, and business and IT can be better aligned.