What Is a Bill of IT and Why Is It Important?

4 minute read

Team ComSci

Technology investments touch every aspect of a business. Automation and other performance-improving technologies and services are key to driving efficiencies and innovation within the organization.  A bill of IT is another tool that helps improve efficiencies.

Unfortunately, the people in budgeting and accounting often do not have a full appreciation of the value of technology or its role within the company. Worse yet, when the justification for IT services isn’t made clear or the value of the technology isn’t properly articulated, the CIO may find the IT budget shrinking.

Therefore, it is critical that the IT department continuously communicates the value it brings to the organization. The bill of IT helps demonstrate the value of IT, in a way the business units can understand. It indicates the cost of IT services consumed by each business unit, for the purpose of chargebacks or showbacks.

Bill of IT: An Invaluable Business Tool

A bill of IT is a bill of materials that clearly and transparently explains the cost of IT services and devices in a way that’s easily understood by business end-users. It presents a clear, detailed list that shows the associations between each IT asset or service.

Organizations use a bill of IT to invoice the business units for services used. If the organization issues chargebacks, money actually changes hands, with the business units paying the IT department for services. In the case of showbacks, money doesn’t change hands but the business are made aware of what they are using and how much it costs the company. Whether the company issues chargebacks or showbacks, in both cases the bill of IT helps increase awareness and accountability among the business units regarding the IT services they use, and often result in reducing unneeded services.

The bill of IT can include the following for each type of service:

  • Cost – the price per service
  • Price – the predefined unit rate
  • Budget for its use – full cost per year or other reporting period
  • Quality of the service – uptime metrics, support response times, and other service metrics
  • Benchmarking – how is the service used in comparison to internal and industry benchmarks

Presenting an un-detailed IT budget or balance sheet might lead decision-makers within a company to think that IT is overspending on expensive or unneeded hardware, software, and services.

For example, if the IT manager has purchased and installed a top-grade email server without explaining why, then people might think it is money wasted. On the other hand, if business units are shown a Bill of IT that clearly highlights the quality of service (e.g., increased uptime or tighter security measures), along with a measure of how much more it would have cost to use a cheaper server, suspicion goes away.

By implementing a bill of IT, IT managers enable their companies to:

  • Empower business units to change inefficient behaviors, such as removing duplicate types of applications and unused devices
  • Develop better, more responsive budgets that better serve the organization’s growing needs
  • Refine IT policies

Beyond the Bill of IT

Upland ComSci IT financial management software keeps track of all your assets and services, and displays them clearly – justifying the value of your IT investments. In fact, more than a bill of IT, ComSci generates a bill of shared services. It includes not just IT devices, hardware, and services but also the relative cost of internal goods and services each business unit consumes, such as office space, administrative services, legal services, marketing, and HR. ComSci provides not only IT cost transparency, but also cost transparency of all services used across your organization. In that way, a bill of services promotes dialog, trust, and useful change.

Learn more about ComSci: The IT Financial Management Software.

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