IT Services Cost Calculations

Corporate managements often have little overview of where their IT funding goes, of what services they can obtain, and of the quality of those services. IT department managers find it difficult to show that their IT funding is used efficiently to provide the best quality service. We can help resolve this situation by imposing IT service rules of engagement and by establishing monitoring systems to see what is going on. The charts and tables produced will make your IT services more transparent and will help your IT Manager become an effective partner to corporate management.

With ALVAO you won’t have to deal with the most common issues

The IT Director (CIO), Finance Director (CFO) or even the Chief Executive Officer (CEO) are often left wondering:

  • How to set the right budget for IT?
  • How to optimize use of the IT budget?
  • Should outsourcing be used?
  • How to set the right level of IT services?

They do not want to waste their money and they would like to draw on the IT budget as transparently as possible.

ALVAO has made cost allocations simple

IT costs are often resolved by allocating funds to individual corporate departments as a percentage of turnover or profit. This form of funding is neither fair, nor does it motivate teams to work economically. The solution is to define IT services and their costs clearly to your business (e.g. PC, notebook, email, network connectivity, access to ERP, etc.). These services can then be used to calculate costs accurately based on real-life scenarios and to allocate funds accordingly (see Activity-Based Costing). This solution relieves a substantial administrative burden.

ALVAO makes the costs of IT fully transparent

We can help you introduce a system that makes IT costs clear and transparent to all employees and managers, each according to their roles and needs, via a corporate web-based portal.


Get a clear overview of your IT costs

We will perform an in-depth analysis of your IT service catalogue, or will use your existing one. Together we will identify the services which should be billed and those which should not. We will use the Pareto Principle (80–20 rule) and focus on those IT services which will quickly improve cost-effectiveness. We will help you to select the best billing method and to evaluate prices for services.


All services are stored in ALVAO Asset Management

For billing purposes, we will use ALVAO Asset Management, extended with “IT Service” items. Furthermore, we will deploy ALVAO Service Desk to give you a full overview of the completed tasks and requirements. We can also implement ALVAO Attendance to facilitate work reporting and billing for the work performed.

chart IT-department

Allocation of IT costs by department

The main part of the system is “Funding Extension”, which displays the IT costs for your entire organization, as well as for individual divisions and departments, down to individual employees. This information is displayed primarily in trend charts, which give you a full overview of increasing or decreasing costs – all at a glance.


Breakdown of IT costs

You will see the effects of market-based self-regulation. All services will be drawn on appropriately. Redundant assets, which had been amortized, will be returned. IT services will start to improve. These are the effects of a client-based approach; when you pay for something, you want the best quality possible.

This will help you make your IT department’s costs more transparent, as if it were a separate subsidiary company. Each other department will know what their IT department does for them, and how much it costs. As an extra added value, your departments will be able to influence these costs and will become more cost-effective.

Your staff will receive full ALVAO training

Our advisors, with many years of experience from different IT departments, will guide you through the deployment of ALVAO and the implementation of new processes in your company. They will train your staff and help them get the system running smoothly. This will allow you to allocate all IT costs more transparently at the level of individual employees, departments, and divisions. Moreover, ALVAO makes it possible to issue internal invoices for services rendered.

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