Lec 3 Flashcards
Chargeback system =
A chargeback system is the management practice of billing business depts for services provided by an in base info technology center
Objectives of a chargeback system
Objectives of a chargeback system:
Cost recovery - recovering all of IT costs
Resource allocation - short supply better allocation
Efficiency - no waste on it services
Drawback: creates disputes between IT and BU
Types of non chargeback systems
Types of non chargeback systems are:
Unallocated cost - charge in full
Simple cost allocation - based on revs on BU
Categories of charge back system
Categories of charge back systems:
Cost recovery - time you use IT
profit making- make profit
Types of chargeback systems
Types of chargeback systems:
Cost recovery:
Ah cost pricing - av unit cost
Standard cost pricing - total cost of usage
Flexible pricing - high price for high demand
Profit center:
Fixed pricing - can trade outside of business
Market based pricing - charge based on market prices
How to measure IT value
How to measure IT value:
Find capabilities competitors can’t match eg better design
Compare what capabilities you’re better than rivals
Measure how much of the capabilities relies on IT
Pitfalls in measuring IT value
Pitfalls in measuring IT value
Only measure for competitive ad and not for business value
Calc ROI too early
Difficult to claim what IT and BU do separately
Qualifier v compete definitions
Qualifier = day to day inv (keep you running)
Compete = give potential edge over competitors
Mcfarlans strategic grid:
Compares strategic dependance (how long business can continue with the system) to strategic impact which is how important system is for creativity and competitive advantage.
2 factors of organisation performance
Efficiënt - doing things right
Effectiveness - attainment of competitive ad
It value creation model
It value creation model is the combination of IT resource and complimentary non IT resources to improve business performance and organisational performance
Value discipline in business strategy: firms create value for customers through
Operational excellence
Customer intimacy
Product leadership
5 business performance measures
5 business performance measures:
- Supplier relations (operational excellence)
- Production and ops (operational excellence)
- Product and service enhancement (product leadership)
- Sales and marketing support (customer intimacy)
- Customer relations (customer intimacy)
