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image/svg+xml Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao Closed Access logo, derived from PLoS Open Access logo. This version with transparent background. http://commons.wikimedia.org/wiki/File:Closed_Access_logo_transparent.svg Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao https://doi.org/10.1...arrow_drop_down
image/svg+xml Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao Closed Access logo, derived from PLoS Open Access logo. This version with transparent background. http://commons.wikimedia.org/wiki/File:Closed_Access_logo_transparent.svg Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao
https://doi.org/10.1007/978-3-...
Part of book or chapter of book . 2014 . Peer-reviewed
License: Springer Nature TDM
Data sources: Crossref
SSRN Electronic Journal
Article . 2013 . Peer-reviewed
Data sources: Crossref
SSRN Electronic Journal
Article . 2013 . Peer-reviewed
Data sources: Crossref
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Understanding and Evaluating IT Budgets and Funding

Authors: Indira Venkatraman; Paul T. Shantapriyan;

Understanding and Evaluating IT Budgets and Funding

Abstract

The average firm spends over two-thirds of the IT budget on maintaining the present infrastructure and architecture. The IT budget in turn makes up between thirty to fifty percent of the capital expenditure of a firm annually. An appreciation of the models would enhance an understanding of funding for new IT initiatives and/or making improved decisions on IT investments and operations. In an era where IT infrastructure is essential, a sound IT portfolio is important. This paper explores the necessities of maintaining a firm’s current IT health, investing in future capacity and improving the competitive position of the firm. This paper tries to suggest how an organization can shift from barely maintaining the current IT infrastructure, much to the chagrin of everyone involved, to an industry leading, value generating and sound IT infrastructure. This paper first examines four models for Budgeting and Funding for Information Technology in a firm (Charge Based, Lord and Master, Revenue Percentage, Absolute Outsourcing). Then it proceeds to develop a speculative framework to assist IT budget and funding. There is evidence that the first four models (Charge-based, Lord and Master, Revenue Percentage and Absolute Outsourcing). Charge-based is a model where the IT unit is treated outright as a service provider and paid for services implemented. In Lord and Master, a firm’s IT unit has absolute control over implementation and execution of IT services. Revenue Percentage is where the IT unit compete for budgets in the form of a percentage of the organization overall revenue/profits. Absolute Outsourcing is also a service-charge based system; the only difference being that there is no defined IT unit within firm. IT needs are outsourced to an IT firm outside of the organization and services rendered, charged back to the organization.The impact an IT department has, whatever model it uses to exist, on organizational activities is un-questionable. The study of these models will help firms gather knowledge as to where they stand and also analyze if they need a change in their IT related financial environment. The proposed models are evaluated on: how each model works, how much is allocated as an IT budget, how the financial relationship of IT with other departments and stake holders functions, and implications on organizational learning. Using the funding and budgeting models as building blocks future research is welcomed on governance, change management as well as operational, day to day practical decision making which has relevance to both academic and practitioners.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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