Original Post Date: Thursday, July 16, 2009

In an article in last weeks Harvard Business , IT Costs: Do You Speak Their Language), John Sviokla discusses the fact that as the information business continues to grow it is increasingly important for organizations to understand the impact of IT as it relates to their operating costs. This certainly rings True to us here at PRICE Systems who have recognized this reality. TruePlanning 2009 has been developed by PRICE specifically to help organizations get their heads around the true costs of Information Technology.

Application development projects can represent significant expense to an organization and tend to be the riskier items in the IT budgets. But it is important to recognize that they represent only a small part of most organizations IT budgets. According to Gartner’s "IT Spending and Staffing Report 2008",on average organizations spend about 20% of their IT budgets on application development. The rest of their budget is spent on hardware, software, networking, maintenance, as well as data center and help desk activities. The figure below indicates the typical distribution of IT costs based on this report: