Any pointers on best way to determine fixed or variable cost for IT?

Not sure about a best way - since these phrases seem to be interpreted slightly differently at different institutions.

@Tim Scammell, @Andrew DeMaio, and @Jon Sober traded ideas on fixed and variable costs over in this post which you may find useful.

Hi Larry,

See @Andrew DeMaio post here on Fixed and Variable:  The Case for Tracking Fixed and Variable Costs

To configure this, you will need to get buy-in from  your IT Finance organization on the definitions of what is Fixed and what is Variable from an GL Account Perspective.  Each IT Finance organization will have a slightly different version of what is categorized as Fixed vs. Variable.  For example, some IT Organizations might look at variable costs for things that change annually (like SW Maintenence contracts or External Vendors).  Other IT Organizations will take a longer term approach at what variable costs are so it is best to ensure you are 100% aligned with your IT FInance organization before rolling this out.

As others discussed we gathered buy-in from various company teams but settled on if the cost will significantly change due to our decisions within one year its variable, if it takes longer than one year for the cost to change its fixed.

Will Leaming