Wanted to get thoughts on this.  We have certain areas where we map their entire cost center to App Dev because that is their primary support function.  We further break out App Dev into internal and external - internal FTEs vs external contracts.  What came up recently is that there are other costs within these cost centers that are mapped to App Dev that are not labor - these cost centers may also get hardware, depreciation, software, etc.  This is because our cost centers are organizationally based and not functionally based.  So therein lies the question.  Concerning the non-labor items, how do you determine what is internal or external?  Is there a rule of thumb, 80/20 rule, etc.?  We're mainly asking because that is how we show App Dev in our reporting - we have two cost drivers - one for internal and one for external.  Guessing folks may typically just have one cost driver (not sure), but looking to see how other folks deal with this (if they show App Dev split into two).  Thank you for your time!!  

Not sure if this helps but we map every labor headcount (internal and external) to towers directly and then have an allocation amount against each - this is also done for vacancy positions too.

It's a little cumbersome at the start of a financial year (especially as we have changed our departmental structures a few times over the last 2 years) but if your headcount is stable then you don't have to update the mapping too often.

Example below:

Very interesting - thank you!  I'll run it up the flag pole and see what the team thinks!

Hi Jenny,

why don't you take your App Dev Labor as a starting point and use that to work out the ratio of Internal and External, and then use that weight the Non Labor costs. If you do it on headcount rather than Labor cost this would make sense as Non Labor costs are most likely going to be PC, Dev Tools, etc. which will be evenly spread irrespective of the salary of the Labor resource.

Michael

Thank you, Michael!