Excellent questions. Unallocated costs can be a complicated topic. It's good to have a strategy for dealing with them.

1. What is the industry standard for unallocated costs?

There is not an industry standard for % of Costs Allocated. Some programs target 100% allocation. Some programs do not cost 100% of technology spend. Some programs are in an early stage, and they only target a portion of costs. TBM programs that target 100% allocation are usually charge back programs. They partner with F&A to recover 100% of technology spend. The technology invoice to each business unit must have 100% allocation as accurately as possible.

Although we don't have a benchmark, we do have benchmarks on TBM program maturity that are interesting. The chart below shows the level of customers' TBM maturity over time:

This next chart shows the % of customers at each maturity level who are doing show back or charge back activities (Bill of IT). Highlighted in orange are customers who typically target 100% allocation:

If your TBM strategy is to report on 100% of technology spend, you also want your allocations to be as accurate as possible of course. If you do not have data to allocate 20% of cost, you still need to allocate it. However, you don't want to hide the problem. A common strategy in this case is to create an "Unknown" Tower and an "Unknown" Service. Then you allocate the Unknown Service to the business units with a basic strategy like "Cost follows Cost" (weight costs by the 80% cost distribution allocated to BUs or weight by a similar strategy like revenue). Here's an example:

For programs that create a bill, this is a good solution with appropriate transparency. For other TBM programs, I still recommend targeting allocating 100% of costs if possible. Use the Unknown categories at Towers and Services. You can expand this strategy to include Unknown Servers, Unknown End User Devices, or any other category. This achieves 100% allocation. It also accomplishes TBM evolution: data quality improvement:

You can create a report of all Unknown spend. Drill into the cost detail to understand data gaps. Then discuss solutions to improve data capture. Organizations understand their technology data is not perfect. They will appreciate seeing technology data quality quantified, because you can track and trend improvement.

日本語:

Excellent questions. Unallocated costs can be a complicated topic. It's good to have a strategy for dealing with them.

1. What is the industry standard for unallocated costs?

There is not an industry standard for % of Costs Allocated. Some programs target 100% allocation. Some programs do not cost 100% of technology spend. Some programs are in an early stage, and they only target a portion of costs. TBM programs that target 100% allocation are usually charge back programs. They partner with F&A to recover 100% of technology spend. The technology invoice to each business unit must have 100% allocation as accurately as possible.

Although we don't have a benchmark, we do have benchmarks on TBM program maturity that are interesting. The chart below shows the level of customers' TBM maturity over time:

This next chart shows the % of customers at each maturity level who are doing show back or charge back activities (Bill of IT). Highlighted in orange are customers who typically target 100% allocation:

If your TBM strategy is to report on 100% of technology spend, you also want your allocations to be as accurate as possible of course. If you do not have data to allocate 20% of cost, you still need to allocate it. However, you don't want to hide the problem. A common strategy in this case is to create an "Unknown" Tower and an "Unknown" Service. Then you allocate the Unknown Service to the business units with a basic strategy like "Cost follows Cost" (weight costs by the 80% cost distribution allocated to BUs or weight by a similar strategy like revenue). Here's an example:

For programs that create a bill, this is a good solution with appropriate transparency. For other TBM programs, I still recommend targeting allocating 100% of costs if possible. Use the Unknown categories at Towers and Services. You can expand this strategy to include Unknown Servers, Unknown End User Devices, or any other category. This achieves 100% allocation. It also accomplishes TBM evolution: data quality improvement:

You can create a report of all Unknown spend. Drill into the cost detail to understand data gaps. Then discuss solutions to improve data capture. Organizations understand their technology data is not perfect. They will appreciate seeing technology data quality quantified, because you can track and trend improvement.

日本語:

Excellent questions. Unallocated costs can be a complicated topic. It's good to have a strategy for dealing with them.

1. What is the industry standard for unallocated costs?

There is not an industry standard for % of Costs Allocated. Some programs target 100% allocation. Some programs do not cost 100% of technology spend. Some programs are in an early stage, and they only target a portion of costs. TBM programs that target 100% allocation are usually charge back programs. They partner with F&A to recover 100% of technology spend. The technology invoice to each business unit must have 100% allocation as accurately as possible.

Although we don't have a benchmark, we do have benchmarks on TBM program maturity that are interesting. The chart below shows the level of customers' TBM maturity over time:

This next chart shows the % of customers at each maturity level who are doing show back or charge back activities (Bill of IT). Highlighted in orange are customers who typically target 100% allocation:

If your TBM strategy is to report on 100% of technology spend, you also want your allocations to be as accurate as possible of course. If you do not have data to allocate 20% of cost, you still need to allocate it. However, you don't want to hide the problem. A common strategy in this case is to create an "Unknown" Tower and an "Unknown" Service. Then you allocate the Unknown Service to the business units with a basic strategy like "Cost follows Cost" (weight costs by the 80% cost distribution allocated to BUs or weight by a similar strategy like revenue). Here's an example:

For programs that create a bill, this is a good solution with appropriate transparency. For other TBM programs, I still recommend targeting allocating 100% of costs if possible. Use the Unknown categories at Towers and Services. You can expand this strategy to include Unknown Servers, Unknown End User Devices, or any other category. This achieves 100% allocation. It also accomplishes TBM evolution: data quality improvement:

You can create a report of all Unknown spend. Drill into the cost detail to understand data gaps. Then discuss solutions to improve data capture. Organizations understand their technology data is not perfect. They will appreciate seeing technology data quality quantified, because you can track and trend improvement.

日本語:

Excellent questions. Unallocated costs can be a complicated topic. It's good to have a strategy for dealing with them.

1. What is the industry standard for unallocated costs?

There is not an industry standard for % of Costs Allocated. Some programs target 100% allocation. Some programs do not cost 100% of technology spend. Some programs are in an early stage, and they only target a portion of costs. TBM programs that target 100% allocation are usually charge back programs. They partner with F&A to recover 100% of technology spend. The technology invoice to each business unit must have 100% allocation as accurately as possible.

Although we don't have a benchmark, we do have benchmarks on TBM program maturity that are interesting. The chart below shows the level of customers' TBM maturity over time:

This next chart shows the % of customers at each maturity level who are doing show back or charge back activities (Bill of IT). Highlighted in orange are customers who typically target 100% allocation:

If your TBM strategy is to report on 100% of technology spend, you also want your allocations to be as accurate as possible of course. If you do not have data to allocate 20% of cost, you still need to allocate it. However, you don't want to hide the problem. A common strategy in this case is to create an "Unknown" Tower and an "Unknown" Service. Then you allocate the Unknown Service to the business units with a basic strategy like "Cost follows Cost" (weight costs by the 80% cost distribution allocated to BUs or weight by a similar strategy like revenue). Here's an example:

For programs that create a bill, this is a good solution with appropriate transparency. For other TBM programs, I still recommend targeting allocating 100% of costs if possible. Use the Unknown categories at Towers and Services. You can expand this strategy to include Unknown Servers, Unknown End User Devices, or any other category. This achieves 100% allocation. It also accomplishes TBM evolution: data quality improvement:

You can create a report of all Unknown spend. Drill into the cost detail to understand data gaps. Then discuss solutions to improve data capture. Organizations understand their technology data is not perfect. They will appreciate seeing technology data quality quantified, because you can track and trend improvement.

日本語: