IT controlling

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IT controlling is a specialist area of controlling and deals with the planning, control and targeting of the IT organization in companies. In the same context, one often speaks of IV controlling (information processing) or IS controlling (information systems). The implementation of a controlling function specially designed for IT takes into account the increasing importance of IT in achieving competitive advantages.

The adaptation of business processes to market requirements and the development of new business areas lead to increasing demands on IT. These claims are countered by increasing pressure to justify and cost. IT can only meet these challenges if it demonstrably contributes to the achievement of strategic corporate goals through needs-based process support and modern information management. The coexistence of the IT area and those responsible for processes in the specialist departments must result in a partnership that ensures the most effective allocation of IT resources. IT controlling offers the business concept and tools that are necessary for the management of a professional IT organization.

Scope of IT controlling

Comprehensive IT controlling covers the areas

  • Portfolio management
  • Project controlling and
  • Product and infrastructure controlling

from. Portfolio management takes on the task of the continuous strategic coordination process, which ensures that investments are made in the right IT projects. Furthermore, a corresponding project controlling or multi-project controlling must be initiated in order to be able to successfully carry out and manage the numerous projects that arise in a professional IT organization. The classic methods of investment and project management provide valuable support for this. After all, the products and services offered by IT must be correctly calculated and charged to the "customers" based on the cause. Product and infrastructure controlling takes on this task. a. thanks to the IT-specific cost and earnings accounting.

introduction

Regarding IT as a “company within a company” and steering it through appropriate goals and alignment with the corporate strategy is the basis of IT controlling. The IT is compared with a classic manufacturing industrial company, with the resulting requirements of a customer and service-oriented IT organization, as well as IT products and prices in line with the market.

In order to be able to meet these requirements, IT has to perform classic management tasks, such as B. setting a product catalog, calculating product prices based on detailed information about the production processes and the associated manufacturing costs, demand-oriented budget planning, customer management, quality management, etc. Decisions about technological innovations must be less technology-driven than business-driven, for which an intensified coordination of IT with the individual business areas is necessary.

In general, the following steps must be taken to introduce IT controlling:

  • Inclusion of IT in the strategic development and planning process
  • Customer-oriented alignment of IT processes
  • Definition of a needs-based, standardized IT product portfolio
  • Creation of controlling instruments for planning, measuring and controlling IT

Tasks and functions

In many companies, IT costs are not transparent, and the distribution of this block of overhead costs among the service recipients is achieved through allocations with often only rough keys. This situation is unsatisfactory for both IT as a service provider and for the corporate divisions as IT customers, as it neither unmasked the IT cost drivers on the business side, nor can the benefits of the IT services for the customers be seen.

The remedy here is IT controlling as part of corporate controlling, which monitors costs at the operational level and controls the strategic alignment of IT according to corporate goals.

In many large companies, the importance of so-called IT cost controlling tools has grown in order to offset IT costs according to the originator and thus to ensure transparency of IT costs.

Approve the right IT projects: As in all areas of the company, it is also important in IT to distribute the limited resources of employees and budget to the projects that are most important for the company's success. This is not just about pure IT projects, rather those projects from the departments that have corresponding effects on IT must also be taken into account. The prioritization of those projects that have to be considered in the planning period must accordingly be done in close cooperation with the heads of the departments.

Steering IT projects to success: Each individual project is continuously tracked in the project controlling. This means that warning signals can be perceived in good time and the chances of completion on time and on budget can be secured - which is ultimately decisive for the success of the investment. The business benefit of an IT investment is usually calculated using the net present value method . If delays occur in the project process, cash returns from the projects may be realized later. This time shift leads to a stronger discounting of the expected, positive monetary effects or to a reduction in the present value in the corresponding observation period from the investment calculation. The advantage of an investment from a cost-benefit perspective can therefore shrink, so that in the event of major changes in the project process, a reassessment is definitely appropriate, which may lead to a downgrade of the project.

Define and calculate IT products correctly: The aim here is to reproduce the manufacturing process of IT products, which is usually organized according to an IT reference model (e.g. ITIL, COBIT), from a business point of view in order to result in a commercial product calculation reach. If necessary, this can be supplemented by a sales price calculation, multi-level contribution margin calculation and profitability analysis. The latter can also be implemented multidimensionally in order to show the management of the IT organization all aspects of their product portfolio - for example the view of customer groups or technologies. This is especially important for an independent IT service provider operating on the free market.

First of all, sellable products with specific benefits for the specialist areas, including quality features (service levels), must be defined. Based on the needs planning of the departments, the need for IT resources for production is estimated. The prices for the IT products are ultimately created through a commercial product calculation, if necessary in an iterative process.

The transparent prices of IT products and the user-based billing result in greater cost awareness in the departments. At the same time, companies are able to use the internal IT service allocation and the planning process based on the quantities required to adjust their IT capacities and thus reduce costs over the long term.

In addition, the internal IT service allocation provides precise control information about the company's market performance, because the IT costs can be assigned directly to the various products. In this way, the contribution margins can also be determined more precisely, for example to make well-founded product range decisions. This is a significant step forward over the undifferentiated and often unfair overhead cost allocations.

Goals and benefits

The company receives planning, evaluation and management tools for

  • Coordination of IT services with the users
  • Improvement of the competitive strength of the IT service offering in terms of profitability, efficiency, quality and reliability
  • Control of the IT service processes
  • Adaptation of the IT range of services to the dynamics of business processes through technical and organizational innovations.

Tools for IT controlling

The following industry tools are available to companies:

  • annafee
  • apptio
  • itpilot

literature

Essays

  • R. Brun, A. Hasse, C. Kunze: Calculation and cost allocation in IT. In: Roland J Blomer, Hartmut Mann, Martin G Bernhard (eds.): Practical IT management. Symposion Verlag, 2006, ISBN 3-936608-82-2 .
  • F. Jaeger: Process-oriented controlling of information processing. In: Cost Accounting Practice. 9/1999.

Monographs

  • Andreas Gadatsch, Elmar Mayer: Master's course in IT controlling. 5th, verb. u. exp. Edition. Vieweg, Wiesbaden 2013.
  • Herbert Kargl, Martin Kütz: IV Controlling. 5th, completely revised. u. exp. Edition. Oldenbourg, Munich / Vienna 2007.
  • Ralf Kesten, Arno Müller, Hinrich Schröder: IT controlling. Vahlen, Munich 2007.
  • Martin Kütz: IT controlling for practice. dpunkt.verlag, Heidelberg 2005.
  • Jorge Marx Gómez, Horst Junker, Stefan Odebrecht: IT controlling. Erich Schmidt, Berlin 2009.
  • Ernst Tiemeyer: compact IT controlling. Elsevier, Munich 2005.

Web links

Individual evidence

  1. ↑ https://anafee.de/ .
  2. ↑ https://apptio.com .
  3. ↑ https://itpilot.de .