How to Manage IT Spend

10.06.2011
IT departments have traditionally been weak at controlling IT spend, let alone be able to explain the cost in the first instance to the business. So why is it so difficult to manage IT spend? Typically this is due to:

• Spend is often incurred in many departments and business units with a varying degree of central control. This is often further exacerbated by spurious IT recharges.

• Demands on IT grow continuously. This results in increased cost. However, businesses often fail to distinguish what is a real cost increase (unit price), versus expansion of the IT environment (volume).

• Typically, IT staff lack finance understanding and they are unable to talk the language of the accountants.

As a result many businesses feel that IT is not properly managed. Businesses respond by cutting or "freezing" IT spend. This leads to frustration in the IT department and with an equal annoyance on the business side as the business feels that they need to "watch" the IT function as the "techies" cannot be trusted to make managerial and cost effective decisions.

In this article we outline how StarBev, a leading Central Eastern European brewer -- operating in seven countries, has managed to bridge this gulf between the business and IT, and how they successfully control IT spend.