Funding IT

5 Written Questions

1. difficult to implement
2. framework to assess cost of IT infrastructure components
3. hardware, software, network, data
4. doesn't link IT costs with any specific user
5. measures organizational performance based on value drivers

5 Matching Questions

1. categories of benefits in business case
2. why chargeback systems are popular
3. agility focused firm spends more on this category of IT portfolio
4. in activity-based costing, costs reflect
5. true-up process

1. a when IT managers using an allocation process balance expenses with payments to figure out the actual cost of IS for the year
2. b infrastructure (solid foundation for fast, new changes)
3. c the products and services of the business
4. d fairest method; users can see exactly how much usage costs
5. e observable, measurable, quantifiable, financial

5 Multiple Choice Questions

1. company funds and invests in most valuable initiatives and gets maximum benefits
   1. components of total software cost
   2. components of total data cost
   3. overall goal of IT portfolio management
   4. IT portfolio management
2. chargeback, allocation, corporate budget
   1. three main funding methods (for IT)
   2. allocation funding method
   3. chargeback funding method
   4. corporate budget funding method
3. when there is a wide variation in usage among users or when actual costs need to be accounted for by the business units
   1. categories of soft costs
   2. why chargeback systems are popular
   3. both chargeback and allocation methods...
   4. when chargeback methods are most appropriate
4. because benefits aren't that tangible, difficult to quantify, observe, or long-term
   1. IT portfolio management
   2. dashboards help to determine
   3. why ROI is hard do for IT investments
   4. typical IT portfolio investments
5. provide information used to control, manage, communicate, analyze, or collaborate
   1. informational systems
   2. infrastructure systems
   3. transactional systems
   4. strategic systems

5 True/False Questions

1. quantifiable benefits → have an existing way to measure it

   True        False

2. IT portfolio management → (descending order) infrastructure, transactional, informational, strategic

   True        False

3. example of activity based costing → removable media, onsite backup storage, offsite backup storage

   True        False

4. two main complaints about allocation funding method → free-rider problem (heavy users pay same as light users), difficult to determine how to allocate costs

   True        False

5. chargeback funding method → recovers IT costs by charging based on criteria other than usage (e.g. revenues, number of employees)

   True        False