In our Ask the Accountants column, the TechRepublic financial team fields questions from working IT pros about the mysteries of making those budget sheets balance. Here’s this installment’s query from a TechRepublic member:

Question from an IT manager: “At my company, one manager’s team keeps placing the same support calls. We end up spending all our time in one area, while the rest of the company complains that they don’t get enough support. We don’t do internal charge backs for IT time and expenses, so our only recourse is to complain at meetings, but that doesn’t help. Is there any way to actually establish and enforce a budget on charging back time?”

The Budget Crunchers: The practice of charging IT time expenses back to individual business units is intended to measure the amount of services the IT department provides to that particular business unit. It essentially moves the costs of the IT department out of the IT department cost center and into the cost center of the business units that used the service.
Ask our TechRepublic Budget Crunchers for pointers on making financial sense from all those IT expenditures. Due to the volume of submissions, we may not be able to answer every question we receive, but we will review all the e-mails you send us and answer the most common and most pressing queries.
If your company does not currently charge back IT time expenses, it is likely that the entire budget for IT time is included in the IT department, rather than the individual business units.

Unfortunately, unless your company budgets IT support by business unit, it’s hard to really hold the business units accountable for the amount of IT department’s time they use. Without the budget for support time in each department, charging back time to individual business units would make the business unit’s financial performance look disproportionately bad and the IT department’s financial performance look disproportionately good.

Two things can be done to address this:

  • Set up some reporting tools to track who is using the IT support and how.
  • Work with the finance and accounting groups to set up a mechanism for budgeting and charging back IT time.

Track support services
There are a variety of ways to track which departments are using the services of IT support the most. With time-tracking tools, you can measure exactly how much time is spent in each department or business unit. If your company doesn’t have time-tracking software, start asking each of your analysts to submit a weekly or daily report on where they spent their time. With this information, set up some simple reports that show how much of the IT department’s time was spent in each business unit.

Sharing this information with all the business unit managers will help them see how they stand in comparison to the other business units.

You can make this type of reporting even more meaningful by adding other metrics:

  • Add the headcount of each department, illustrating how much time was spent per employee.
  • Quantify those hours by multiplying the total hours by the average hourly wage of the IT support department.

This won’t be a “fully-loaded” cost, but they’ll get a pretty good idea of the cost of the resources they’re using.

Track the types of service provided
The summary of hours is great, but it doesn’t tell the whole story.

The vice president of sales, for instance, could look at this report and say to herself, “I guess my problems are just more complicated than the other departments’.”

A supplemental report may track the types of calls your analysts are receiving. This can be even more effective if call types are tracked by department.

Then you can see that the sales team, for instance, is calling mostly for repeat desktop issues. You may want to use this information to set up a special training class for them, or perhaps they don’t have the right software and equipment.

This type of report helps you nail down exactly where the problems are.

The next step is to work with the accounting and finance departments to set up some kind of mechanism to charge IT time back to departments. Hopefully, with the new reporting tools you’ve developed, you can clearly demonstrate the need for the internal charge-back system.

The bottom line
The IT support department will need to be intimately involved in developing the support budgets for the business units, and the reporting you’ve created will go a long way in making that job easier.
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