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Article #489

Re: IT costs as a percent of total budget

#489
From: Russell A. Pflughaupt
Date: Wed, 08 Jan 1992 17:47
45 lines
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This is some mail I received from you addressed to Dick Peters.
I think the problem is that Berkeley is changing the way mail
is received (my login is rap@miro.berkeley.edu I appear to also
be receiving mail from rap@ucbvax.berkeley.edu).

> From @cmsa.berkeley.edu:BILLING@HEARN.Berkeley.EDU Wed Jan  8 08:32:31 1992
> Date:         Wed, 8 Jan 92 11:25:00 EST
> Reply-To: "Chargeback of (computer) resources"
 <BILLING%HEARN.BITNET@cmsa.berkeley.edu>
> Sender: "Chargeback of (computer) resources"
 <BILLING%HEARN.BITNET@cmsa.berkeley.edu>
> From: Sam Fairchild <SAMF%OHSTMVSA.BITNET@cmsa.berkeley.edu>
> Subject:      Re: IT costs as a percent of total budget
> To: Dick Peters <rap@ucbvax.berkeley.edu>
> Content-Length: 1435
>
>
> I think Information Technology cost as a fixed percentage of total
> budget is a fallacious assumption.
> Todays IT costs permeate budgets at all levels, so it's hard to measure.
> It can work as a guideline on costs and profit estimates.
> It is a leadership decision whether your investment in IT will guide
> you toward your goals.
> If it is used as absolute law, you will pay the difference in human
> terms as you burn out your valuable staff.  (But then if you need some
> turnover...)
> You might pick a percentage on a year-to-year basis, revising the
> percentage figure as needs dictate.  One the other hand you could fund
> IT investments on a project-by-project basis (using the percentage as
> curiosity figure).  The bottom line is performance, no matter which
> accounting practice you choose.
>
> Here is an example:   The Limited Inc. (seven years ago) had a law that
> total IT costs could not exceed 2.0 percent of gross sales.  That was
> just before they brought personal computers into their offices
> worldwide -- so I think things have changed somewhat since.
> Three things have not changed, according to my contacts:
>  Personnel policies still encourage employees "to stretch" to meet
>  assigned goals.  Some folks still burn out in the various divisions
>  of the company.   The Limited Inc and its divisions still market the
>  best clothing styles, so my common stock has done well. :-)
> BTW I don't work there anymore.
> Sam Fairchild
> =============
>
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Path: arc1-ca.pugleaf.net!sparky!uunet!paladin.american.edu!auvm!MIRO.BERKELEY.EDU!RAP

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Newsgroups: bit.listserv.billing
Date:         Wed, 8 Jan 92 09:47:28 PST
Sender:       "Chargeback of (computer) resources" <BILLING@HEARN>
From:         "Russell A. Pflughaupt" <rap@MIRO.BERKELEY.EDU>
Subject:      Re: IT costs as a percent of total budget
Comments: To: BILLING%HEARN.BITNET@cmsa.berkeley.edu