On the classification and estimation of costs in information technology

Abstract

The complexity of IT in modern organizations is generally quite high and the costs of ITare correspondingly complex. An overview of available publications shows that there isrelatively research done on the development of cost models for IT. The systematic gatheringand classi cation of IT costs is often overlooked in organizations. The current thesis addressesmany of the issues associated with the complex nature of IT costs, and proposes a cost modelfor IT. The necessary details of IT costs are de ned in order to facilitate the collection ofcomplete IT cost data. Categories for IT costs are proposed. The categorization is basedon how modern IT is usually built up in organizations, with each category representing adistinct part of IT. Finally a method of estimating IT costs is demonstrated. The methoduses simple probability densities to represent cost estimates. A simple example is shown thatdemonstrates that with only a few cost estimates using probability densities, the sum of theestimates will result in a distribution that closely follows the Gaussian distribution.