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IDC PlanScape: Developing a Service-Based Budgeting and Forecasting Model — Plan Services, Not Cost Centers

IDC PlanScape: Developing a Service-Based Budgeting and Forecasting Model — Plan Services, Not Cost Centers

This IDC study provides guidance as to how to integrate these proven techniques into a service-based budgeting and forecasting process in a stepwise manner so that maximum advantage can be achieved. "Service-based budgeting and forecasting pushes the IT costs out of the IT cost centers and back to the customers who consume the IT services based upon their customer demand. This strong connection between customer demand and IT capacity forces a highly productive and profitable dialog between IT and its customers — where blunt cost cutting can be avoided, and focused and business-driven IT service budgets can be promoted in its place," says Bob Multhaup, adjunct research advisor for IDC's IT Executive Program (IEP).


IDC PlanScape Figure
Executive Summary
Why Is a Service-Based Budgeting and Forecasting Model Important?
The Problem with Planning by Cost Centers
The Advantages of Service-Based Budgeting and Forecasting
What Is a Service-Based Budgeting and Forecasting Model?
Initial SBBF: Capture Costs by Service and "Run, Grow, Transform" the Business
SBBF Refinements 1 — Distribute Foundation Services to Business Services
SBBF Refinements 2 — Distribute TCO Services to Customer Consumption
Who Are the Key Stakeholders of a Service-Based Budgeting and Forecasting Model?
CIO and the IT Management Team
IT Financial Management
IT Service Managers and Cost Center Managers
IT Customers
How Can My Organization Take Advantage of a Service-Based Budgeting and Forecasting Model?
Step 1: Develop "Run the Business" Service Baseline
Step 2: Institute Demand-Based Service Baseline "Puts" and "Takes"
Step 3: Drive Competitive Advantage Innovations by Service
Step 4: Develop "Grow the Business" Budget
Step 5: Consolidate and Fine-Tune Budgets
Essential Guidance
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