Control of information technology costs by allocating costs to users

This paper considers the control of information technology costs by allocating those costs to user departments. User departments are assumed to use these costs in making decisions about the appropriate levels of information technology use. The use of accounting information in decision making is discussed, and allocation methods which fit within the decision framework are considered. The possible methods are (i) those based on the use of computer resources and (ii) those based on taking an extra step by converting resources used into products of the information technology system which are comprehensible to users. Problems in using allocations to control costs relate to the difficulty of calculating product based allocations, the level of fixed costs in an information technology facility, lack of control, over usage levels and the stage of computer development.