Determining the actual cost of IT services to the business units that use them has long been a key challenge for IT executives. One way to think about it is by visualizing IT in the traditional supply chain context, suggests Sunny Gupta, CEO of Apptio.

To know what the cost of something is, you have to know the cost of the raw materials that went into creating it. In the IT context, this means factoring in data center costs, labor costs, server costs, application costs and more. Performance metrics that reveal cost transparency and accountability can go a long way in helping determine the full costs of IT services, Apptio suggests in a post at CIO magazine. He offers five best practices for calculating these costs.

The first thing to do is put together a taxonomy for IT services and products. This common glossary helps ensure that different groups use the same language when talking about IT, reducing ambiguity and redundancy in IT costs. Once everyone is speaking the same language, find one use case that is relatively easy to understand and has the potential to show "a quick win." For some companies, quick wins are found in storage optimization, the data center or directory services.

For more:
- see Sunny Gupta's post at CIO

Related Articles:
How to get back some of your IT spending 
Analysts forecast IT spending growth 
Gartner: Companies spend 5 percent of IT budget on security