COBIT 2019: Budget and cost management (APO06)

Managed Budget and Cost

Managing I&T-related financial activities across business and IT functions is critical to ensuring a fair and efficient allocation of resources. This process encompasses budgeting, cost and benefit management, and prioritization of expenditures, using formal budgeting practices and an equitable cost allocation system for the enterprise. Stakeholders are consulted to identify and track total costs and benefits, aligned with I&T strategic and tactical plans, with corrective actions initiated where necessary.

objective

Promote an effective partnership between IT areas and business, enabling:

1. Effective Use of Resources: Ensure that IT-related resources are utilized efficiently and effectively.

2. Transparency and Accountability: Provide clarity on the costs and business value of solutions and services.

3. Informed Decisions: Enable the company to make informed decisions about the use of I&T solutions and services.

Management Practices

APO06.01 – Manage Finance and Accounting

1. Description:
   Establish and maintain a method for managing and accounting for all I&T-related costs, investments and depreciation as an integral part of the company's financial systems and accounts.

2. Action:
   Report using the company's financial measurement systems.

APO06.02 – Prioritize Resource Allocation

1. Description:
   Implement a decision-making process that prioritizes resource allocation, defining rules for discretionary investments by individual business units.

2. Action:
   Consider the potential use of external service providers and evaluate purchasing, development and leasing options.

APO06.03 – Create and Maintain Budgets

1. Description:
   Prepare a budget that reflects investment priorities, based on the portfolio of I&T-enabled programs and services.

APO06.04 – Model and Allocate Costs

1. Description:
   Establish and use an R&T costing model, for example, based on the service definition.

2. Action:

   • Ensure that cost allocation is identifiable, measurable and predictable.

   • Encourage responsible use of resources, including those provided by service providers.

   • Regularly review and compare the model to maintain its relevance and suitability for business and IT activities.

APO06.05 – Manage Costs

1. Description:
   Implement a cost management process that compares actual costs to the established budget.

2. Action:
   Monitor and report costs, identifying deviations in a timely manner and assessing their impact on the company's processes and services.

Skills

Financial Management (IMF):
It covers the control and administration of IT assets and resources used in the provision of services, including the identification of material and energy costs, ensuring compliance with governance, legal and regulatory requirements.

Translated by 4MATT Tecnologia from the original Process Symphony: Budget and Cost Management - APO06 (COBIT 2019)

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