Calculating the monthly running cost of an IT unit involves identifying and summing up all relevant expenses. Here’s a step-by-step guide to help you determine these costs:
1. Personnel Costs
Personnel costs are often the largest part of an IT unit’s budget.
• Salaries: Include the gross salaries of all employees in the IT unit.
• Benefits: Include health insurance, retirement contributions, and other benefits.
• Taxes: Consider payroll taxes the employer is responsible for.
Formula: Total Personnel Costs=Sum of all salaries+Sum of all benefits+Sum of all taxesTotal Personnel Costs=Sum of all salaries+Sum of all benefits+Sum of all taxes
2. Infrastructure Costs
This includes the costs related to physical and virtual infrastructure.
• Office Space: Rent, utilities, and maintenance for physical office space.
• Servers and Data Centers: Costs for on-premises servers, including power, cooling, and maintenance.
• Cloud Services: Monthly fees for cloud-based infrastructure services.
Formula: Total Infrastructure Costs=Office Rent+Utilities+Server Costs+Cloud Services CostsTotal Infrastructure Costs=Office Rent+Utilities+Server Costs+Cloud Services Costs
3. Software and Licenses
Costs for software applications and licenses needed by the IT unit.
• Operating Systems: Licensing costs for OS software.
• Productivity Software: Costs for software like Office 365, G Suite, etc.
• Specialized Software: Costs for industry-specific software.
Formula: Total Software Costs=OS Licenses+Productivity Software Licenses+Specialized Software LicensesTotal Software Costs=OS Licenses+Productivity Software Licenses+Specialized Software Licenses
4. Hardware and Equipment
Costs for purchasing and maintaining hardware.
• Computers: Laptops, desktops, and peripherals.
• Networking Equipment: Routers, switches, etc.
• Maintenance: Repairs and replacements.
Formula: Total Hardware Costs=Computer Costs+Networking Equipment Costs+Maintenance CostsTotal Hardware Costs=Computer Costs+Networking Equipment Costs+Maintenance Costs
5. Telecommunications
Costs associated with communication services.
• Internet Services: ISP charges.
• Phone Services: Mobile and landline costs.
• Video Conferencing: Subscriptions for services like Zoom or Teams.
Formula: Total Telecommunications Costs=Internet Services+Phone Services+Video Conferencing ServicesTotal Telecommunications Costs=Internet Services+Phone Services+Video Conferencing Services
6. Miscellaneous Expenses
Other operational costs.
• Training and Development: Costs for employee training programs.
• Travel and Accommodation: Expenses for business travel.
• Office Supplies: Stationery and other office supplies.
Formula: Total Miscellaneous Costs=Training Costs+Travel Costs+Office SuppliesTotal Miscellaneous Costs=Training Costs+Travel Costs+Office Supplies
7. Depreciation
Depreciation of IT assets over time.
• Depreciation: Calculate the monthly depreciation of hardware and other capital assets.
Formula: Total Depreciation Costs=Annual Depreciation of Assets/12Total Depreciation Costs=Annual Depreciation of Assets/12
Total Monthly Running Cost
Add up all the above costs to get the total monthly running cost of the IT unit.
Formula: Total Monthly Running Cost=Total Personnel Costs+Total Infrastructure Costs+Total Software Costs+Total Hardware Costs+Total Telecommunications Costs+Total Miscellaneous Costs+Total Depreciation CostsTotal Monthly Running Cost=Total Personnel Costs+Total Infrastructure Costs+Total Software Costs+Total Hardware Costs+Total Telecommunications Costs+Total Miscellaneous Costs+Total Depreciation Costs
Example Calculation
Assuming the following hypothetical monthly costs:
• Personnel Costs: $100,000
• Infrastructure Costs: $10,000
• Software Costs: $5,000
• Hardware Costs: $2,000
• Telecommunications Costs: $1,000
• Miscellaneous Costs: $1,500
• Depreciation Costs: $1,500
Total Monthly Running Cost: Total Monthly Running Cost=100,000+10,000+5,000+2,000+1,000+1,500+1,500=$121,000Total Monthly Running Cost=100,000+10,000+5,000+2,000+1,000+1,500+1,500=$121,000
By following these steps and using the provided formulas, you can systematically calculate the monthly running cost of an IT unit. Adjust the numbers based on your specific situation for a precise calculation.