This article provides an overview and summary of the COBIT 5 process Manage Budget and Cost, which is part of the Management – Plan (Align, Plan and Organise) domain.
The purpose of this COBIT 5 process is to manage the IT financial activities in both the organisation and IT functions, covering budget, cost and benefit management. This also includes the prioritisation of spending through the use of formal budgeting and internal cost allocation methods.
The following sub-governance processes are further supported by a list of control activities:
- Manage finance and accounting. Implement and manage a system to account for all IT costs, investments and depreciations.
- Prioritise resource allocation. Implement a decision-making process to prioritise the allocation of resources and rules for investments by individual organisation units.
- Create and maintain budgets. Prepare a budget reflecting the investment priorities to deliver the strategic objectives based on the portfolio of IT programmes and services.
- Model and allocate costs. Implement an IT costing model based on the service definition, ensuring that allocation of costs for services is measurable and predictable, to encourage the responsible use of resources including those provided by service providers.
- Manage costs. Implement a cost management process comparing actual costs to budgets.
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