IT Service Costs Research Articles

ВЛИЯНИЕ СПЕЦИФИЧЕСКИХ РИСКОВ НА ОЦЕНОЧНУЮ СТОИМОСТЬ IT-СЕРВИСОВ

The purpose of this work is to prepare recommendations for calculating the impact of specific risks on the estimated cost of IT services. To achieve the goal, the following tasks were set: identify all risks important for accounting; determine their acceptable values; find factors influencing their value. As a result, the list of risk premiums was expanded, taking into account possible problems of IT services, and the recommended range of their values was indicated. Factors that increase risks and affect the estimated value are listed.

Essentialities of Cloud Accounting Information System on The Operational Efficiency of Firms In Nigeria

Novel accounting technology such as cloud accounting information system has taken the Centre stage in its presumed capacity to provide relevance online accounting and auditing solutions that are accessible from anywhere through the cloud service providers. It is no doubt that keeping pace with this accounting technology has comes with apprehension from target audiences, that have created apathy in the deployment of cloud accounting by some companies in Nigerian, due to some speculative drawbacks such as high security breaches, high cost of IT services, risk of unauthorized access and viruses among others. It is in this light, that the study firstly examined the essentialities of cloud accounting information system on the operational efficiency of firms in Nigeria and secondly evaluated if there are significant differences in the perception of respondents in deployment of cloud accounting on corporate exigencies in Nigeria. The survey research design was adopted to collect data from 385 respondents in 32 companies cutting across four sectors in Nigeria. The Chi-square and Analysis of Variance were used for the test of hypotheses and it was discovered that cloud accounting significantly enhances the operational efficiency of firms in Nigeria, while there were no significant difference in the perception of respondents in deployment of cloud accounting leading to increase in the risk of unauthorized access, weak or no access control and high cost of IT services etc. In all, the benefits of the deployment of cloud accounting outweighs the exposures and it was recommended among others that organizations should endeavour to implement substantial security measures to protect IT infrastructure through effective internal control architecture

РИНОК ІТ-ПОСЛУГ: ТЕНДЕНЦІЇ ЕКОНОМІЧНОГО РОЗВИТКУ ТА ОРІЄНТИРИ ДЛЯ УКРАЇНИ

The article is devoted to the study of trends in the economic development of the IT services market in Ukraine and the determination of guidelines for the future. It was established that in the context of the integration processes that Ukraine is undergoing, its national economy is affected by a significant number of external and internal factors. And, it is obvious that the identified factors have had an impact on global and local markets in different periods. The market of IT services requires special attention, as it is a strategically important direction for our country - the stability of foreign currency inflows and the activity of attracting investments for development. In the current long period of transformational processes burdened by the war of the Russian Federation against Ukraine, the market of IT services means stable jobs, taxes paid on time and filling the State Budget of Ukraine. The article determines that the field of IT services is the most sensitive, first of all, to economic factors. These are: the volume of the IT market, the exchange rate of the US dollar, the cost of IT services, wages in the market of IT services, etc. An equally important role is played by the geopolitical position of the world's leading countries, which determine (dictate) the "rules of the game" in the IT services market and determine general globalization trends, etc. In the course of the research, we established that during 2017-2021, the number of registered IT service companies in Ukraine doubled. in the world ranking, Ukraine still has advantages in the IT market compared to the nearest competing countries. At the moment, compared to its nearest neighbors, Ukraine ranks 3rd in the world ranking, behind Belarus and Serbia, but ahead of Estonia, Hungary, Poland, Lithuania and Slovakia. Based on the results of the analysis of the data array, the dynamics of the export of computer services from Ukraine during 2017-2021 were studied, which demonstrates rapid annual growth. The trend of growth in the total volume of exports of IT services from Ukraine can be explained by the growth of demand on the world market. And although the IT services market in Ukraine is still being formed, it is important that it further develop in the direction of transparency, openness and competitiveness. And external factors, such as currency fluctuations, globalization processes, etc., did not hold back its development. In order to preserve the growing trends in the development of the IT services industry, it is important to make decisions about its further development based on world experience.

Methodological aspects of cost accounting and calculation of the cost of it services

The article examines the essence of the concept of «IT-service» and provides a critical assessment of the state of regulatory regulation of the costing of services. It is found that the insufficiency of regulatory regulation and the lack of theoretical research on the choice of an organizational and methodological model of costing information products and services in practice encourage adaptation of the general costing methodology without taking into account the peculiarities of the technology of providing IT-services (production of IT-products), which reduces the reliability of costing calculations and does not contribute to the adoption of effective management decisions. Therefore, based on the study of scientific works, the significant differences inherent in IT-services were defined and systematized, and the specific features of IT-services and their provision technologies were determined. It has been proven that the established features of IT-services have a significant impact on the organization and methodology of cost accounting for the provision of IT-services. It was concluded that the most adequate to the nature of IT-services and the features of the technology of their provision is the non-contract (project) method of accounting with the detailing of production costs by customers, IT-projects and types of information services. Taking into account the requirements of the current regulatory framework and the technological features of the provision of IT-services, the composition of cost items for the implementation of IT-projects has been identified, which will contribute to streamlining the accounting of costs and calculating the cost of IT-services. In order to take into account the peculiarities of the provision of IT-services, the ratio of cost accounting objects and calculation objects is proposed, and calculation units are differentiated depending on the type of IT -services. Taking into account the insignificant amount of indirect costs for the provision of information services, a traditional approach to their distribution using a single basis – the working time of programmers – is proposed. An organizational and methodological model of project costing of IT-services is proposed. The practical application of the given proposals will ensure the complete inclusion of costs in the cost of IT-services, the reliability of cost calculations, and the improvement of the quality of management decision-making.

Organizational Structure for the IT Department: Profit Center or Cost Center?

Why do some firms organize their IT departments as profit centers whereas other firms organize IT as a cost center? These commonly employed organizational structures are characterized by information asymmetry and decision rights afforded to the IT department. The complexity of IT and its ongoing rapid evolution lead to information asymmetry where the IT department has private information about technology and cost, and the consuming departments have private information about demand. Under the cost center organizational structure, the firm sets the quality and number of IT services offered by the IT department. Whereas under a profit center structure, the IT department makes decisions on quality, price and variety of IT services. We find that the quality of IT services under the cost center decreases with greater uncertainty in demand for IT services. We also find that the cost center structure can offer higher quality IT services than the profit center structure, and consumption of IT services can be higher under the profit center structure. The preferred organizational structure does not always provide greater variety of IT services than the alternate structure. The cost center is preferred when the marginal cost of IT services is sufficiently low, or the fixed cost of quality is sufficiently high.

Problems and Potential Opportunities for the Development of the it Sphere in Ukraine under the Condition of Activating the Processes of Integration to the International Market: Administrative Aspect

The article is devoted to the problems, potential opportunities for the development of the IT sphere in Ukraine under the conditions of the activation of the processes of integration into the international market. The trends in the number of business entities in the IT sphere in recent years have been analyzed. The article contains a description of development trends and institutional subjects of regulation of the global IT market by management levels. The strategic directions of the development of the national IT market, which should be logically consistent with the main areas of the economy, have been analyzed. Potential scenarios of the development of events on the domestic IT market are highlighted. Modern information technologies make it possible to find effective solutions that improve business operations and are manifested quantitatively and qualitatively: the number of services, the cost of IT services and the level of reliability, the speed of bringing new services to the market or creating new conditions for existing ones. This happened thanks to the expansion of the domestic market, the need to export IT services, the improvement of the level of effectiveness of legal regulation of this area, which is taking place, in particular, with the wide involvement of business associations, public associations, etc. One of the most promising and realistic scenarios is the consolidation and integration of the Ukrainian IT market with the EU market. It will contribute to the active development of the domestic IT market in Ukraine through the creation and implementation of new projects. Cooperation of the IT industry with the state, promotion and stimulation of the development of this sphere by the state is necessary. For further growth and development of the domestic IT industry, the following measures are necessary: formation of a stable fiscal policy for the industry, elimination of regulatory barriers, promoting the activation of the development of IT education, raising the level of qualification of IT personnel, etc. Keywords information, IT market, digitalization, information technologies, integration, international market, management.

E-Learning System Development: Challenges and Threats in the Digital Economy

In the context of the digital transformation of all socio-economic processes of society and the complex situation with «live» communication (as a result of the coronavirus pandemic), in Russia and other countries of the world, the problem of organizing an effective e-learning system at all levels of education is first on the agenda. In the Russian Federation, the solution to this problem is currently being exacerbated by the digital inequality of territories that has developed for various reasons. This situation is explained by many factors, including the level of availability of high-speed Internet, the level of digitalization of the local telephone network, the cost of IT services in various regions of our country. The article identified the current problems of the modern system of electronic (distance) education in the Russian Federation, revealed the impact of these problems on the practice of digital learning, examined the challenges and threats of implementing the e-learning system in practice, including those related to the digital inequality of Russian territories. The authors presented an analysis of statistical data that characterize the level of students’ access to broadband internet in various regions of Russia, which is required for the normal functioning of modern educational platforms. As a result of the analysis, the authors of the article formulated proposals to reduce the risks of distance education, as well as possible ways of its improvement.

ІТ-ПОСЛУГА ЯК ЕКОНОМІЧНА КАТЕГОРІЯ

У наукових фахових виданнях недостатньо уваги приділено дослідженню ІТ-послуги як економічної категорії. Це формує неправильне її трактування у практичній площині та обумовлює проблеми неефективної побудови системи управління фінансами в ІТ- компаніях. Автором запропоновано розглядати ІТ-послугу як ІТ-продукт, результат людської діяльності, який продається та купується на ринку; розмежовано поняття ІТ-продукт, ІТ-послуга та ІТ-товар. Встановлено, що первинним поняттям є ІТ- продукт, тобто результат діяльності розробника чи сукупності розробників, який конкретизується у ІТ-послузі, яка є ІТ-товаром, якщо вона виробляється для продажу, і цей продаж стає економічною діяльністю ІТ-компанії. Виділено та досліджено споживчу та мінову вартості ІТ-послуги. Споживча вартість виражається через усвідомлення споживачем корисності ІТ-послуги, її здатність забезпечувати можливість реалізації діджитал-інтересів споживача. Мінова вартість ІТ-послуги характеризується обсягом фінансових ресурсів та є платою споживача за можливість цифровізувати власні бізнес- процеси. У межах мінової вартості виділено тариф фінансової винагороди, що містить три взаємопов’язані складові: собівартість, операційні витрати та маржинальний прибуток.

THE ROLE OF HUMAN CAPITAL OF IT-SERVICES IN THE DEVELOPMENT OF FOREIGN ECONOMIC ACTIVITIES OF UKRAINE

The article deals with the current state of the information technology market in Ukraine, the role of human capital and peculiarities of its influence on the country's foreign economic activity. The basic processes and tendencies of Ukrainian IT market functioning, the main prospects of IT sector development were analyzed as well as the main problems of the information technology market and directions of their solution. At present, the internal IT service market in Ukraine meets the following characteristics: minimization of IT service costs; infringement of intellectual property law; satisfactory demand for IT services; shortage supply of qualified IT specialists due to imbalances in the training of technical specialists in higher education institutions; imperfection of IT management in companies leads to the inability to implement the growth strategy. There are two main factors that stimulate the development of the internal IT sector: first, is a human capital situation; second, is a public policy and its priorities in supporting competitive industries. The key success factor of a rapid development of foreign economic activity in Ukraine is to establish balance between the external and internal IT service markets. In order to improve the foreign economic activity of Ukraine, it is necessary for the state and the owners of IT companies to force on the development of the internal IT service market as the low level of the internal market hinders the development of the external IT relationships. The internal sector is not attractive to IT companies usually because of low pay and poor management quality. Therefore, in our work we considered in details the problems related to human capital in the search of any opportunities for the development of foreign economic activity of our country. It was concluded that IT market will remain one of the most prospective sectors of Ukraine that develops its foreign economic activity.

Advantages of SaaS software in comparison with on-premises software

Software-as-a-Service (SaaS) is becoming a popular outsourcing option for customers interested in paying for the right to access a standardized set of functions of the necessary software via the Internet. Due to the low cost of the service and the lack of high initial costs, the business becomes interested in using this technology. Software as a service allows you to significantly reduce the cost of IT services, to rethink the entire process of automating the business-processes of companies and creating software by eliminating high initial investments in infrastructure and its subsequent maintenance. Considering these advantages of SaaS over on-premises applications, business is increasingly talking about the possibility of a full transition to the use of SaaS services. In this paper, the concept of SaaS software, the architecture of this kind of applications, their distribution models and long-term use costs are analyzed, and this approach is compared with on-premises software in the above issues. Based on the analysis of actual data, recommendations were made on the topic of whether to abandon the usual set of technologies in favor of SaaS and which companies should take such actions.

Prioritizing the Critical Factors of Cloud Computing Adoption Using Multi-criteria Decision-making Techniques

Cloud Computing (CC) is a paradigm shift with the potential of transforming the information and communication technology (ICT) industry. ICT is an integral part of all businesses, and CC helps in lightening the burden of massive ICT investments. Thus, it is essential to understand the factors that influence CC adoption. The purpose of this study is to identify and rank critical factors for CC adoption in the Indian context. The research has adopted mixed methodology (qualitative and quantitative). Experts from 13 organizations (including 8 cloud service providers (CSPs) and 5 cloud service users (CSUs)) are interviewed. Content analysis is used to confirm existing factors and identify new factors in the Indian context. Qualitative analysis has identified four new factors, namely, ‘time to market’, ‘futuristic’, ‘resistance to change’ and ‘financial losses’ (arising from security and resource availability). The quantitative part of the research used analytic hierarchy process (AHP) and fuzzy analytic hierarchy process (FAHP) techniques to rank the factors. The analysis revealed ‘IT service cost’ and ‘time to market’ as the most critical factor through FAHP and AHP respectively. However, ‘organization size’ is reported the least critical for CC adoption through both the methods. The results also highlight divergence among the criticality of CC adoption factors using the two techniques. The study is very useful for CSPs and key decision-makers to understand the critical adoption factors and judiciously strategize for CC service promotions. It will also help users to wisely decide while making CC adoption decision.

A Theoretical Study on Improvement of Public Delivery System According to IT Service Cost Estimation

Forecasting ordering size and performance cost correctly in the ordering of IT service projects and the initial stage of performance is a very important factor not only to the ordering body but also the company who performs the project. Middle standing IT service companies receive/perform public IT service project, substituting large companies, after 2013 amendment of Software Industry Promotion Act. However, the business competence accumulated by middle standing IT service companies is relatively insufficient in project management ability compared with large companies, and the style that project companies bear all risks of the project, such as Turn-key order in the market focused on large companies in the past, has great risk to the ordering body, project company, and service beneficiaries in quality, costs, profit and delivery date. Currently, the market centered on middle standing IT service companies deteriorates the profitability of interested parties, which makes IT service ecosystem as an element of cost increase due to reduction of ordering size, low earnings yield, and increase of management expenses. Therefore, there is necessity that the cost calculation and order style structure for IT services, in which project companies should bear all the risk of project performance, should be improved. This treatise is going to analyze the IT service market ecosystem and agreement, project performance style upon current IT service project cost calculation method based on SW lifespan process and suggest improvement methods.

Chargeback for cloud services

With pay-per-use pricing models, elastic scaling of resources, and the use of shared virtualized infrastructures, cloud computing offers more efficient use of capital and agility. To leverage the advantages of cloud computing, organizations have to introduce cloud-specific chargeback practices. Organizations have to allocate IT service costs to business users in a way that reflects service consumption. To help organizations become effective users of cloud services, this article provides an overview of the factors that influence chargeback in the cloud services. This is an initial work that determines the factors influencing the chargeback in the cloud services. The findings of this research facilitate organizations to realize the implications of the cloud for their chargeback.

Role of cloud computing as technology innovation in small and medium enterprises in South Africa

The paper discusses cloud computing as a technology innovation for small and medium enterprises (SMEs) in South Africa to improve competitiveness, retain sustainability and maintain cost-effectively. The concept of duality of structures (DoS) of Giddens’ Structuration Theory was used as a lens through which to understand and interpret the factors influencing the readiness of SMEs to adopt cloud computing as a lens to innovate their businesses and become competitive in the face of global economic slowdown, high cost of IT services and inadequate e-competency. The purpose of the study was to determine the readiness of SMEs to innovate their businesses using technology solutions such as cloud computing. An extensive investigation on sixteen (16) SMEs from Gauteng and Mpumalang Provinces indicated a number of factors suggested by DoS have influenced the readiness of SMEs to adopt technology. The perspective is that clouding computing adoption as a technology innovation suggests a significant trend with the potential to increase agility and lower costs of IT services. The finding of the study is a general framework to guide SMEs to assess their readiness to adopting these technologies to save costs, improve their efficiency and competitive position

Living IT infrastructures — An ontology-based approach to aligning IT infrastructure capacity and business needs

Changes in organizational processes often interact with changes in the IT infrastructure. Accounting for the structural and economic consequences of changes to the modern IT infrastructure remains a challenge, as their complexity can affect more than one business process, and the need to share a common understanding between the IT and the business management challenges current IT governance practices. An integrative perspective of business processes and IT resources would help meet these challenges, but despite some progress such a perspective remains to be developed. This paper proposes a domain ontology – an Ontology for Linking Processes and IT infrastructure (OLPIT) – to model the relationship between IT resources and business processes for the purpose of measuring the business value of IT. The ontology was developed and evaluated in the context of a design research project conducted in the Hilti Corporation, an international manufacturing company, with the aim of defining how IT impacts the business and calculating the cost of IT services used.

IaaS Implementation of a Private Cloud using Open Source Technology

Cloud Computing is a field of IT that can revolutionize the traditional computing facilities. Cloud Computing gives a new view to our hardware and software facilities by making them elastic rather than scalable. The system can be scaled up or down according to a user’s need. The use of open source technology is a turning point in providing cloud computing infrastructure to reduce the cost by a large magnitude. We can build our own private clouds and share resources viz. hardware and software without making any investment. The aim of this paper is to provide open source solution to build a private cloud. Iaas(Infrastructure as a service) implementation means to implement a private cloud wherein we can share hardware resources so as to reduce the cost of IT services of an organization.

Decision-making in cloud computing environments: A cost and risk based approach

In this article a sophisticated formal mathematical decision model is developed that supports the selection of Cloud Computing services in a multisourcing scenario. The objective is to determine the selection of appropriate Cloud Computing services offered by different providers. In order to do so, we consider cost as well as risk factors which are relevant to the decision scope. For example, coordination costs, IT service costs, maintenance costs and the costs of taken risks were compared. Risks are modeled by means of the three common security objectives integrity, confidentiality and availability. The managerial implications of the model lie in the sustainable decision support and the comprehensive decision approach. The formal model is prototypically implemented using a software tool and examined with the help of a simulation study in three realistic scenarios and a sensitivity analysis.

Service analytics framework for web-delivered services

Web-delivered service is an emerging approach for IT service to reduce IT service cost and improve delivery efficiency by leveraging the partnership and web technology. This paper proposes a three-tier analytical framework of web-delivered service to improve business deign based on the centralised information from the platform. At business model design tier, a role-based service ecosystem modelling method is presented to contain the duplication and evolvement of participants' functionalities within the same model. Through the model, we can analyse the impact of business model on the business performance. At service analytics tier, we summarise the available data and categorise the operational analysis by roles. At self-transform tier, several potential functionalities are listed to help end client to do business transformation by themselves. Based on such framework, a case study in mini-ERP services is presented to illustrate how the analytics technology can help in business design of web-delivered service.

Determining the cost of IT services

Providing managerial information to explain costs in the context of personnel and equipment activities and processes.