"What we cannot speak about we must pass over in silence" - (in)correctly arguing and comparing the costs of it investments in public sector

Authors:
Samuli Pekkola;Kimmo Wideroos
Affiliations:
Department of Business Information Management and Logistics, Tampere University of Technology, Tampere, Finland;Department of Business Information Management and Logistics, Tampere University of Technology, Tampere, Finland
Venue:
EGOVIS'10 Proceedings of the First international conference on Electronic government and the information systems perspective
Year:
2010

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Abstract

In our era of increasing capitalism a cost-based reasoning is often used, also in public sector, for arguing and comparing the costs within and between different institutions. One of the approaches is the total cost of ownership (TCO) where the costs are approached holistically so that, for example, IT costs per workstation, per person, or per IT staff can be presented. TCO is then used in arguing that a certain IT investment is needed because their TCO is better, worse, or different than of the others' TCO. In this paper we argue that this approach is incorrect and does not provide reliable basis for arguments or comparisons. We demonstrate this through analyzing three ministries' IT expenditures and a purchaser-provider split model and its pricing structure. We propose that as we cannot provide a reliable basis for cost-based reasoning, we should not speak about it but pass it over in silence. The need for new metrics and methods is thus evident.