Title: An innovative cost taxonomy: identifying and classifying costs of technology solutions

Authors: Yeimi Pena; Dario Ernesto Correal; Eduardo Miranda; Oscar González-Rojas

Addresses: Systems and Computing Engineering Department, Universidad de Los Andes, Cra. 1E No. 19A-40, Bogota, Colombia ' Systems and Computing Engineering Department, Universidad de Los Andes, Cra. 1E No. 19A-40, Bogota, Colombia ' Software Engineering Master's Program, Carnegie Mellon University, 300 S. Craig Street 268, 15213, Pittsburgh, PA, USA ' Systems and Computing Engineering Department, Universidad de Los Andes, Cra. 1E No. 19A-40, Bogota, Colombia

Abstract: Financial analysis of technology solutions is a crucial activity to determine the advisability of an IT investment. This analysis requires identifying and classifying the costs of the technology solution to support decision-making processes. Although previous research has developed cost taxonomies that support the identification of costs, companies still face difficulties due to technology diversity, the generic cost categories, and insufficient guidance for use. There is a need for supporting investment decisions and mitigating cost omissions and cost overruns. To address this gap, a cost taxonomy that provides the means to identify and classify costs of a technology solution is required. We propose a taxonomy that fits with the particular needs of technology solutions considering the technology deployment model, technology services required, and its life cycle phases. We evaluate the proposed taxonomy and the results demonstrating benefits that comprise lowering the risk of cost omission and increasing detail of the costs.

Keywords: cost taxonomy; technology investments; financial analysis; solution architecture; design science research; technology services; cost analysis.

DOI: 10.1504/IJBIS.2024.136886

International Journal of Business Information Systems, 2024 Vol.45 No.3, pp.397 - 428

Received: 13 Dec 2019
Accepted: 28 Feb 2021
Published online: 26 Feb 2024 *

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