Answer the question from the book - Essay Example

in other instances, most of the IT departments do not have budgets of their own. They, in most cases charge other departments for the services that they provide to them. As such, it becomes hard for the department to project its expenditure levels. Moreover, equipment keeps changing, with the increase in the level of technology and innovation. It makes it difficult to track this whole expenditure record, one that puts into consideration all the expenses including the miscellaneous. 2. To answer the question as to whether IT systems are an expense or an asset, first it is important to understand the difference between an asset and an expense.

While an asset is an economic resource, an expense takes away economic resources. Initial investments in IT systems are an asset to an organization like IVK (Austin et al. 54). On the other hand, they are an expense if they became obsolete. It is unfair classifying the systems as expenses, despite their high initial costs. For instance, telephones were an expense when every department required them. They made communication within the organization easy and simple, and more efficient. They simplified the mode of communication in the organization, and made the daily operations easy.

Activities ran smoothly with improved communication. Their contribution to the overall out was overwhelming. These were assets to the organization. However, with the technological advancement in the organizations, there was the introduction of better communication methods such as e-mail. This made telephones obsolete, making them an expense, as the organization had to faze them out indefinitely. This makes them more an expense at the end. 3. IT as a department has little expenses. Because the department provides services to other departments, it is important for the organization to allocate the IT expenses to these departments.

On its own, the IT department spends less, as it only require keeping its operations going. The main reason for the establishment of IT departments in organizations was to provide technology and communication services to the rest departments. This makes IT the biggest and most interactive department in an organization, as the organization entirely relies on it for these services. Choosing to allocate all IT related expenses to the IT department would leave it with a huge budget. Nonetheless, it is difficult to track all expenses of the IT department.

Condensing all the organizational expenses on IT services under the IT department, there would be no track of organizational expenditure on the IT department, and thus poor track of the organizational expenses. 4. The IT should operate just like any other organizational department. Although, due to the sensitivity in operations of the IT department, in most cases, the department runs its operations independently, there should be a limit as to how far this freedom could go. As established by Reuben, it is hard to keep track of all the expenditures in the IT department (Austin et al. 61). On the other hand, there is the need for monitoring of its operations as well as regulation.

Therefore, the department should not be independent altogether. There should be a framework regulating the amount IT spends, to make sure it does not overstate its budget. 5. Acquiring new systems is an expensive affair. Therefore, most of the organizations opt to maintain the existing systems, as long as their importance