Cost Pools and Sub Cost Pools represent the finance view of technology spend in the TBM model.
Use Cost Pools to classify what the organization pays for before that spend is allocated into towers, solutions, and consumers. This gives Finance, IT, FinOps, and business stakeholders a consistent starting point for cost transparency and accountability.
Cost Pools help turn raw financial data into a governed technology cost structure.
How Cost Pools fit the TBM model
Cost Pools sit at the finance foundation of the TBM model.
They answer the question: What type of technology cost is this?
The typical flow is:
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Financial data is loaded from source systems
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Spend is mapped to Cost Pools and Sub Cost Pools
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Cost Pool spend is allocated into Towers and Sub Towers
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Tower spend is connected to Solutions and Consumers where the model supports it
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The results become available in Cost Transparency, Analytics, showback, chargeback, and planning workflows
Cost Pool structure
|
Level |
Description |
|---|---|
|
Cost Pool |
A high-level financial category for technology spend |
|
Sub Cost Pool |
A more detailed classification under the Cost Pool |
Sub Cost Pools give teams more precision while preserving the higher-level cost structure needed for reporting and allocation.
Staffing-related costs
Staffing represents workforce-related technology costs. Depending on your organization's taxonomy and finance policy, staffing may include employee costs, contractor costs, temporary staff, vendor resources, project staffing, benefits, or related expenses.
Some organizations separate staffing into more detailed categories. Others keep staffing as a broader Cost Pool and use Sub Cost Pools, accounts, cost centers, vendors, or other dimensions for additional detail.
Operating expense Cost Pools
Operating expense categories represent technology costs that are usually expensed during the current financial period.
|
Cost Pool |
Use it for |
|---|---|
|
Staffing |
Employee, contractor, temporary staff, vendor resource, and related workforce costs, depending on the selected taxonomy |
|
Outside Services |
External providers, consulting, managed services, cloud services, and other service-based spend |
|
Hardware |
Non-capitalized hardware purchases, leases, maintenance, support, and depreciation where applicable |
|
Software |
Software purchases, licenses, maintenance, support, and amortization where applicable |
|
Facilities & Power |
Data center space, power, co-location, facilities, security, maintenance, and related operating costs |
|
Telecom |
Voice, data network connectivity, mobile, circuits, maintenance, support, and related telecom charges |
|
Internal Services |
Charges from internal shared services or internal business functions |
|
Other |
Miscellaneous or non-standard technology expenses that do not fit another Cost Pool |
Capital expense Cost Pools
Capital expense categories represent technology costs that are capitalized and recognized over time according to finance policy.
|
Cost Pool |
Use it for |
|---|---|
|
Staffing |
Capitalized employee, contractor, vendor resource, or project staffing costs, depending on finance policy and selected taxonomy |
|
Outside Services |
Capitalized third-party services or project-based implementation costs |
|
Hardware |
Hardware purchases above the capitalization threshold |
|
Software |
Perpetual software licenses, software development, or other capitalized software costs |
|
Facilities & Power |
Purchased facilities, facility improvements, or capitalized data center build-out costs |
|
Telecom |
Capitalized telecom infrastructure or related telecommunications investment |
Capitalization treatment depends on the organization's finance policy. Yarken uses the Cost Pool structure to support reporting once that financial classification is available.
Relationship with Towers
Cost Pools explain what was purchased or paid for.
Towers explain which technology function the spend supports.
For example:
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Software spend may support Application, Platform, Security, or End User towers
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Outside Services may support Delivery, Compute, Network, or IT Management towers
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Facilities & Power may support Data Center towers
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Telecom may support Network or End User services
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Staffing may support multiple towers depending on where the work is performed
Relationship with Cost Transparency and Cost Explorer
Cost Pools are visible across Cost Transparency dashboards and Cost Explorer.
Use Cost Transparency to review Cost Pool spend, variance, and trends.
Use Cost Explorer to validate how Cost Pool spend flows into downstream TBM layers and to identify spend that remains unmapped or partially allocated.
Next step
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