Run cost handover
Draft for review, 21 October 2026. Public sources only.

Platform owners are surprised by project run cost when it has no object, no owner and no budget year until go-live

An action plan for carrying a project's recurrent cost through the ITFM cycle in a government agency, so the owner who inherits the service has seen the number, agreed it and budgeted for it before the first invoice. Six moves, each placed in the cycle, each with the evidence behind it. No framework supplies the whole method; the pieces come from five places and the gaps are stated.

Why the handover fails in every framework checked

Capital and recurrent money are different instruments. Capital is appropriated once, against a business case, and assured through delivery gates. Recurrent funding is a baseline rolled forward each year that no project has a claim on. The appraisal standards all demand a whole-of-life estimate (the UK Green Book, read directly; the NSW business case template and the Commonwealth oversight framework, seen only in snippets and summaries), so the run cost is written into the economic case.19,21,40 It then goes nowhere. NSW's digital assurance gates do ask the question: Gate 2 validates that the "funding model to operate is sustainable for whole of life", and Gate 5 looks for "clearly defined sustainability of funding to deliver the system into the future in BAU". But a gateway review is advisory, does not "represent a government decision in relation to funding", and tests whether the funding is defined, not whether a recurrent line exists in the agency's budget.20 The cost model has no place for a service that does not yet exist. And the budget build for the go-live year starts from last year's baseline, in which the new service does not appear. Where an agency already has a CFO commitment to ongoing costs or a gate question on funding sustainability, the pattern still holds if those produce a statement in a document rather than an object, an owner and a line in the ITFM model. Test the pattern against the agency's own approval map and budget calendar before adopting the plan.

The result is well documented. The UK's 2025 review of digital government found that less than half (43 to 46 per cent) of new departmental digital spending reviewed in the 2020 and 2021 spending reviews was resource funding, against a 78 per cent public-sector benchmark from Gartner, and that third-party fees are more easily treated as capital.23 The US GAO puts about 80 per cent of federal IT spend in operations and maintenance, and in 2012 found that estimates for many major investments omitted operations and maintenance even though six of eight agencies had a whole-of-life costing policy.11,13 The Swiss Federal Audit Office reported in 2025 that the impact of new digitalisation projects on federal IT costs "is not sufficiently taken into account", with operating-cost estimates not always stated in service agreements or in dispatches to Parliament.38 Trade press reporting Gartner guidance made the same point in 2012: implementation cost and the operating cost that follows are "often treated separately", and a 2024 Gartner note, revised in 2026, still argues for integrating capital budgeting with total cost of ownership.28,29

The frameworks an ITFM practice would reach for do not close the gap. The current TBM taxonomy (v5.0.1, July 2025) has no project category and no run-versus-change split; that split lived in the original TBM framework's value conversations, not in the taxonomy.2,3 ITIL 4's service financial management practice leaves investment analysis out of its scope (seen in snippets).27 No ITIL, COBIT, ISO 20000 or AWS operational readiness review text found makes funded run cost a go-live criterion; of the frameworks checked, only NSW's assurance framework names funding sustainability as a gate item, and only as a review question. The plan below assembles what does exist.

Six moves, placed in the ITFM cycle

Each move fixes one of the three missing things: an object in the cost model, an owner, and a budget year. Together they give the platform owner the number at the business case, a signature at handover, and a variance record afterwards. Two things the moves do not do: they do not create authority to spend, which stays with the agency's delegations and Treasury, and they do not replace the in-year forecasting the ITFM cycle already runs.

  1. Business case lodgedService created in the cost model
  2. Project planBuild view and run view in one plan
  3. Every gateOne estimate, with range, re-checked
  4. Annual budget buildRun ramp of in-flight projects ruled on
  5. Go-livePlatform owner signs for the money
  6. Steady stateAnnual review against the estimate
The cycle order matters. Moves 1 to 3 give the run cost an object, an owner and an estimate before delivery money is committed, and the recurrent funding source is named in the business case; move 4 is where that source is confirmed each year and where in-flight changes are ruled on; moves 5 and 6 make the estimate accountable.
1

Create the service in the cost model when the business case is lodged

The service or application the project will deliver gets its record in the TBM model on the day the business case is submitted, with a lifecycle status of "in build", the platform owner named, and the cost centre that will carry it identified. A 2026 article on the TBM Council's site says new service onboarding must align with the taxonomy's service layer, that the cost estimate is given at the demand submission step, and that application owners are "mandated to oversee application TCO".1 US federal agencies classify every IT investment as either development (new or major enhancement) or steady-state operations and maintenance, the two states this move distinguishes.15 It is the move that makes the other five possible: without an object there is nothing to forecast against, nothing to show the owner, and nothing to review later.

Stage
Business case submission
Signs
ITFM lead creates; platform owner acknowledges ownership
Evidence
TBM Council 2026 M; US agency CPIC practice M; Nicus 2025 on mapping where run cost lands L
2

Give every project a build view and a run view in the same plan

The project plan carries two views side by side: build (the cost to deliver, by year, until go-live) and run (the cost to operate, by TBM tower, by year, from the go-live year onward). Lifecycle and accounting treatment are separate axes: build work can carry recurrent expense (expensed configuration, subscriptions and support that start before go-live) and a running service can carry capital renewal, so each line records its capital or recurrent treatment and its start date separately, validated by Finance. The run view is coded to the platform owner's cost centre and flagged as unfunded until the budget accepts it. Apptio has sold exactly this capability since 2016, as "visibility into project build and run costs to understand the impact of projects over time on the operational budget", and it has since connected build and run views to portfolio and agile tooling.4,5 An Apptio blog, seen only as a search snippet, argues that run costs must be projected and attached to someone's budget, and describes the handover as a debit-and-credit transfer.4 US federal reporting classifies each investment's spend as development or as operations and maintenance, and the GAO's 2012 review put about 69 per cent of the US$79 billion federal IT budget in operations and maintenance.12,15 At go-live the transfer is that debit to the project and credit to the owner's run budget. It is a management-budget movement inside the ITFM plan, reconciled to Finance's budget records; it does not create authority to spend, which comes from the recurrent funding source approved under move 4. Where capitalised cost is depreciated, practitioners say the treatment depends on accounting practice, with fixed-asset depreciation usually going straight to the towers as run cost; this plan sends it to the towers so that the service's full cost is visible to its owner.6

Stage
Project planning, maintained through delivery
Signs
Project manager maintains; ITFM lead holds the model
Evidence
Apptio product and guidance L; OMB A-11 reporting via GAO H; Apptio practitioner forum on depreciation L
3

Carry one run-cost estimate, with a range and a confidence level, through every gate

Build the estimate bottom-up from the towers: compute, storage, network, software licences and vendor maintenance, support labour, and depreciation where cost is capitalised. Record it once, with a range and a stated confidence, in a register that every gate re-reads. Keep three views of the same estimate, because a CFO needs each: the full allocated cost the TBM model will show (including shared platforms and depreciation), the incremental expense the agency must newly fund, and the cash requirement (depreciation is not cash; already-employed staff reallocated to the service are not new money). Allocation rules must stop the same cost being counted against both the project and the receiving service. Re-estimate at minimum when vendor pricing lands at procurement, and escalate when the new figure moves outside the agreed tolerance, with a named route for funding changes between annual rounds so that a project does not commit the agency to a run cost nobody has approved. The FinOps Foundation describes this register at its highest maturity level: one estimate, with an explicit range and confidence level, carried across the prioritisation, commercial and architecture gates, with Finance setting the accuracy required and leadership setting the variance thresholds.8 The GAO's cost estimating guide is the US federal best-practice method, and the GAO's 2012 review of sixteen major investments found all but one estimate not fully reliable and many omitting operations cost, and recommended that the agencies fix their estimating policies and update the estimates.11,14

Do not use the published ratios as a method. The "15 to 20 per cent of build cost a year" heuristic could not be traced to any primary source, Gartner's "build is 8 per cent of fifteen-year total cost" survives only in second-hand citations and probably includes enhancement spend, and the vendor figures (Apptio's 15 to 30 per cent, Nicus's 6 per cent and 20 per cent) give no basis.4,7 The only consistently reported ratio is vendor licence maintenance at 18 to 22 per cent of licence fee, which measures something narrower.32 Project cost estimates themselves have a fat tail: in a sample of 1,471 IT projects, one in six overran by 200 per cent on average, which is the reason to carry a range rather than a point.33 The agency's own actuals, collected under move 6, are the replacement for borrowed ratios.

Stage
Business case, then each assurance gate and procurement
Signs
Project estimates; ITFM lead sets method and tolerance; platform owner reviews each revision
Evidence
FinOps Planning and Estimating H/M (cloud-scoped); GAO-12-629 and GAO cost guide H; ratios L
4

Put the run ramp of in-flight projects into the annual budget build as a standing step

Before the recurrent baseline is set for the coming year, produce one report from the register: every in-flight project's run cost by platform owner and by year, with its funding status. The CFO and CIO rule on each line as funded from an identified recurrent source, offset against a named saving, or stopped. An offset counts only with a savings owner, an amount, a date, a judgement on whether it is cash, and a mechanism that releases it to the receiving budget; dual running, exit costs and any shortfall need their own line. This is the public-finance practice the GFOA sets for capital plans, where the plan forecasts the operating and maintenance costs each project will add in later years.16 NSW's Digital Restart Fund already requires CFO sign-off on each investment request "including a commitment to fund ongoing costs", and Western Australia's Treasury requires a total-cost-of-ownership model, with ongoing expenditure classified against standardised TBM taxonomies, for ICT proposals over $5 million.17,18 The NSW wording was read on the live page; the WA rule was confirmed only from search snippets and should be read in full before being quoted to a client. The FinOps Foundation puts an affordability check at the prioritisation gate before funding is committed and allocates budgets to named budget owners, and the UK's 2026 assurance playbook defines whole-life cost to include ongoing operational expenses.9,22

The point of the step is to make the trade explicit. If Treasury will not fund the tail, the agency decides at approval what it will stop doing, rather than discovering the gap in the service's third year. The contrasting pattern is the one Apptio reports from a large insurer that sets its run budget and its grow budget at two separate events in the same annual July process: that is a description of the fence, not a model to copy.4

Stage
Annual budget build, before the recurrent baseline is locked
Signs
CFO and CIO rule; ITFM lead prepares; platform owners confirm their lines
Evidence
GFOA M; NSW DRF H; WA DTF M (snippet); FinOps Budgeting on named budget owners and affordability checks H/M; UK Digital Assurance Playbook on whole-life cost including ongoing operating expense H
5

Make the platform owner sign for the money at handover

No service enters the catalogue, and no project closes, until the platform owner has signed three things: the run-cost card built from the towers (all three views from move 3), the confirmed recurrent line for the remainder of the go-live year, the next financial year and the forward estimates, with the approval status of each year stated, and the ownership of any variance after that. Go-live and project closure are separate events; the agency names who can approve an exception and fund safe continuation if the line is not there when the service is ready. ITIL's service design package itemises the "financial resources required to operate the service (itemized)" in its implementation blueprint, and the package passes from design to transition.26 The UK government's service owner role carries "ensure appropriate funding is in place" as a core accountability, and a 2024 pilot is testing a single service owner role, with budget responsibility, across the UK's top 75 services.24,25 Digital NSW's Gate 5 lists "clearly defined sustainability of funding to deliver the system into the future in BAU" among its review objectives, asks for a target operating model and financial sustainability to operate, and wants the ongoing plan into operations clearly specified. A gateway review is advisory, so this move converts that review item into the agency's own acceptance criterion.20 On signature the lifecycle status flips to "run" and the budget transfer in move 2 is executed.

Stage
Go-live and project closure
Signs
Platform owner; countersigned by the ITFM lead
Evidence
ITIL 2011 service design package via secondary checklist M; UK DDaT service owner role H; Digital NSW Gate 5 guideline v3 H
6

Review every steady-state service against its business case estimate each year

Once a year, compare each service's actual run cost with the estimate it was approved on, record the variance against the project, and feed the result into the next budget build. This is the learning loop against the approval estimate, in addition to the in-year monitoring of actuals, commitments and the rolling forecast that the ITFM cycle already runs; an annual review alone finds an overspend after the point where it could be corrected. Separate demand, scope, price and allocation changes from estimating error, so the lesson is the right one. The US Office of Management and Budget requires the nearest thing: an annual operational analysis of every steady-state investment against a set list of factors, which the GAO found in 2012 that two agencies had performed partially and three not at all, before its recommendations were closed as implemented.12 The IT Capability Maturity Framework sets the metric: the percentage of actual costs that differ from projections by more than agreed tolerances.30 The FinOps Foundation treats the approval estimate as a forecast with its own accuracy record, revisited at go-live.10 Treat offsets and decommissioning savings as risks until the legacy system is actually switched off. The ANAO found decommissioning delays putting a Commonwealth programme's expected benefits at risk, and the UK NAO found a historical lack of focus on legacy systems in the budgetary process.39

Stage
Steady state, annually, feeding move 4
Signs
Platform owner reports; ITFM lead records the variance
Evidence
OMB A-11 operational analysis via GAO-13-87 H; IT-CMF v16 M/H; FinOps Forecasting H/M

Across all six: show the ramp from day one. The best-known academic study of chargeback, ten organisations in 1999, found it significantly influenced investment decisions in four, and what set those four apart was using chargeback to build communication and partnership between IT and the business.31 The forward run ramp belongs in the showback that platform owners and consumers see from the business case onward, not from the first invoice.

The structural alternative. Product or platform funding, where one owner holds both build and run budgets, removes the fence rather than policing it. A TBM Council article advocates value-stream funding, Gartner abstracts advocate product funding, and one retailer that moved from project to product-team funding reports a TBM model allocating about 80 per cent of technology spend to products; the SAFe guardrails exist so that "investments in technology, infrastructure, and maintenance aren't routinely ignored".1,34,37,41 No rigorous evaluation in a government setting was found, one practitioner account warns that a fixed run-rate can hide overruns, and a US practitioner argues that treating custom software as a capital expense works against it.35,36 It is the direction of travel, not a step this plan depends on.

What the evidence supports, and what it does not

ClaimSupportGrade
The mechanism: separate funding instruments, whole-of-life estimates that never become funded lines, gates that test readiness not fundingA synthesis: each link is supported separately by the UK review 2025, GAO 2012 and 2025, Swiss FAO 2025, NAO 2022 and Gartner 2012; no single source states the chainM/H
Whole-of-life costing is required at appraisal in the UK, in US federal agencies, and in NSW and the CommonwealthGreen Book 2026 read directly; GAO 2012 found six of eight agencies with a life-cycle cost requirement; TPG24-29 template and DTA framework seen only in snippetsH UK and US; M NSW and Commonwealth
Business-case estimates systematically omit or understate operations costGAO-12-629 (US federal); no cross-agency Australian study or peer-reviewed equivalent foundH for the US; M generalised
Moves 1 to 4 and 6 are each practised or prescribed somewhere; NSW's Gate 5 names funding sustainability as a review item, but no framework checked makes a funded recurrent line a binding handover conditionStandard-setter, government and vendor guidance as cited per moveM to L
Any of the six moves improves outcomesNo outcome evaluation found for any pattern; GAO reports partial compliance with the US annual reviewNot established
Published build-to-run ratiosNone traceable to a primary sourceL
NSW DRF CFO commitment to fund ongoing costsRead on the live Digital NSW pageH
WA TCO model wording and $5 million thresholdSearch snippets only; the guideline PDF could not be readM, verify
FinOps register and budget-owner patternsFinOps Foundation framework pages, written for cloud spendH/M, scope caveat

Grades: H, primary standard, legislation or audit read directly; M, secondary source, analyst abstract or a primary source seen only in a search snippet; L, vendor, forum or untraced heuristic.

Not found in what was checked. Any TBM Council planning construct for project run cost beyond the 2026 article. Any ITIL 4, COBIT 2019 or ISO 20000 text making funded run cost an acceptance criterion (the ITIL appendix and COBIT activity lists were not retrievable; the Digital NSW Gate 5 guideline, by contrast, was read in full). A Gartner benchmark of run cost per build dollar. A peer-reviewed comparison of business-case run estimates with actuals. A rigorous evaluation of product funding in government. Searches covered the TBM Council, Apptio, Gartner and Forrester abstracts, AXELOS, ISACA, ISO, OMB and GAO, NSW Treasury, Digital NSW, DTA, Victorian and WA treasuries, HM Treasury, GDS and NAO, the FinOps Foundation, SAFe and the IT-CMF.

Three things to settle in review

  1. Does the agency convert Gate 5's funding-sustainability review item into its own go-live condition, with the platform owner's signature?

    Recommended: yes, as the handover signature in move 5, written into the service acceptance criteria. The gateway review only asks whether sustainability is defined; the signature is the last point at which the platform owner can refuse an unfunded service, after the stop decision in move 4.

  2. Where does the run-ramp report sit in the budget calendar?

    Recommended: as a standing input before the recurrent baseline is locked, in the same pack as the capital programme, so that the two are ruled on together rather than at separate events.

  3. Does the estimate register live in the ITFM tool or in a spreadsheet first?

    Recommended: in the tool's planning module where one is licensed, otherwise a register with the same fields (service, owner, tower lines by year, range, confidence, gate, status), migrated once the process has run one cycle.

Sources

Numbered as cited above. Public web only; no client material. Where a source was seen only in a search snippet, the grade says so.

  1. TBM Council, "The Value Stream Steward: how TBM empowers the product owner to master TCO and ROI", updated 30 Jan 2026. tbmcouncil.org M
  2. TBM Council, TBM Taxonomy v5.0.1, 18 Jul 2025. tbmcouncil.org/taxonomy H
  3. TBM Council, "The Original TBM Framework" (Run the Business and Change the Business value conversations), undated. tbmcouncil.org H
  4. Apptio, press release on Project Financial Planning, 9 Nov 2016, Apptio case study of a Fortune 100 life insurer's planning cycle, undated, and an undated Apptio blog on project run costs (seen as a search snippet; the page did not resolve). apptio.com; case study; blog L
  5. iTWire, "Apptio improves support for technology investment decisions" (ApptioOne Integrated Investment Planning), 16 Jun 2022. itwire.com L/M
  6. IBM Apptio community, "Projects depreciation" practitioner thread, May 2017. community.ibm.com L
  7. Nicus, "Build to run: the hidden expense driver killing your IT budget", 31 May 2025. nicus.com L
  8. FinOps Foundation, Framework capability: Planning and Estimating, undated. finops.org H/M
  9. FinOps Foundation, Framework capability: Budgeting, undated. finops.org H/M
  10. FinOps Foundation, Framework capability: Forecasting, undated. finops.org H/M
  11. US Government Accountability Office, GAO-12-629, review of cost estimates for sixteen major IT investments, 11 Jul 2012. gao.gov H
  12. US Government Accountability Office, GAO-13-87, oversight of federal IT investments in operations and maintenance (annual operational analysis), Oct 2012. gao.gov H
  13. US Government Accountability Office, GAO-25-107795, "Agencies Need to Plan for Modernizing Critical Decades-Old Legacy Systems", 17 Jul 2025. gao.gov H
  14. US Government Accountability Office, GAO-20-195G, Cost Estimating and Assessment Guide, Mar 2020. gao.gov H (existence and purpose; operating-cost chapter not read)
  15. US Department of Justice Office of the Inspector General, report 06-02, appendix 9 (development versus steady-state investment definitions), 2005. oig.justice.gov M
  16. Government Finance Officers Association, best practice: Multi-Year Capital Planning. gfoa.org M (snippet)
  17. Digital NSW, Digital Restart Fund guidelines, stage 4 (CFO sign-off including commitment to fund ongoing costs) and stage 5. digital.nsw.gov.au H (read on the live page)
  18. Western Australian Department of Treasury and Finance, Practice Note: Tools and Guidance for ICT Projects (Dec 2025, the $5 million rule) and ICT Modernisation TCO and Benefits Model instructions (Jul 2026, the TBM classification). practice note; TCO instructions M (snippets; PDFs not readable)
  19. NSW Treasury, TPG24-29 NSW Government Business Case Guidelines, Nov 2024, updated Nov 2025. arp.nsw.gov.au M (landing page only; body not read)
  20. Digital NSW, Digital Assurance Framework Gate 5 Review: Guideline and Workbook, v3, April 2026 (read in full; v1.0 withdrawn). digital.nsw.gov.au H
  21. HM Treasury, The Green Book 2026, 5 Feb 2026. gov.uk H
  22. UK Government, Digital Assurance Playbook (replacing the digital and technology spend controls), 1 Apr 2026. gov.uk H
  23. UK Department for Science, Innovation and Technology, State of Digital Government Review, 21 Jan 2025. gov.uk H
  24. UK Government Digital and Data profession, Service Owner role definition, updated 30 May 2025. service.gov.uk H
  25. UK Central Digital and Data Office, "Single service owners: bridging the gaps to make great services", 7 May 2024. cddo.blog.gov.uk M
  26. IT Process Maps, Checklist: Service Design Package (ITIL Process Map, aligned to ITIL 2011). it-processmaps.com M
  27. AXELOS / PeopleCert, ITIL 4 Practice Guide: Service Financial Management (purpose and scope statement, seen in snippets). axelos.com M
  28. IT Business Edge, "Five tactics to protect IT investment funding", staff article reporting Gartner guidance (Stewart Buchanan), 14 Jun 2012. itbusinessedge.com M
  29. Gartner, "Integrate Capital Budgeting and TCO as Part of Advanced Business Architecture", 25 Sep 2024, revised 27 Apr 2026 (abstract only). gartner.com M
  30. Innovation Value Institute, IT-CMF v16, Total Cost of Ownership capability (maturity levels and metrics). portal.ivi.ie M/H
  31. Ross, J. W., Vitale, M. R. and Beath, C. M., "The untapped potential of IT chargeback", MIS Quarterly, 1999. misq.org H/M (abstract only; ten-organisation sample)
  32. Forrester, "Software maintenance fees may not be invulnerable to change after all", 29 Jun 2010 (18 to 22 per cent of licence fee); Avasant, "High software maintenance fees and what to do about them". forrester.com; avasant.com (Feb 2005) M
  33. Flyvbjerg, B. and Budzier, A., "Why your IT project may be riskier than you think", Harvard Business Review, Sep 2011. arxiv.org H/M (project cost, not operating cost)
  34. Scaled Agile, SAFe Lean Budget Guardrails. scaledagile.com H/M
  35. CIO.com, Altintepe, "Product funding and the burden of agility", 21 Jun 2019. cio.com L/M
  36. Jaquith, W., "Capital funding poisons software projects", 27 Mar 2026. waldo.jaquith.org M
  37. TBM Council, case study: how product TCO helped Lowe's modernise annual investment planning, 2022. tbmcouncil.org L/M (self-reported)
  38. Swiss Federal Audit Office, "Impact of digitalisation projects on IT operating costs", 15 Jan 2025. efk.admin.ch H (summary only)
  39. UK National Audit Office, "Modernising Defra's ageing digital services", 6 Dec 2022; Australian National Audit Office, Report No. 10 2020-21, welfare payment system redevelopment: managing risks while planning transition (seen in snippets). nao.org.uk; anao.gov.au H/M (ANAO seen as a snippet)
  40. Digital Transformation Agency, Digital and ICT Investment Oversight Framework and ICT Investment Approval Process (whole-of-life cost defined to include operational, capital and maintenance costs). digital.gov.au M (snippets; pages timed out)
  41. Gartner, "Three Use Cases On How Product Funding Unlocks Cost Optimization", 19 Nov 2025 (abstract only). gartner.com M