Cost management tracks configuration item costs. The costs can be allocated to business units and used in reports.

Features

Use rate cards to properly track configuration item, contract, task, and labor costs
Defining configuration item (CI) costs
Tracking one-time costs for CIs
Processing recurring CI costs to generate expense lines
Distributing bulk costs to multiple expense line sources
Tracking costs related to tasks and projects
Aggregating configuration item costs and charging the total cost to a business service or application
Allocating expense lines to business units with flexible allocation rules
Tracking planned and actual budget costs by cost center

Activate

Turn on the plugin "Cost Management" in your ServiceNow instance. Not to be confused with Finance Service Management or Financial Management. Those are completely different applications. Kind of confusing I know!

Architecture

Before you start gathering requirements for Cost Management, it is important to read up on all the tables and code that runs it. There will likely be properties to adjust and slight business rule changes to make throughout the project.

Here you can read about the Cost Management Tables, properties, UI policies, business rules, and client scripts:

Installed with Cost Management

Rate Cards

There are four different types of rate cards in Cost Management.

CI Rate Card

A configuration item (CI) rate card is a group of recurring configuration item costs associated with multiple configuration items.

Setup of each of these rate cards involves:

Creating a CI rate cards against CIs. You can pick the CIs with a filter or manually.
Establishing a rate card cost for those CIs

For example, you'll likely setup CI rate cards for certain types of servers or network equipment.

You can tell how much an individual CI truly costs in terms of leases, purchases, and maintenance. ServiceNow uses Expense Lines, to add up all those costs. Also expense lines can be aggregated to apply all configuration item expenses to a parent business service or application with relationship paths.

Contract Rate Card

Capture operating costs by generating expense lines representing the cost of a contract. Associate a contract to certain assets and costs of those assets are tied to the contract.

This is similar to a rate card cost, except the contract contains all the costs. Where as with a rate card cost the costs accumulate.

Task Rate Cards

Task rate cards are templates used to define the type of task and the method of calculating the associated costs. They can help you determine the costs of a P1 incident or an emergency change for example.

There is two versions of Task Rate cards, a flat rate and "time worked" version of Task Rate Cards.

The Time Worked version uses the "Use Time Worked" checkbox. That way users can add up all the time spent on an incident and ServiceNow will automatically multiply it by their labor rate card to find out how much that incident or change really cost.

Labor Rate Cards

Labor rate cards are templates used to define worker's labor rates when calculating task cost based on time worked. Uses a reference only rate code to align rates with an external system.

You will likely get labor rate cards from HR or Finance and will have to import them into the system. They are somewhat secret, but are only approximations of labor costs. Sometimes you match labor rate cards to a User's Title or Department, but usually Title.

More information on how these rate cards work: Cost Sources

Using Distribution Costs and Rules

Distribution Costs are costs which can be divided among a group of records. For example, the cost of power at a datacenter which can be divided among the CIs in the datacenter. Distribution Rules determine how the Distribution Costs are divided among the CIs.

Allocating Expenses

Expenses can also be allocated to a business entity that is responsible for the expense.

This is not considered charge-back or billing but could be used as a source for billing. The primary purpose of expense allocation is to represent the consumer of the process that has incurred some expense. This can be accomplished by defining expense allocation rules.

By using Expense Allocation Rules, you can distribute the costs to multiple departments, cost centers, or groups.

BUDGETS

Customers sometimes ask me "Can ServiceNow make Budgets?"

Yes, but not as typically expected. Budgets take all that you learned from Expense Allocations and drive up to a cost center. It is more an automatic process, the only numbers you can punch in are dates and your planned costs.

This is often an more accurate depiction of what the costs were. Although more difficult to float numbers around. :)