Chargebacks for IT Infrastructure Services

While the concept of chargeback has been around for many years now, in reality there are really few organizations which have implemented this really well. But it will also not be wrong to say that almost all organizations have initiated or have some form of chargeback mechanism in place but most of them do not cover all aspects of the services and assets. The easiest form is to charge departments for their spend on project work -- but the tricky part is with the operations and support side.

In its most mature form, it is a CIO's pushback to be taken seriously -- to shape the IT department as a profit center and not as a cost center. However there are several challenges that organizations face. However, this does not stop them from asking for such models from bidders when releasing an RFP.

The fact remains that in few organizations IT department really calls the shots. IT is still considered a support department and not really taken seriously. There are stories of CIOs who changed the way their companies did business - but for that the CIO needs to have a strong vision and leadership style along with a receptive boss who is ready to give him a chance.

Some other factors that have probably contributed to the lack of acceptance:

• Overall diminishing cost (seemingly, though TCO may not vary too much) of hardware resources
• Pushback from business which would not welcome this as it would make them more accountable and they would not be their careless self when asking for more!
• Lack of meaningful model which can be adapted and agreed by all. Given the complexity and variation of demand, it may actually be useful more in very large environments. In smaller ones, it may actually make sense to have some level of aggregation to manage costs
• Lack of acceptance and prevelance of service catalogs which are a pre-requisite for a good chargeback model. While ITIL has talked about service catalogs for some time, these are again not easy to implement and need to be really exhaustive and relevant

Am sure they may be more, but these come to mind as key ones.

It is difficult to say if it is good or bad and it rally depends on the size, scale and nature of business. Overall it is surely desirable to make business understand the cost of services they enjoy or demand but there has be a good tracking mechanism.