Implement an IT Chargeback System

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Business units voraciously consume IT services and don’t understand the actual costs of IT. This is due to lack of IT cost transparency and business stakeholder accountability for consumption of IT services.
Business units perceive IT costs as uncompetitive, resulting in shadow IT and a negative perception of IT.
Business executives have decided to implement an IT chargeback program and IT must ensure the program succeeds.

Our Advice

Critical Insight

Price IT services so that business consumers find them meaningful, measurable, and manageable:

The business must understand what they are being charged for. If they can’t understand the value, you’ve chosen the wrong basis for charge.
Business units must be able to control and track their consumption levels, or they will feel powerless to control costs and you’ll never attain real buy-in.

Impact and Result

Explain IT costs in ways that matter to the business. Instead of focusing on what IT pays for, discuss the value that IT brings to the business by defining IT services and how they serve business users.
Develop a chargeback model that brings transparency to the flow of IT costs through to business value. Demonstrate how a good chargeback model can bring about fair “pay-for-value” and “pay-for-what-you-use” pricing.
Communicate IT chargeback openly and manage change effectively. Business owners will want to know how their profit and loss statements will be affected by the new pricing model.

Implement an IT Chargeback System Research & Tools

Start here – read the Executive Brief

Read our concise Executive Brief to find out why you should implement an IT chargeback program, review Info-Tech’s methodology, and understand the four ways we can support you in completing this project.

Implement an IT Chargeback System – Executive Brief

1. Launch

Make the case for IT chargeback, then assess the financial maturity of the organization and identify a pathway to success. Create a chargeback governance model.

2. Define

Develop a chargeback model, including identifying user-facing IT services, allocating IT costs to services, and setting up the chargeback program.

3. Implement

Communicate the rollout of the IT chargeback model and establish a process for recovering IT services costs from business units.

4. Revise

Gather and analyze feedback from business owners, making necessary modifications to the chargeback model and communicating the implications.

Member Testimonials

After each Info-Tech experience, we ask our members to quantify the real-time savings, monetary impact, and project improvements our research helped them achieve. See our top member experiences for this blueprint and what our clients have to say.

8.0/10

Overall Impact

$1,559

Average $ Saved

Average Days Saved

Client

Experience

Impact

$ Saved

Days Saved

Testimonial

Christiana Care

Guided Implementation

8/10

$1,559

it was a good conversation about EA generally and tools specifically.

County of San Luis Obispo

Guided Implementation

8/10

N/A

Good corroboration by InfoTech's analyst of our current approach to fee development plus a recommendation to look into IT Financial Management too... Read More

County of Napa

Guided Implementation

9/10

$11,070

Gainesville Regional Utilities

Guided Implementation

10/10

N/A

120

Graham is my hero!!! It is amazing how much I learned within this 1 hour call. I was given a task to develop a chargeback process so I jumped in... Read More

Load More Testimonials

Workshop: Implement an IT Chargeback System

Workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn't enough, we offer low-cost delivery of our project workshops. We take you through every phase of your project and ensure that you have a roadmap in place to complete your project successfully.

Module 1: Kick-Off IT Chargeback

The Purpose

Make the case for IT chargeback.
Identify the current and target state of chargeback maturity.
Establish a chargeback governance model.

Key Benefits Achieved

Investigated the benefits and challenges of implementing IT chargeback.
Understanding of the reasons why traditional chargeback approaches fail.
Identified the specific pathway to chargeback success.

Activities

Outputs

1.1

Investigate the benefits and challenges of implementing IT chargeback

Defined IT chargeback mandate

1.2

Educate business owners and executives on IT chargeback

IT chargeback kick-off presentation

1.3

Identify the current and target state of chargeback maturity

Chargeback maturity assessment

1.4

Establish chargeback governance

IT chargeback governance model

Module 2: Develop the Chargeback Model

The Purpose

Develop a chargeback model.
Identify the customers and user-facing services.
Allocate IT costs.
Determine chargeable service units.

Key Benefits Achieved

Identified IT customers.
Identified user-facing services and generated descriptions for them.
Allocated IT costs to IT services.
Identified meaningful, measurable, and manageable chargeback service units.

Activities

Outputs

2.1

Identify user-facing services and generate descriptions

High-level service catalog

2.2

Allocate costs to user-facing services

2.3

Determine chargeable service units and pricing

2.4

Track consumption

2.5

Determine service charges

Chargeback model

Module 3: Communicate IT Chargeback

The Purpose

Communicate the implementation of IT chargeback.
Establish a process for recovering the costs of IT services from business units.
Share the financial results of the charge cycle with business owners.

Key Benefits Achieved

Managed the transition to charging and recovering the costs of IT services from business units.
Communicated the implementation of IT chargeback and shared the financial results with business owners.

Activities

Outputs

3.1

Create a communication plan

IT chargeback communication plan

3.2

Deliver a chargeback rollout presentation

IT chargeback rollout presentation

3.3

Establish a process for recovering IT costs from business units

IT service cost recovery process

3.4

Share the financial results from the charge cycle with business owners

IT chargeback financial presentation

Module 4: Review the Chargeback Model

The Purpose

Gather and analyze feedback from business owners on the chargeback model.
Make necessary modifications to the chargeback model and communicate implications.

Key Benefits Achieved

Gathered business stakeholder feedback on the chargeback model.
Made necessary modifications to the chargeback model to increase satisfaction and accuracy.
Managed changes by communicating the implications to business owners in a structured manner.

Activities

Outputs

4.1

Address stakeholder pain points and highly disputed costs

4.2

Update the chargeback model

Revised chargeback model with business feedback, change log, and modifications

4.3

Communicate the chargeback model changes and implications to business units

Chargeback change communication

About Info-Tech

Info-Tech Research Group is the world’s fastest-growing information technology research and advisory company, proudly serving over 30,000 IT professionals.

We produce unbiased and highly relevant research to help CIOs and IT leaders make strategic, timely, and well-informed decisions. We partner closely with IT teams to provide everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.

What Is a Blueprint?

A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your IT problems.

Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.

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