Implement IT Chargeback

IT isn’t free, so why are you giving it away?


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Your Challenge

  • 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.

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Get to Action

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.

  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.

Guided Implementation icon Guided Implementation

This guided implementation is a ten call advisory process.

    Guided Implementation #1 - Launch

  • Call #1: Make the case for IT chargeback

  • Call #2: Assess maturity and need

  • Call #3: Establish IT chargeback governance

  • Guided Implementation #2 - Define

  • Call #1: Set up the chargeback program

  • Call #2: Determine chargeable service units, cost estimates, and pricing

  • Call #3: Compute chargeback amounts

  • Guided Implementation #3 - Implement

  • Call #1: Communicate IT chargeback

  • Call #2: Recover costs for IT services

  • Guided Implementation #4 - Revise

  • Call #1: Revise the chargeback model

  • Call #2: Communicate chargeback model changes and implications

Onsite Workshop

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

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Onsite 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 onsite delivery of our Project Workshops. We take you through every phase of your project and ensure that you have a road map in place to complete your project successfully.

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