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Many enterprises are implementing a centralized utility-oriented data center, based on consolidation and virtualization. While this model facilitates a more agile and cost-effective technology delivery model, it will also create cultural and procedural challenges if it involves extending IT's mandate into areas currently controlled by business units.

In order to effectively manage this environment, IT leaders should use Service Level Agreements (SLAs) and chargeback models that reinforce the concept of IT as a service. This research note looks at:

  • The cultural, procedural, and financial challenges of consolidating and virtualizing departmental assets into a centralized data center.
  • The value of SLAs and chargebacks in a consolidated, virtualized environment.
  • Positioning service catalogs, SLAs, and chargebacks within the context of managing IT service delivery.
  • The impact of SLAs and chargebacks in managing cultural change and improving IT/business alignment.
  • Ideas for improving the transparency of IT chargebacks.

Consolidating and virtualizing servers that were previously distributed means weaning internal customers off the idea of owning server boxes. Chargebacks and SLAs provide a solid framework for communicating and negotiating with business leaders and managing expectations in a centralized data center model.

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Search Code: 9359
Published: February 9, 2007
Last Revised: February 9, 2007

1 Comment

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    Robert Maki | 07-20-2012

    Minnesota Department of Natural Resources has been operating under an SLA-driven governance framework for 5 years, including customer-specific cost allocations based on proxy indicators of service volume delivered. While I appreciate the tie-in of these concepts to the emergence of virtual server environments, they are equally applicable to more traditional infrastructures.


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