CIOs - it's time to bill the business for using IT

Don't fear chargeback models: They're about more than just rationing resources

Most organisations are unable to match IT use with business value or even say accurately who's using what resources. That situation is about to change as we enter an era where chargeback models will become prevalent, says Tony Lock.

In the present climate, the pressure is on IT to demonstrate it is delivering value to the business. That sounds simple but it's usually extremely complex. With few exceptions, most organisations do not have established models indicating exactly how the use of IT systems correlates with business value.

In truth not many organisations possess even a high-level view of how IT resources are consumed by different business services. The increasing use of virtualisation tools, if left unchecked, is going to make this matter even more difficult.

In many scenarios this task would be simplified if some form of internal chargeback modelling based on IT resource consumption were to be used to help set and monitor IT budgets.

While the basic concepts of chargeback reporting have been around for a long time, there is strong evidence that it is not viewed as important internally. This perception clearly poses a challenge as IT may have to push the chargeback concept strongly to convince other managers of its value and importance.

Chargeback tools as a reporting mechanism
Perhaps one example of how views could be changed is using chargeback tools as a reporting mechanism for current efforts to align IT resource usage with front-line business requirements. Such a move away from simply utilising chargeback as a throttle on IT consumption could garner a positive reaction from front-line business managers.

Difficult trading conditions obviously pose challenges to IT departments as they seek to deliver a good service while maintaining a strong grip on costs. One thing that has become clear over the course of the past five years is that IT departments are now expected to show exactly where money is being spent and to provide unprecedented degrees of transparency on such expenditure.

Alongside this requirement, increased levels of sophistication are expected. IT needs to be ready to support new business operations that may emerge or evolve dramatically overnight.

There now often seems to be an expectation, however unreasonable, that IT must be quickly ready to support any business change, frequently without having much latitude to assess or manage the potential impact these changes might have on the underlying infrastructure.

Helping IT show where money is being spent
Just how can IT demonstrate to the business where the money is going and how effectively the IT infrastructure is being utilised to support key business services? Consideration of this subject naturally leads to the obvious requirement to be able, at the very least, to report on which IT resources are consumed by which applications during certain periods of time.

Even in relatively traditional IT systems where virtualisation plays little or no part, getting hold of this information usually requires considerable manual time and effort.

The ever-expanding use of virtual systems makes such reporting even more necessary, particularly if organisations eventually want to be able to share...