One of the oldest conundrums of the IT world has been how to create an effective chargeback system to properly allocate technology costs across the organization. I think the cloud can provide the mechanisms to address this challenge, but these new tools may not enable IT organizations to overcome the non-technical issues that have stood in the way of implementing chargeback programs in the past.
In the old days, the task of allocating IT costs fairly was especially challenging, because many organizations relied on highly centralized datacenter resources, and most lacked the tools to accurately assess how computing resources were used by particular departments and end users.
In those cases where they possessed the tools, enterprises may not have been capable of extracting the data they needed to apportion the technology costs to the appropriate departments. Configuring legacy systems and software to properly monitor, meter, and measure usage may have sounded simple, but it wasn't. It required specialized skills.
Those few companies with the technological and technical skills to implement chargeback faced one final hurdle: the political pushback of the strategic business units and other corporate departments. With many of these user groups less than satisfied with the quality of service they received from their IT organizations, many were more than willing to fight off IT’s attempts to allocate costs to them.
As a result, many corporations used algorithms to calculate computing costs across their enterprises. Some used simple math to divide the costs based on headcount or some other impartial statistic. Others levied a usage “tax” based on the number of transactions a department initiated.
Ironically, it is an amorphous, on-demand service that many IT departments have resisted that is putting unprecedented power in their hands for the first time. Unlike the legacy systems and software of the past, which forced IT departments to create their own methods for allocating costs across an organizations, today’s cloud services often come with metering and measurement mechanisms built in. The usage tracking features of these services are making them attractive to IT departments and corporate executives as well.
But in many cases, organizations are still hesitant to employ the cost tracking capabilities of cloud services to initiate chargeback programs. The reason? IT departments are still trying to overcome their tarnished images of the past and waiting until they can demonstrate better performance levels before they try to impose new IT charges on their corporate end users.
For the time being, IT is using these tools to evaluate the cost-effectiveness of cloud services at a corporate level and to analyze specific usage patterns to determine how these services can help them save money over the long term.
Enlightened IT departments are recognizing that if they employ the right cloud services with robust usage tracking capabilities, they will ultimately be able to overcome the chargeback pushback challenge.
— Jeff Kaplan is the managing director of THINKstrategies and founder of the Cloud Computing Showplace. He can be reached at firstname.lastname@example.org.