As companies look to find new ways to optimize costs, they often turn to IT chargeback models. While some may think of this approach as simply a way to balance the budget, implementing an IT chargeback model can also put resources to better use and foster an innovative partnership between IT and the business.
What Is an IT Chargeback Model?
IT chargeback models allow IT organizations to charge business units for the IT resources they use, shifting the burden of IT budget justification to the consumers of the resources. IT is viewed less as a cost center supplying support infrastructure, and more of a partner from which business units request resources and gain business value.
Expenditures are driven by business units, who often become more disciplined with IT requests and consider IT costs when evaluating business initiatives. The true value of an IT chargeback system is in decision support, not just cost recovery, and focuses on services, not infrastructure.
However, there are a few challenges to consider:
- Establishing a fair and practical chargeback policy
- Partnering with business units for buy-in
- Collecting usage metrics
- Allocating IT costs efficiently
- Pricing IT services
- Providing detailed billing reports
- Understanding the cost of an IT chargeback system
- Recovering IT expenses based on business services
While that might seem like more work than is worth it to establish your IT chargeback model, with the right tool in place, your company can easily take on these challenges without heavy lifting or overspending.
5 Ways Vityl Capacity Management Helps You Support an IT Chargeback Model
Vityl Capacity Management (VCM), enterprise IT performance optimization software from HelpSystems, collects and manages usage data that is provided as input to chargeback billing systems. Organizations can leverage data they already collect for performance- and capacity-related activities by simply assigning charge codes for each business unit.
1. Support efficient IT chargeback processes
Improve the accuracy and timeliness of the chargeback process with usage reports that are tailored to the needs of various departments and levels of management.
2. Automatically generate and distribute usage reports to users
Collect and centralize chargeback data for easy online access and automatic report distribution to business unit managers.
3. Provide accurate usage metrics to billing applications
Provide summarized or detailed chargeback metrics to billing systems for each business unit on all processes and resources consumed.
4. Select from two billing methods
Provide data to allocate costs by charging for actual resource usage or by charging a flat rate for base usage with additional fees for excess usage.
5. Assign billing codes for cost allocation
Simplify IT cost allocation by assigning billing or charge codes to business processes, applications, zones and guests.
VCM IT Chargeback Model Use Case
DB Systel GmbH, the IT service provider for Deutsche Bahn uses Vityl software to provide usage metrics for their chargeback system. Costs are transparent and automatically distributed across business units in a fair and practical manner. Invoices are tailored to various needs and display usage data on a per day and per month basis, aiding in buy-in and support across the organization.
The accuracy and quality of usage metrics, the low impact on the system, and the flexibility of the tool are prime reasons for the successful implementation of their IT chargeback system, from both political and operational standpoints. DB Systel GmbH today leverages the same Vityl software not only for IT chargeback, but also for performance analysis, Capacity Management, surveillance & systems management, and customer support.