Chargeback exposes IT shops as slow

Chargeback enables metering of IT resources, even making possible itemised bills of how much individual teams use virtual servers and other IT resources. With that knowledge in hand, chargeback theory suggests, IT departments can send the CFO and internal users bills that demonstrate the real cost of IT and ask for cash an internal cash transfer. At the very least, IT departments can wave the accounts around to show business units that their operations have a real cost that cannot be taken for granted.

The move is sufficiently awkward that Gartner

The move is sufficiently awkward that Gartner, in a 2010 CFO Advisory: IT Chargeback Overview declared chargeback "a political minefield and administrative hassle" that was "more about politics and finance than it is about information innovation."

"When a business unit consumes a resource it is only right and roper that they should pay a cost," he says. "That's the theory, nevertheless the reality is more complicated because once you charge back you expose price for the service."

A political minefield

Chargeback is a "a political minefield and administrative hassle" in other words "more about politics and finance than it is about information innovation."

"IT is a high cost operation and there will pursuant to this agreement-recoveries as business units slash consumption," Rowsell-Jones says. "That's a terribly interesting position to find yourself in as leader of an IT group. At that point you may wish you had never done chargeback to start with."

The cloud is as well complicating matters

The cloud is as well complicating matters, as cloud providers' very public price lists for computing services can throw internal IT organisations' fees into nasty relief.

VMware has in a nutshell updated its vision for chargeback to include operations management, performance management and capacity management, a combination Gross says includes all components of IT service delivery, from infrastructure to the help desk. "That takes it to the then and there level so the CIO can have a business-level conversation and become a business broker who understands the holistic cost of service delivery."

Big business with lots of exotic needs

"Inside a big business with lots of exotic needs, the IT shop can be cheaper per transaction than outside suppliers. In other words than denying it, embrace it and use it as motivator to provide more cost effective ways of providing services."

The Register's Lucy Sheriff is joined by Julian Elve, of The Schools Network, to talk about his recent Office 365 migration.

The modern business is highly dependent on IT

The modern business is highly dependent on IT. When systems go down, the disruption can be widely felt, and even lead to tangible damage to the business or its brand.