The subject of shared services led to a lively debate about the need for IT chargeback — and, to put it bluntly, the strain and pain it puts on IT and business departments.
To back up a bit: This week and next we’ll be publishing stories on SearchCIO.com that define a shared services model from the IT executive’s point of view. Be forewarned: There are many CIO points of view on this topic. Here’s one definition of shared services: a multi-tenant environment in which IT resources and skills are pooled internally. As one IT executive put it, a shared services model is more about “the service and not the server.” Gone are the days when hardware and applications were dedicated to a given business unit. Instead, they now are pooled to be used as needed for projects and changing business needs.
As resources are pooled, however, whether in a multi-tenant environment or in a traditional centralized-IT model, IT executives are rethinking how they charge for IT services that are shared instead of dedicated. Is IT chargeback based on use really necessary? If it is, how should IT go about it?
The customers of one consultant with a systems integrator are having a pretty hard time trying to answer audit questions when they’re asked what exactly they bought for a particular project, he said. In a shared services environment, where a project investment is tied to usage as opposed to the purchase of a server, the answer isn’t simple. And, he added, the organization might not even have the metering or reporting tools to break out who is using which resources and what to charge them.
David Johns, CIO at Owens Corning, said he doesn’t bother with IT chargeback at all under his shared services model, because it takes IT’s focus off the business and ultimately the end customer, and is a burden on business units. “What value is there to the end customer if you spend an enormous amount of time going through a massive exercise focused on service charges to a business [unit]?” he asked.
In our upcoming stories, we’ll be exploring the issue of IT chargeback, the benefits of the shared services model and whether self-service provisioning portals are a given for shared services success.
Some say self-service absolutely is the ultimate end game of any well-run IT services organization. But where does that leave IT?