IT Chargeback – Keeping it simple

Andrew Mulheirn – Imtech ICT

Driving efficiency and maximising the use of available resources is a savvy response to today’s cost-conscious IT environments.

The prevalence of virtualisation technologies is testament to this.  Many companies are starting to implement an element of “chargeback” to business divisions for the IT resources they consume. Why?

Well, for many reasons this makes commercial sense. The intentions could include:

–  Making the company’s IT department less of a cost centre in itself and more of a “service”

–  Shift the responsibility for budget justification to separate company divisions and spread the IT cost accordingly

–  Make other departments more prudent and aware of  their consumption of IT resources

The big challenge is how it should be calculated and how to retro-fit a chargeback model to a sprawling physical or virtual server estate.  Calculation is complex because different types of server apply different loads to resources – more CPU cycles, more storage or more network traffic.  How best to normalise these values into a meaningful “cost in pounds and pence” is a tricky question.

Microsoft, VMware and various third-party software vendors, (for example Cloudcruiser, Solarwinds and Embotics), believe to have solutions for this. They can enable an IT organisation to provide rapid and competitive responses to requests for service, which as a side-effect, may help reduce the ad-hoc use of public cloud services .  Megahertz, megabytes and gigabits can be turned into actual bills – with this all being presented in a transparent fashion on a portal to the service user. This in turn, helps curb virtual server sprawl.

Even using clever tools, implementing IT chargeback based on resources used is not an inconsiderable task .

Consideration should still be given to simpler models:

–  Charges based on a percentage of Virtual Machines used by each department

–  Flat or “two-rate” charging for ‘basic’ or ‘advanced’ servers

–  Not charging at all

‘Keep it simple’ is a sensible policy in a tough economic climate. Therefore careful evaluation of the various IT chargeback tools is essential – how big a hill must be climbed to get those glossy reports and invoices….?

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