Challenge: Value and Justify IT Expenditures
Aligning IT with business strategy boils down to how business unit managers make decisions about financing resource distribution, cost revitalization and overall IT expenditure. For instance, some companies have explicit spending restrictions while others don’t. How companies distribute IT resources varies widely. And while many companies employ some form of cost allocation, others don’t bother at all.Which is why, implementing IT chargeback can be of great help, especially if you want to promote responsible usage of IT resources among your employees.
Advantages and Disadvantages
of IT Chargeback
IT Chargeback is Responsible Accounting
IT chargeback is used as a form of cost recovery based on the actual resources that the business units use. It can address concerns about fairness and rationality, and at the same time may impact the performance assessments of individual managers. As an effective governance mechanism, chargeback exposes the resource requirements of running individual businesses, drives managers to better decision making, and ultimately improves performance of an organization. A better understanding of the IT cost drivers of each business unit empowers business managers to establish mutual responsibility for IT costs and benefits.
Service Levels and Budget Allocations
To achieve an efficient cost optimization strategy for a large company, managers need accurate usage data to get an overview of how IT assets are being deployed. Facts based on statistics are necessary to plan for future purchases and maintenance costs, and to justify appropriate allocation of costs to different departments. Getting the facts and understanding them is critical for optimal resource planning and efficiency, and ultimately for profitability. A robust IT asset management system is needed by managers seeking to understand the business, implement company technology strategies and best practices, and achieve cost optimization.
Internal IT Chargeback and Business Decisions
Open iT software aids in providing an accurate and fair chargeback model, and in optimizing company IT resource usage. Open iT SystemAnalyzer, StorageAnalyzer, and LicenseAnalyzer provides a centralized overview of distributed IT resources.
IT managers are responsible for costly and complex assets of the company; they need to know how IT resources are utilized. They increasingly need to be able to provide reports to non-technical managers, to continually align IT resources with business activity. It is essential to have an understanding of IT resource usage when allocating scarce IT resources and talking too managers and internal users. Using IT chargeback is the best way to change end user behavior.
Accurate, Flexible IT Chargeback and Budgeting
Faced with escalating IT costs, managers have more accountability in the organization. Divisions, departments, projects or subsidiaries should be charge for their use of shared IT infrastructure and services. A tool that will provide usage data as a basis for internal billing based on actual use is necessary to help IT and the business units communicate and improve cost-awareness.
Cost Sharing Made Easy
Distributing costs and accurately charging each department or business unit for their use of software licenses is easily accomplished with Open iT.
Advanced IT Chargeback
With Open iT, organizations can charge back to internal users, groups, departments and business units for use of software based on actual usage.
All reports can be fitted with real costs for any combination of individual features, applications, or even executable files. Apply cost factors to any usage measurement in order to present real cost figures in the reports.