Most IT directors use charge back

Charging back IT costs to business units has become the most common way to run an IT department, according to a survey of 100 UK...

Charging back IT costs to business units has become the most common way to run an IT department, according to a survey of 100 UK IT directors.

The study, by IT services firm Compuware, found that 52% of IT departments charge back costs to individual business departments. Twenty-four per cent of the companies surveyed said they planned to move to a charge back system in the next two years.

"Charge back makes end-users think about IT and how they use it," said Compuware regional technology manager Mike Lucas. "Many people would probably be surprised at the number of business applications they have on their PC that they do not actually need.

Implementing a charge back system helps the business to identify wastage and presents IT managers with the opportunity to dispel the notion that IT is an unaccountable cost centre."

However, David Metcalfe, vice-president at analyst firm Forrester, warned that there are limits to how effective the charge back system can be.

IT services can be charged to divisions within global businesses. It is also relatively easy to charge for IT infrastructure and services such as PC support. But when it comes to charging for business applications that cut across a business, such as CRM, the chargeback model can become impractical, he said.

"You can find out how much the project costs, but who gets the benefit?" Metcalfe said. "Is it sales? Marketing? Operations? As soon as we get into those debates the whole idea falls down.

"It is difficult enough working out the benefits of CRM to the business as a whole, let alone to each individual business unit."

Similar arguments apply to portals, business process management and supply chain management, said Metcalfe.

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