How To: Accounting for IT Chargeback

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IT chargeback is a system in which departments pay IT for services, changing IT to a profit-oriented business unit. This incentivizes IT to minimize its costs while maximizing service revenue; it also incentivizes other units to better manage their IT costs. When done properly, chargeback has been show to dramatically improve enterprise IT efficiency. However, IT chargeback will only be effective if the accounting system closely follows the costs to IT. Otherwise, the mis-incentivized IT team will make poor business decisions.

In this post, I’ll discuss how StacksWare can provide the consumption intelligence necessary to align IT’s revenue and cost models, thereby making chargeback successful.

Measuring Application Usage

Application licensing accounts for upwards of 25% of many IT budgets; thus, it’s important for IT to charge for utilized software and eliminate unutilized software. For consumer applications, IT may charge based off of hourly usage. Otherwise, IT might add a surcharge to each machine provisioned with a given application.
Question #1: how much time did users from each department spend in an application?
Answer: Import departments as StacksWare groups via our Active Directory integration. For each group, run a StacksWare report showing how much cumulative usage time the users spent in the application.

Question #2: how many machines from each department have an application?
Answer: For each machine group, run a StacksWare machines report filtered on that group and having the application installed.

Measuring Machine Usage

Like Amazon Web Services or other cloud services, IT can incorporate the number of provisioned machines of certain size configurations into its billing.
Question: how many machines is each business unit consuming?
Answer: Again taking advantage of our AD integration, run a StacksWare report showing which machines each department has used during the billing cycle.

How to Learn More

Interested in learning more? Contacts us at contact@stacksware.com for more information or request a demo.