Having gone through the 'Bill of IT' training New Courses! Bill of IT – Showback & Chargeback Series  I found myself thinking Showback or Chargeback, which should we have? and realised that a lot depends on where you sit.

I sit on the bridge between IT and the Business which is why I found myself asking the question. However having now gone back and revisited some of the training modules I now better understand that in my role I needed to understand both…

I think, therefore, that it then comes down to a business decision, possibly based on the maturity of the IT to Business relationship, as to which is needed or should be provided. (Perhaps this is a too simple approach?)

Your thoughts?

I've experienced both sides and I have found that you need to start with showback so the shock of the business partners is limited.  In a mature TBM model, I believe that chargeback has an important place in allowing the business to control their IT spend and have the levers to impact expenses.  At my last company we had a chargeback model that worked well but due to budget variances (caused by usage for the most part) we changed to a showback model.  We would bill budget based on prior year actuals but we published a showback view monthly.  The problem that occurred almost immediately was the business realized they couldn't impact expense or their allocation and they delayed actions until the next budget cycle.  I believe showback is a great way to start and if it works keep it but if you don't get the desired results, chargeback is the hammer that helps drive action.

I think you are absolutely right. For several years we have billed the business based on IT budget, they were familiar with the figures and, although grumbling at the cost, paid when due.  We have now moved to billing based on actuals, this now has triggered a wave of challenges as they are seeing the fluctuations from budget. The plus side is that they can see how their actions are affecting costs, but the down side is that they don’t like what they see…. Interesting times ahead.. At least with Apptio we have the transparency and traceability to answer their questions. A BIG plus..

While I agree with most coments and approach, I do not agree charge back equals more mature environment. In a true matured enterprise, in my opinion, show back should be enough to support the right decisions. Charge back is bureocratic, confusing, can lead to incorrect behaviours. 

True business partners should be able to collaborate knowing the cost of services, without the added mess of monies changing ledger books.

Call me naive!

I totally agree. If only we lived in a world where that was true. A true partnership with the Business is still a goal I’ve yet to achieve.