Common Factors to Chargeback Success
Completed chargeback implementations have revealed several common factors that help ensure chargeback success.

First, chargeback should have strong executive support. Sponsorship from the CIO minimizes user resistance.

Second, individuals with financial skills and expertise should be involved in the implementation of chargeback. By communicating with business units in financial terms as opposed to discussing technology options, IT is more effective in helping users understand the financial implications of their actions and therefore the rationale behind chargeback. Being able to draw on knowledgeable and experienced financial resources greatly facilitates this understanding.

Third, the chargeback financial model created to capture costs is more likely to produce consistently accurate figures that represent actual costs when the interrelationships between chargeback and other financial processes are reflected in the system. In addition, the allocation model will more directly link user actions to costs, helping users understand how they can control their costs.

Conclusion
Why consider chargeback for storage now? With no end in sight to the amount of data being captured, stored and backed up, chargeback is an effective way to influence users’ decisions in a way that better supports prudent use of IT resources.

If done right, the benefits resulting from chargeback can be substantial. Users at the financial services company quickly realized that unused storage resources could be returned to the overall pool, which saved significant storage acquisition costs.

Another organization was able to reduce the number of production database clones used to support activities like test, development and reporting from 14 down to six. Chargeback motivated users to reduce their storage consumption and to see that they could limit their own storage costs by sharing clones with other departments.

Whether it is purely in a cost-recovery mode or in a revenue-generating capacity, many organizations have developed accurate and reliable chargeback systems utilizing existing storage management software investments. These companies are using chargeback for competitive advantage as business units utilize the technology infrastructure more efficiently and the IT organization becomes more responsive to changing demands. This ultimately improves the flexibility of the organization, enabling it to adapt more easily to new market conditions.

Paul Goetz is vice president of EMC Consulting at EMC Corporation (www.emc.com).

For more articles on chargeback, see:
Beneath the Buzz: Chargebacks
Chargeback for Good or Evil
Sound Off: Is IT Chargeback More Trouble Than It’s Worth?