Chargebacks

Dear Bob …

This is another comment on your column about making enforcement the last resort rather than the first. As a security consultant with a background in IT service delivery, I hold strong views on the importance of standards/policies and the need for enforcement.

In a perfect world, I’d prefer to offer a choice – you can pick from the “table d’hote” menu (basic workstation, developers workstation, basic laptop, …) which would offer only minimal capabilities for reconfiguration, or you can go “a la carte” and pay a suitable hourly rate for engineering support to configure your machine You could even choose Apple, but if you’re the only one who wants/needs it, the additional costs are going to be substantial!

Of course, all the above depends on having an effective recharging system in place (drat, more beancounters).

– The Standardizer

Dear Standardizer …

Funny thing about chargebacks. In my experience, hypothetical chargebacks work just as well as real ones. Which is to say, letting someone know what their request will cost the company is just as effective as actually transferring the expense to their cost center.

In most companies. There are some, of course, where it’s everyone for themselves. But then, the need for chargebacks are the least of the company’s problems.

The biggest problem with chargebacks is that they very easily turn into bad metrics on steroids. Which is to say: One of Lewis’s Laws is that if you can’t measure you can’t manage, but if you mis-measure you mis-manage. Chargebacks are nothing more than a system of metrics that’s backed by money. So where metrics have a psychological impact, chargebacks have the same psychological impact compounded by a budget hit.

Unless chargebacks are calculated with extreme care, they’ll drive very dysfunctional behavior.

Chargebacks can have one advantage for internal service organizations like IT – they makes the whole nasty process of justifying headcount go away. You chargeback, get money in your budget, hire the people you need, and life is good.

Except it isn’t, of course, for two reasons. First, not all companies work that way. I’ve seen companies that have chargebacks, but still have a difficult approval process for any new headcount – the worst of both worlds. And second, as soon as this process starts, the departments being charged start to complain that your costs are too high, and start going to your “competitors” outside the building.

I’ll stop here – this can lead to a very long and completely different discussion of whether that’s a good thing or not and why, and I’ve done enough damage for one day.

– Bob

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