Bob Lewis
Columnist

Chargebacks and the KJR Manifesto

analysis
Apr 17, 20062 mins

Dear Bob ...Great job on the KJR Manifesto. It's a great list!Rules 11 and 12 brought to mind a quandary for me.[In case you missed them:11. IT is an integral part of the business. Run IT in a business-like way, not as a separate business. Running IT as a separate business violates Guideline #1.12. Every part of the company, including IT, has the same customers. These are the people who make buying decisions abo

Dear Bob …

Great job on the KJR Manifesto. It’s a great list!

Rules 11 and 12 brought to mind a quandary for me.

[In case you missed them: 11. IT is an integral part of the business. Run IT in a business-like way, not as a separate business. Running IT as a separate business violates Guideline #1. 12. Every part of the company, including IT, has the same customers. These are the people who make buying decisions about the company’s products and services. When IT (or anyone else) has internal customers, very few employees have a stake in making sure the people who decide to buy from the company have any reason to do so. – Bob] What are your thoughts regarding IT departments/organizations that “charge back” their services to other departments on a project by project basis?  Does that intrinsically break rule 11?  I struggle with this conceptually myself, and am curious your thoughts. – No-account CIO Dear No-account … As you surmise, my opinion is that chargebacks violate guidelines 11 and 12. They also create full employment for accountants, result in a more arms-length relationship between IT and its business partners (guidelines 3 and 4), and lead to endless arguments over which pockets money should be taken from and put back into. There’s an easier solution that usually works just as well, and perhaps better. It’s a simple governance formula: The business sponsor signs up for the claimed benefits of a project; IT signs up for the costs (or at least the IT-related costs). If the business sponsor agrees to take responsibility for achieving the promised outcome, the proposal goes into the governance hopper (few companies can take on every proposal that’s worth doing). Otherwise it’s tossed into the virtual shredder. – Bob