Putting a price on IT and charging back costs could help managers understand the true business value of IT – and not a moment too soon.

Since the beginning of the year, The Corporate IT Forum has seen a surge in interest from IT service directors wanting to find out how charging back the cost of IT can benefit their businesses.

The IT professionals taking part in our user-only workshops and events are keen to work out how other large businesses are assessing charge-back models. They are also eager to discover what solutions other firms are considering.

Charging back is based around the principle: the user pays. At its most basic level, IT departments put a cost on each area of their IT service provision and create a costed menu of services and products for the business.

But charging back is about more than just providing a price tag. An important part of the model involves supplying a business manager with costs, together with information about how well an IT service is used.

And what is the driver behind the surge in interest? While our enterprise-level subscribers tell us that managing costs is the ultimate motivation – after all, users are always looking to see how they can reduce costs and increase value – a significant driver is also to influence the IT buying behaviour of business managers.

By putting a price on the services and technology provided by IT, service directors are trying to highlight to business managers which technologies are valuable and make the board aware of the consequences of their own IT consumption in a simple, transparent way.

Service directors are not trying to make a fast buck from their colleagues, they are trying to curb wasteful IT consumption by providing the information that people need to make crucial business decisions.

Corporate IT is hoping the pricing model can be used to challenge the taken-for-granted technology purchasing decisions that are often made. Charging back makes business managers understand the value of each area of their IT estate and question whether their IT budget is being spent in the best way.

For example, apportioning the costs of an IT helpdesk back to business users exposes divisions that – for good reasons or not – are making the most use of the service.

Making the costs visible encourages a business manager to examine their costs and if costs are high, investigate why. If the manager believes too much helpdesk budget is being spent on answering low-level or repeat queries, they could perhaps think of diverting budget into staff training to lower the amount of calls made.

Charging back here allows managers to change their behaviours and make better use of IT. Subsequently, this helps people to understand the valuable role that technology can play in the business.

In whatever retail market you choose to consider, people buy things because they believe what they purchase has a value – otherwise they would not want it. Charging back removes the business overhead label from IT, replacing it with one saying business value.

However, there is one note of caution from our larger corporate subscribers. While charging back can be of significant benefit, cost information provided by IT must be presented in such a way that the business will understand it.

And making pricing information overly technical or too detailed will only serve to turn off the very people who need to be engaged. Our subscribers encourage anyone considering charging back to only give users information that they need and that will be relevant to them.

According to subscribers, an overly detailed cost justification can lead to users comparing the cost of enterprise IT equipment with products they may have seen for sale on the high street.

IT needs to make sure it is offering value for money and that it is controlling costs, and business managers need to understand if they are consuming the technology resources that add value to the bottom line.

Charge-back models can give users the knowledge and the power to make better business decisions.

It helps challenge prevailing IT thinking and encourages managers to consider innovative technology, reaching mature and informed decisions.

David Roberts is chief executive of user group The Corporate IT Forum (Tif.)