Relevant Chargeback Article in an Unexpected Journal
Network World published a great article by Denise Dubie on January, 22nd. She has written about chargeback several times in the past few years and we’ll probably reference some more of her work. What makes the article unexpected is that it appeared in a journal on networking, yet none of the customers interviewed directly mentioned network usage and cost visibility. The majority of the concrete examples focused on understanding the usage, costs and cost allocation of virtual resources. While VAlign didn’t receive a mention in the article, one of the comments did list us as an option for financial management of virtual environments.
The most important statement we will make is that we encourage all organizations that have a significant IT budget – enterprises, small businesses, universities, state & federal governments – to take action to understand what you have, who is using it, and how much it costs. While we would love everyone to use our products and services, we are more interested in people realizing the tremendous business value to be gained from taking basic steps to reach IT cost awareness. As Barb Gomolski from Gartner says in the article, taking the first step doesn’t need to be a complex project. Start by gathering all of your costs (All the tools on the market won’t really help you with that step). Then, if you haven’t kept good track, figure out how everything has been provisioned – who asked for what resources and whether they are still using them. This simple exercise may quickly, and fairly painlessly, identify unused resources that can be eliminated.
Along the way, share the information with business users. Yes, we know this may not be normal for IT – exposing where the IT budget is going and how it is being used – but in this economic environment, how can any of us afford not to share information that is critical to the survival and success of our organization? Doesn’t it ultimately affect our own employment? If you look closely at the paragraph above the pie chart in the article, you’ll see that 75% of 100 non-IT folks surveyed wanted more information about how IT dollars were spent. We find that to be an amazing statistic, particularly in light on the comment by Jake Seitz at First American Corp, “if they knew how much it could cost their department, they would be more cautious about requesting less critical services.” What a great concept!
The idea is reinforced by Cameron Haight (who has a terrific blog ) – “providing periodic reports to their end users showing resource consumption and using this as a means to have a discussion to address excesses.” [emphasis added]
A great paragraph near the end of the article speaks to what we have seen – budgets decreasing, demand for virtual servers increasing based on the logic that “It’s virtual so it doesn’t cost anything.” Of course folks in IT know that tens or hundreds of virtual servers can’t be rolled out at no cost to IT. Until IT has a cost profile for what it is provisioning to enable a dialog with users about choices, IT will be stretched thin physically and financially. Accountability could not be more critical today.
Please read the article. Feel free to comment here or at Network World. The more ideas that get shared, the better we will all be at delivering value to the businesses and organizations that will propel us back to a strong economy. If you want to discuss anything with us, call 877-6-VALIGN. We are passionate about this topic and really enjoy talking to people about what they are experiencing.
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