You'd like to reduce spending on marginal keep-the-lights-on services, to free up funding for strategic projects.

Challenge

The enterprise can only afford to spend a finite amount on your function, and too much of that is going into operational "keep-the-lights-on" services of marginal value. If you could reduces spending on some of those services, you could shift it into high-payoff strategic projects, and improve the value and relevance of your function.

Why is so much of your resources going into low-payoff services? Often, this is because clients have no incentive to do without services that are of some small value to them, even if the benefits don't justify the costs.

Typically, this is because clients don't pay the costs, or face the tough trade-offs inherant in working within finite resources (i.e., your finite budget).

How can you ensure, on an ongoing basis, incent clients to do without marginal operational services?

Solution

Think of your budget not as yours to pay your costs (the traditional view), but rather as money put on deposit with you to buy your products and services (the business-within-a-business view).

From that perspective, your budget (and your resources) are a finite checkbook that your clients must spend wisely. The challenge is to put clients in the position of purser of that checkbook.

That is, a governance process must do more than empower clients to approve major projects. Clients must decide what checks to write from that finite checkbook -- a resource pool which must cover all your services as well as new projects.

In this way, they'll have an incentive to do without marginal services to free up resources for more strategic investments (with or without chargebacks).

Comprehensive solution....

Other Resources

Case Study: From Adversaries to Advocates
how budgeting and product/service costing improved relationships between IT and its clients

Case Study: Re-inventing the Budget Process
the cost of success: interviews with CIOs on the benefits of budgeting for products/services

Column: Portfolio Management....

Column: Governance....

Anecdote: Start the Year Out Wrong
why budgeting is a form of portfolio management

Anecdote: Attempting Portfolio Management
why a shift in the budget process is prerequisite to dynamic portfolio management

Anecdote: Client-driven Portfolio Management (Out On a Limb Alone)
you're expected to defend the budget that's really there to benefit your clients, and blamed when you don't get enough

Book on resource governance processes....

Speech abstract: The Big Picture
how all the pieces of financial management processes fit together