Speech Abstract

CIOs increasingly are taking the position that chargebacks are an administrative nightmare, a risk, and of little value. In many cases, they're right. Chargebacks require a big investment to set up, are expensive to deliver, risk sudden decentralization and downsizings, and in many cases fail to deliver the intended benefits.

But real problems remain — mistrust due to lack of cost transparency, the impossible "do more with less" demand, client expectations far in excess of available resources, a lack of understanding of value delivered, accusations that you cost too much or that allocations are too big, and the need for strategic alignment — challenges which chargebacks are supposed to address.

In fact, you don't need to charge back to solve these problems. Market-based governance can work even when the organization receives a direct budget or high-level allocations.

This session untangles the terminology and concepts, and explains how to get most of the benefits without actually shifting your budget to clients and then charging them for services.

It shows how to deliver cost transparency, and how to make clients responsible for deciding what they buy from a shared-services organization within the limits of available resources. It explains the role of service catalogs and product/service costing, the concept of investment-based budgeting, how to make executive steering committees useful — all within the broader context of market economics.

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Outline

• Defining chargebacks and allocations

• Why chargebacks can be useless, or worse, a bureaucratic nightmare with lots of risks

• What problems chargebacks are supposed to solve

• The concept of market economics within an enterprise

• The mechanics: how to make the market effect work without chargebacks

• Practical next steps: how to get started on the path to a market-based internal economy

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