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Showback reduces costs and exposes resource hogs on your IT platform

IT showback reduces costs better than a chargeback system by allowing companies to compare and optimize resource usage across their business units.

IT is garnering the attention of business bean counters who wonder why it's so expensive. Before you start charging the accountants for their financial management software licenses and the servers it runs on, consider a showback approach.

For IT, the knee-jerk reaction to budget scrutiny is often a chargeback system -- measuring what different divisions, departments or groups are using and then cross-charging them for this use to fund the IT platform and its management and operation. Chargeback, however, does nothing to address the actual problem of whether the IT platform is good value for its cost. Chargeback is a great way of wasting money. Showback, on the other hand, helps improve IT infrastructure utilization and efficiency.

Urge the organization to see IT as a centralized service in place to support the business. IT is like a utility -- few organizations split up water, electricity, gas or telephone usage by group. Neither should IT be seen as separate groups. It has to be centrally funded, but IT has to be able to show that that funding is providing a cost- and business-optimized platform.

IT under a chargeback system

Major aspects of cost are not considered in chargeback schemes, according to survey-based research conducted by Quocirca. Few IT managers ever see the electricity bill for the data center. Companies regard cooling, lighting, auxiliary generation and fuel, cleaning and other peripheral services as a cost to facilities, not to IT. Fewer IT organizations still have any idea of how much the data center facility cost in terms of building upkeep and maintenance or in rent or taxes.

For example, an IT department starts with 1,000 units of money for a chargeback implementation. It has to measure the cost of the platform -- for which it needs a set of tools that run on a specific set of resources and staff to monitor and analyze the data. This reduces the IT department's funds to 950 units of money. Once they analyze the data, IT must send chargeback reports to each business group -- which all promptly disagree with what IT says is theirs to pay. They argue back -- taking up more time and cost.

Now they're down to 900 units of money. Eventually, the groups unwillingly reach a negotiated middle ground. IT has been paid for by moving figures around on several pieces of paper, an end result that negatively impacts the bottom line of the business. And the IT platform is still no better than it was before.

By focusing on just the IT equipment and staff costs, IT underfunds itself while also wasting money.

A better way: showback

Showback is much better than chargeback. Here, IT works with the business units to identify what resources they use and identify estimated costs.

It still requires some tooling and resources to implement, but since you aren't looking to get detailed costs fully laid out, these tools can be a bit more ad hoc -- and cheaper.

With a showback system, the centralized IT organization compares and contrasts different groups within the business and looks for units operating well outside the norm in their resource usage -- and finds out why. Maybe there is a real need for department A to use 6 petabytes of storage, while every other department is happy with less than 1 terabyte. Maybe department B needs to use 40% of its CPU from 1 a.m. to 8 a.m. every weekday, when other units are idle.

The IT department's ability to monitor and identify such usage gives it insights to determine whether the way a department consumes resources is optimal, or whether a better way of doing the tasks that uses fewer resources exists, reducing the overall cost to the organization.

IT showback does not penalize end users by making them pay directly for the data center. After all, if that department is being run by a fiscally minded person, their first reaction should be to just use fewer of the available IT resources, which could hamper the business's ability to be successful.

It shows how some units achieve a state of better practice with IT resources, so others can follow the example to optimize the organization's overall usage of the IT platform.

Implementing DCIM in a showback scheme

Organizations need to use data center infrastructure management (DCIM) tools, in conjunction with good physical and virtual systems management tools. DCIM tools from the likes of Nlyte, CA Technologies, Raritan Inc., and Emerson Network Power provide not only the means to gain all the required information across the total data center facility for showback, but also enable IT teams and facilities to better manage the overall platform and optimize it to support the business.

Showback from DCIM should be seen as a useful side feature, rather than the main reason to go for DCIM.

Once it's in place, the DCIM tool can help further. It might identify better placement and handling for workloads, freeing up hardware to reuse or decommissioning. This optimization saves the data center power and space, and the IT organization maintenance, licensing and sys admin costs.

Consider testing potential scenarios -- what would happen if these similar workloads were consolidated on these virtual resources? Where would it be best to provision these cyclical or new workloads at any one time?

Next Steps

Your private cloud requires showback

Make sense of DCIM offerings

Are you overpaying for DCIM?

This was last published in December 2015

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