Diagnosing Viability of Chargeback Models for Portals and SharePoint

April 24, 2009 at 9:56 am | Posted in business case, Intranet, Microsoft SharePoint, portals | 2 Comments

I just had a good conversation with a client about whether setting up a chargeback model for SharePoint would be a good idea for them and how to design it.  This is a common question that I blogged on over at the Collaboration and Content Strategies blog (see Do Chargebacks Work for SharePoint, Portals, and Collaboration?), but thought it could be useful to provide the set of questions I use to diagnose a portal chargeback situation and determine if it is the right path to take and how to design the model.  It’s probably useful to read that previous blog posting first to see where I’m coming from.

1. What’s the governance structure (e.g., federated I assume)? How many other sites using it?

  • Rationale: Validating that the organization fits the standard situation where there is a federated model where I’m talking to the central IT provider and there are many potential adopters of the enterprise portal. 

2. Rollout maturity: Where are they on the curve of network effect? How many other sites could potentially use it?

  • Rationale: Collaboration technology thrives on network (aka snowball) effect where the more people use it, the more valuable it is.  You don’t want to disincent usage. But once the portal is rolling and users are addicted, it may be possible to shift chargeback models from a tax to a utilization model to prevent abuse and provide a more fair sharing of the cost burden based on usage.

3. Pricing: Cheap? Subsidized?

  • Rationale: It can help adoption of the chargeback if not all cost recovery is addressed by the fees. For example, maybe 50% of the infrastructure is centrally funded and the other 50% is recovered through chargebacks.  This is not essential though.  100% recovery through chargebacks can help provide the business a clearer view of costs and value.

4. Competition/lockin: how easy for units to say you’re too expensive and use something else? policy or regulatory barriers?

  • Rationale: A common problem with chargebacks is that potential buyers start haggling with you or just go to a SaaS provider who is a few bucks cheaper. Then all information sharing and network effects go out the window. This works best when there are barriers to users going outside the centrally provided service.

5. Chargeback maturity: do other technologies use chargeback too? Is there a “tax” model that has been used”?

  • Rationale: If business units aren’t used to being told they have to pay a chargeback they may balk at the idea, even if it is a good one.  In an extreme case there may not even be an accounting/financial process where chargebacks can be implemented.  Same goes for “tax” -if you’re just one of many the business will understand your proposition much better.

That’s it.  From these 5 questions I can now tell a client whether they share characteristics of other organizations I’ve spoken with that have been successful or unsuccessful with chargebacks.  I can also determine whether it is better for them to do a usage or tax-based assessment.  And provide a few areas to beware of (and hence prepare for) as well.

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