The other day a debate heated up in the office (again) about the internal re-charge model we have to live under. I’ve written previously here about the issues, but the main consequence of recharging is to set-up barriers between the IT operation and the business users and this almost always has a negative effect.  It leads to an inability to properly engage and support the business users.   There is a wider issue in organisations about re-charge models, since they aren’t always applied just to IT:  I think I’m right in saying that booking a meeting room in our organisation costs £400.  I think you would probably join with me in believing that a reasonably intelligent primary school child would view this as nonsensical.

The only possible advantage I can see in re-charging is that enables money to come in to a department throughout the year.  It also, to some extent, prevents the department from being viewed as an ‘overhead’ and therefore something to cut at the earliest opportunity.  If you abolish re-charging there is also the danger of endless board-level argument along the lines of ‘why should my department contribute to the IT budget when I don’t get much out of it etc’.   (To which I reply: well you’re part of the organisation and as such we’re all in it together).

So there are dangers in abolishing re-charging. If you are looking to Beyond Budgeting to save the day, forget it: it promotes the idea of internal markets, recharging, trading companies and the like, and seems to perpetuate the myth that all these things lead to efficiencies and and a better organisation.  I have seen the heart torn out of organisations that have implemented these sorts of things, so no:  Beyond Budgeting isn’t the way forward.  What we need is a return to a simple structure where you decide what you are going to do and you simply employ people to do it.  Simple.  No barriers.  No labyrinthe accountancy. No complexity.

I am against re-charging, but it is important to have arguments in place to counter those that will start viewing IT as an overhead: This is easy to do by the way.

« »