Charging recovers in a fair way the cost of the IT services and influences customer behavior where necessary.

The main goal of this activity is to charge customers in order to recover the cost of the IT services or perhaps to generate a profit from the services offered. The chargeback strategy is dependent on the business and IT models. The strategic goals can vary between refinancing IT investments, using chargeback to optimize the IT cost and value relationshifrom a business point of view, and in generating profit from IT. In comparison to Perform IT Accounting where the cost structures were the primary focus, and to the process Service Pricing and Contract Administration where defining the price for the services is the primary focus, this activity focuses on billing the customers of IT services delivered and receiving payment.

Administer Charging is split into an initial activity to set up the chargeback framework and a recurring activity to actually bill the clients and receive the money.

Initially, a chargeback framework has to be defined. For example:

• Information model:
  • The pricing strategy is an input from Service Pricing and Contract Administration
  • The pricing model is an input from Service Pricing and Contract Administration
  • User to IT client linkage (to align the bill for an individual user to the organization unit that has to pay the bill)
• Process:
  • Definition of the charging and compensation process. Legal requirements to the process and the bill and the way the bill is composed will differ due to organization form of the IT shop and the company. For example, IT as internal department, IT as an own organization, or IT services different legal organizations in different countries.
• Tool:
  • A chargeback tool gathers the usage data aligned to a user, links it to the prices for the services, and calculates the bill for a user

After the framework is established, bills for the user have to be generated periodically. These bills are based on the pricing model. The pricing model describes what data to measure to compile the usage information of a service.

The first steis to gather the performance data that is linked to the customer. This is an input from the Perform Accounting operating processes. Using the pricing model, a price for the complete IT usage of a specific client is calculated.

This data has to be aggregated to the level of detail that is delivered to the costumer organization, such as per cost unit or per department. Prior to delivery, the bill has to be checked for correctness.

After the bill has been delivered and depending on the chargeback and compensation process, correct payment has to be checked.

If the bill differs from the customer's expectation, an exception process is needed:

• To check the correctness of the bill
• To correct the bill, if necessary
• If correct and exceeding the expectation, to trigger exploration of the impact on the planned IT budget