Shared Hosting

Build Your Shared Services

If a time machine that takes you back a year is invented, the most profitable use is probably gambling – Leicester City at 5000-1, some powerball tickets, etc.

But selling it to CIOs planning shared services IT budgets could be a close second.

Each year, technology leaders try to scry the viability of their roadmap, reliability of suppliers, and the variations in internal demand.

And combine it all into a shared service catalog that doesn’t overrun the budget by millions or send their internal divisions scrambling for shadow IT solutions outside of the CIO’s purview.

Most fail unless they have the right crystal ball – and that’s where we come in.

Even Having Shared Services is an Achievement

It takes a high organizational maturity level to even contemplate true shared services — which balances the economies of scales of centralized IT with the responsiveness and customization of decentralized purchasing.

Most companies only go a few rungs on the ladder of allocating costs to internal divisions:

1. Decentralized buying – IT is operated by each division separately, with inconsistent coordination and limited scale

2. Centralization without allocation – IT is funded out of a general budget, with little responsiveness to end-users

3. Political allocation – costs for IT are split based on backroom negotiations, with no incentive for frugality

4. Business metric allocation – costs for IT are split based on revenue or headcount, likewise encouraging overspending

5. Showback – one of the above, plus users are shown how their usage contributed to the cost, counting on organizational processes to control cost

6. Chargeback – users are charged proportionally to the services they actually used, but can be faced with surprise overruns

7. Full shared services – chargeback plus a service catalog that provides cost certainty for the future. At this level, the internal IT organization acts much as an outsourced provider would – with a price list, SLAs, and internal controls.