could not be viewed as an internal vendor from which services were purchased.

Making the Change

Having determined that a charge-back system was not presently useful to us, and would not help us in the future, I approached the CFO.

Finance and budgeting were the principal beneficiaries of data from the charge-back system. To their great credit, the CFO and budget officer understood my viewpoint and agreed to the change in business model I proposed. We determined that an existing, indirect cost-allocation system could distribute costs sufficiently across the enterprise for their purposes.

The early 1998 announcement of our decision to discontinue the charge-back system for IT services was met with great enthusiasm by other departments.

The accompanying announcement that all technology funding would be consolidated in the IT Department budget was greeted a bit less enthusiastically, but was accepted nonetheless.

The decision to eliminate the charge-back system was only one of a half dozen decisions that have guided us over the intervening years. Taken as a group, these decisions let us move very rapidly from a position of technical challenge and frustration to one of national prominence in IT use.

Des Moines has never finished lower than third in the Center for Digital Government's Digital Cities Survey (finishing first in 2002 and 2004), our Web site was a Best of the Web finalist in 2004, and many of our enterprise applications received national attention. Des Moines is a very different organization today than it was in 1998. I'm very proud of the role IT played in that development process.

Practical Assessment

So, after living without charge-back for six years, what are the upsides and downsides of that decision?

The good:

  • We made a valuable symbolic statement, indicating early on we were determined to make radical changes and provide better service to city departments.

  • We forced a partnership model through which all department-specific initiatives became joint ventures, with IT joining departments in funding battles and implementations.

  • We moved IT investment decisions to an enterprise level, with all departments participating in those decisions. IT is now viewed as an enterprise, not a departmental, matter.

  • IT became a "rising tide." As we changed how our IT investments were made, departments realized it was useful to have IT capability in departments other than their own. All boats were lifted. During budget hearings the following year, every department had something good to say about IT in their presentation.

  • Standards implementation became much simpler. It's amazing how quickly brand loyalty can disappear when someone else is paying the bill.

  • Budgeting for IT has become easier for departments.

  • We have maintained a focus on building enterprise IT, with all departments coming to understand they are important parts of a whole. Making the enterprise stronger made them more effective.

  • We reduced costs substantially through application of standards, enterprise focus and better investment decisions.

    The bad:

  • We no longer have a "demand throttle." IT resource allocation decisions have become more problematic.

  • Enterprise versus departmental tension remains an issue, though we have successfully maintained an adequate balance thus far.

  • Planning is a bit more complex, though as we have improved our enterprise capability, our response has been much better.

  • Budget difficulties shed by departments have accrued to IT.

  • IT staffing has become an enterprise issue.

  • Cost allocation is imperfect.

    Worst Practice

    Would I make the same decision again? In a heartbeat.

    Although at least one Gartner analyst calls lack of a charge-back system a "worst practice," I am convinced it was the right decision for our vision and our organization.

    Other organizations have charge-back systems that work very well. For the strategic role that IT plays in Des Moines, however, our new model has served us very well indeed.

    Michael Armstrong  |  Contributing Writer