SAFe with Chargeback Accounting?

Question

My company is very project-oriented and siloed. Many business units don’t want to fight for the money thus they build their own shadow IT. I think it's because of Chargeback Accounting. It’s all about finding the money or gaining approval for the money.

Like my last company, the money was all shared in one centralized IT budget; we could have sustainable agile teams with all business units/applications represented (each with their own backlogs).

Of course, Big Room planning facilitated the most important things to be worked on for the organization, so the Product Owners sometimes had to concede what was worked on, but at least their concerns were on a backlog to be worked on at some point.

Is Chargeback Accounting going to kill any scaling of our Agile rollout?

Answer 1

Fine-grained chargeback accounting is certainly at odds with Agile. My book, "Agile IT Organization Design" (Chapter 9. Finance) talks about a particular type of chargeback accounting called activity-based costing (ABC):

While ABC mechanisms may ensure fair allocation of costs, they are expensive to deploy and run, and they have side effects. The moment there is a rate card for everything, team members may find they cannot simply requisition resources and services as and when needed. Cost-conscious business unit leads may frown on requests not in the plan or may introduce approval gates even for small costs. Thus, fine-grained chargebacks tend to encourage cost-efficiency over responsiveness. Coarse-grained, post-facto chargebacks work better in this regard, even though they tend to apportion incurred costs less accurately.