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SharePoint as an IT service offering

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At the Puget Sound SharePoint User Group (#PSSPUG) meeting last night, Owen Allen (@owenallen) led a panel discussion on SharePoint as an IT service offering with several prominent members of the SharePoint community who have various roles in building and offering IT Services around SharePoint. It was a lively discussion to a densely packed room, with quality input from the panelists and audience. Owen had asked me to participate -- given my experience in helping launch SharePoint as a hosted platform while at Microsoft (as part of the early BPOS team, now part of Office365), as well as experience building out and deploying a hosted collaboration platform while working for E2open in the early 2000's -- but I decided to sit this one out, enjoying the show from the back of the room (next to the pizza).

Some of the major themes discussed:

• Gaining executive support is critical - not just financial sponsorship, but executive understanding of what is being built.
• Aligning SharePoint to specific business outcomes is harder than people think.
• Creating "chargeback" models is difficult, and not everyone agrees that SharePoint should even have one or be managed that way.
• Successful models include some kind of end user training or certification, reducing support and governance overhead.
• Nobody respects IT.
• SharePoint is a living thing, intended to evolve. It pushes IT and CIOs to respond to the business differently.
• If IT stifles innovation, people will go around them.

• Do social or social gets done to you. Social is huge outside of SharePoint, and should be planned before it becomes a compliance/legal concern.

• At the core of SharePoint IT Services is understanding the governance model, and what should be owned by IT, by vendors, by end users.

• IT should run POCs on connecting SharePoint to cloud services, find ways to innovate, and introduce their findings to the business.

• Most organizations are not ready for a SharePoint "app store" even if they could figure it out.

A good portion of the conversation was spent discussing chargebacks -- the idea of creating a cost model around SharePoint and having teams "pay" for their SharePoint sites. For example, IT might provide every team with a generic, out-of-the-box SharePoint team site, but chargeback to any business unit requesting additional sites, additional storage, or custom development. Perceived benefits to this model include better executive and organizational understanding of the costs involved with customizing and extending the platform, improved prioritization of what is being built (and by whom), and the ability for IT to better demonstrate their role and value to the company.

The audience seemed to be mixed on the concept. Several comments (including my own) pointed to the difficulty in successfully rolling out a chargeback model. Some felt that SharePoint should be viewed as a critical business system, like a CRM or ERP system, where a chargeback system treats it as more of a "nice to have" technology platform. While the panel provided some good real-world examples of their own companies or of customers trying to make the model work, there was general agreement (my sense) that none of them were ready to step up and document their system as a case study. For everyone, it is a work-in-progress.

What is driving this dialog? As SharePoint becomes so pervasive, and companies buy into the marketing and the potential for productivity that SharePoint promises, they are quickly realizing that their own deployments are more akin to sprawl. While not a unique problem to SharePoint, the experience is fairly consistent, and needs to be addressed. Companies are looking for best practices to help them manage SharePoint, and get the most value out of their investments.

In my view, it comes down to three things: understanding the business value of SharePoint up front, clarifying the scope of what is to be built before you start building it (novel concept, I know), and understanding how to manage what you have (governance) to maximize performance and value. When you have a handle on these three things, understanding how to implement a chargeback model (or not) becomes much more clear.

What is your experience with offering SharePoint as an IT service offering? What has worked within your organization? What didn't work? I'd love to get feedback from other who may have experience with this concept (with or without SharePoint).

Thanks to Owen and the PSSPUG committee for a great event, and to Karuana Gatimu (@karuana), visiting from the #SoCalSPUG, for the making a big Twitter push throughout the event. 

Comments

SharePoint Chargebacks is interesting. Would love to hear more discussion on it.

Submitted by Doug Hemminger July 22, 2011 - 10:04 PM

The idea of chargebacks for the cost of a SharePoint implementation is interesting to me. While certainly not applicable in all (or even most) situations, I can certainly imagine a scenario in a large, decentralized, profit-center oriented company where chargebacks may be appropriate.

Scope (read cost) is a consideration in every SharePoint implementation. It often manifests itself as one aspect of governance. We will not spend more than $X on hardware, infrastructure, licensing, training, etc...So, we have to place limits on how it is used. Department A will get X number of site collections with a max of Y storage. Department B will get...

Deciding scope (cost) through governance is a centralized decision making process. Whoever the decision makers are (governance committee, IT committee, etc...) are making the decision about how much to spend. And that it is enforced through governance and limits.

But what about an organization that is decentralized to some degree. They want a collaborative environment to leverage knowledge across the organization, but they want to give the freedom to individual profit-centers to expand their SharePoint implementation as they see fit. Governance is of course still important, but maybe not to the degree of managing how much space each department gets. But how do you manage what then becomes a departmental externality? Chargebacks.

While certainly not for all situations, I can see chargebacks making sense in some unique cases. I would love to hear further discussion on the topic.

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SharePoint Appstore as a chargeback model

Submitted by Maarten Visser August 02, 2011 - 12:32 PM

I also have had many cases where creating a chargeback model looked like a difficult tasks. And as Doug writes, this is getting even harder at decentralized organizations.

A model where every organization unit pays a fixed price per year (per user) is possible. This price could consist out of the datacenter costs, all software licensing, system administration costs and overall implementations cost (needed to build the company intranet and basis SharePoint services). You can divide all these “SharePoint platform” costs by the number of users.

It becomes hard when you want to break down all solutions that get build later on (all custom build solutions for departments and business units). You can break then down by project, but then you get the problem that the more innovative departments asking for new functionality will always have to pay for it (and the laggards always get it free). And this will stop innovative front running departments from asking for new stuff, since they always need to pay for it.

@ Christian. You wrote: Most organizations are not ready for a SharePoint "app store". What made you think so?

I’m really convinced the ‘SharePoint Appstore’ could be a great chargeback model. The ‘innovative department’ could be the owner of the application after it got build. This way this department could even earn money from their investment, if enough other departments would deploy their solution! In some organizations this model could lead to a race between departments….

Or am I to positive here?

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