When software costs sit in one central IT budget, the teams that use the software rarely see what it costs. Showback reports costs to those teams; chargeback moves the costs into their budgets. Both make spending visible to the people who drive it, which tends to change behavior: unused licenses are released faster, and requests for premium tiers become more considered.
A report to each team of the software it uses and what it costs. No money moves; behavior changes because the cost is visible.
The cost is moved into each team's budget. Stronger incentive, more need for accurate and agreed data.
Allocation methods compared
| Method | How it works | Best for |
|---|---|---|
| Headcount share | Split by number of employees per team | Shared platforms everyone uses |
| Licenses assigned | Charge per license assigned to the team | Per-user SaaS |
| Active users | Charge for licenses actually used | Products with uneven use |
| Metered consumption | Charge by units consumed | Cloud and usage-priced services |
Showback first
Showback carries little risk and builds trust in the numbers. Publish a monthly or quarterly report per team: products, licenses, active users and cost. Move to chargeback once teams accept the data.
A useful showback report
Common pitfalls
- Keep the model simple enough to explain in one slide.
- Charge only for what teams can control.
- Keep shared platforms central, or split them by a simple rule.
- Allocation models so complex nobody understands their bill.
- Charging for licenses teams cannot release themselves.
- Moving to chargeback before teams trust the data.
How MI One helps
Frequently asked questions
Does chargeback reduce costs?
It often does, because teams release licenses they do not need when the cost lands in their budget.
Should every product be charged back?
No. Shared, enterprise-wide platforms are often simpler to keep central.
How often should showback reports go out?
Quarterly is usually enough; monthly for teams with large or fast-changing consumption costs.