Usage-based pricing enables IT to charge back to Business Units cost based proportionately to their consumption of resources. This strategy can be implemented in Accounting Component by using the Application type service option element and choosing the Usage Based selection for its Pricing Structure when defining services for a Business Unit. This element type allows for the specification of a unit cost and a metric type.
Once usage based data is imported into the system using data mediation, the metric result can be used to calculate the total cost of that service for an account. In addition to global account charges, these usage-based amounts can be processed on a per user basis.
Implementing usage-based billing involves knowledge and decision at multiple levels within an organization. For example, financial decisions determine how to present and price these services. Also, the process involves IT technical decisions on where and how to collect and process useful usage data, and how to handle exceptional cases like adjustments and promotions.
Usage-based chargeback makes the assumption that the associated resources are shared among several Business Units and their unit cost is fairly static. Fairness is achieved here on some level because consumption is directly linked to the cost incurred. There might be some question as to how charges are influenced by the demands of other Business Units and how this can affect controls on cost.
For instance, when services are set to employ weighted distribution as the means of distributing charges, lowering usage levels of these services does not always guarantee lower cost. In this case, one Business Unit may decide to cut usage back by 5%, thus expecting a relative change in the cost that it is allocated. However, if all other Business Units that contend for the same resources also make a decision to cut back on usage, but at a higher rate, the original Business Unit is forced to pay more than it did previously. Although control can be a problem, this model does have an effect on business unit behavior.
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