Explain the concept of 'showback' vs 'chargeback'.

Explain the concept of 'showback' vs 'chargeback'.

• A. Showback informs cost to business units without actual charges; chargeback allocates costs to units as a bill, enabling accountability.
• B. Chargeback allocates costs to units as a bill; showback informs costs to business units without charges.
• C. Showback and chargeback are the same concepts.
• D. Showback is used for external customers; chargeback is used for vendors.

Answer: (C)

Showback and chargeback are two ways of handling internal IT costs, but they aren’t the same thing. Showback is about visibility: you collect usage and cost data and present it to each business unit so they can see what they’re consuming and how much it costs, without actually transferring money or creating an internal bill. Chargeback takes that same cost data and turns it into an internal bill, so the business unit is charged and pays within the organization. This internal billing creates accountability and can drive cost-conscious behavior and optimization, whereas showback mainly supports budgeting and transparency without enforcing payment. In practice, teams often start with showback to build awareness and may move toward chargeback later, or use a hybrid approach where some services are charged and others are just reported.

Showback and chargeback are two ways of handling internal IT costs, but they aren’t the same thing. Showback is about visibility: you collect usage and cost data and present it to each business unit so they can see what they’re consuming and how much it costs, without actually transferring money or creating an internal bill. Chargeback takes that same cost data and turns it into an internal bill, so the business unit is charged and pays within the organization. This internal billing creates accountability and can drive cost-conscious behavior and optimization, whereas showback mainly supports budgeting and transparency without enforcing payment. In practice, teams often start with showback to build awareness and may move toward chargeback later, or use a hybrid approach where some services are charged and others are just reported.