Inquiry and summary posted by Wendy L. Stotts, Carlson Companies, Inc, on November 4, 1998

I have been asked to try to determine the "Best Practices" regarding how Corporate Information Centers costs are handled within the organization.  I need to know:

Are Corporate Information Centers costs handled as a corporate expense?

If not, do Corporate Information Centers generally charge per research request? (In other words, the Information Center user receives the information with a bill.)

For Corporate Information Centers that reside in the Headquarters of a company with multiple subsidiaries (like our organization), if users aren't directly billed, are costs allocated to those subsidiaries, and if so, how?

Please respond directly to me if you are comfortable sharing this information (I don't need to know $ amounts, just processes). I would also like to hear the advantages/disadvantages of any system you are using.

Additionally, please let me know if you are aware of any research reports on this topic.

Thanks to all who responded to my question. As of this hour, I have received eight responses:

1 - Charges back to a job number.

1 - Allocates costs to the Business Units based on the staff size of the Business Unit. Database costs are charged either to the client or to the requesting office.

2 - Keep Corporate Information Center costs as a corporate overhead expense. Advantages are: reduction in time spent tracking time, online costs, etc. No need to "watch the clock" so as not to charge a user too much enabling adequate time to find best answer, total costs for Information Center are less since the corporation only has to fund the information (not funding additional personnel to track, bill, etc.). Disadvantage is constant need to justify costs during budget review times.

1 - Charges business units based on time and costs, chargebacks go to business units on quarterly basis.

1 - Charged business units for time ($150/hour) with specific charges for other items such as Dun & Bradstreet Credit Reports, SEC Documents, etc. This corporation had CHANGED from being totally funded as a corporate overhead expense. Billing users directly drove users away and resulted in the eventual closing of this Corporate Information Center.

1 - Allocates budget annually based on each business unit's percentage of use for the prior year. This represents a change for this Center as they had billed per request. Billing per request was abandoned due to the amount of time spent administering the billing. All research is tracked on a database, so the lnformation Center can prove to each business unit that the percentage charged is correct. It has proven much less aggravating and time consuming than the old method.

1- Allocates similar to the method above, annually based on each business unit's percentage of use. Currently experiencing difficulties with that method in that large projects or initiatives will cause large swings in the allocation from year to year. Also, smaller business units have difficulty managing the swings in budget allocation from year to year, resulting in some business units discouraging use of the Center. Has billed per question in the past, but abandoned that method due to the high overhead of tracking and billing.

I hope I have accurately represented what each of you have contributed. I have not named the centers to protect confidentiality.

Edited on September 14, 2005