Rate and Cost Structure Transparency


In a recent article in CIO Magazine Mohanbir Sawhney writes:

Transparency is a good thing for customers, but it seems to threaten suppliers. One of my favorite questions for executives is: If your customers knew everything about your products, your costs, your prices and your competitors' offerings, would you be better off? Judging from the uncomfortable silences I usually encounter in response, most executives believe that transparency is an enemy of profit.

While I think this is an interesting question for companies, as a whole, I think it also has a special meaning for CIOs who run IT service organizations that charge internal customers for their service. 

One might wonder why this question even needs to be asked.  It would seem that within a single company or organization, rate and cost transparency is a no brainer.  But we're all familiar with corporate politics and this process is subject to the same pulls and tugs that other corporate decisions are. 

The problem is more accute internally because internal customers have an expectation of openness.  They resent not knowing and will come up with their own explainations of costs if they don't get good information. What they make up is almost always more damaging to the IT organization that the truth.