IT Chargebacks for Engineering Applications

Chargebacks for IT software & services can surprisingly be an emotive topic for managers in most organizations. Issues can be summarized as:

  • Typically Engineering Directors feel they are hit with escalating costs on a yearly basis, with very little transparency as to how these were calculated.
  • The IT functions understand their staffing and project costs but lack the information to apportion license usage to individual users or groups, resulting in a single Engineering Software cost applied to all users.
  • The IT analysts feel they waste too much time calculating costs for licensing. Especially if staff leave or there are new starters. How do you pro-rata the costs?
  • Users of expensive simulation software (FEA, CFD, HPC) with many different add-on modules, that are only ever used by a small number of specialists, end up being charged the same rate as an occasional user (Manufacturing Engineer) who simply accesses the PLM tool a few time a week.
  • Heads of Departments would prefer to see regular/monthly running totals of costs to ensure they are tracking to budget.

These issues, unfortunately, cause conflict within organisations and sometimes ongoing distrust between leaders. The main culprits are CAD, CAx, FEA, EDA, PLM, AR/VR where licenses are typically floating and network-enabled instead of named-user, toolsets which Business level SAM (Software Asset Management) solutions cannot track. With the recent trend in token-based licenses (Altair, Siemens NX, Simcenter, etc) an effective usage tracking tool will become essential to track to a much lower, more granular level.

However, this is entirely avoidable and companies following software asset management ‘Best Practices’ are able to provide full transparency by reporting IT costs down to user-level, even providing variable costs based on the actual usage of software tool modules.

I will show you how we deliver this capability within LAMUM (License Asset Manager with Usage Monitoring).

The image below (Figure 1) shows a User Detail report for the Siemens NX feature – NX13100N on the license server NX_demo. Here you can see how we automatically provide a chargeback percentage. Please remember this information is provided for every feature and for every license file that is tracked, allowing for a completely granular IT chargeback process.

All of the reporting data from LAMUM can be exported to Excel at the click of a button or via a batch report (email or file-based) which could allow IT departments to generate usage and cost figures on a daily, weekly, monthly, etc. basis.

The above image shows the data once exported to Excel. I have added the last column to calculate the individual’s cost by dividing it by the annual software maintenance cost for feature NX13100N.

Please remember, that these costs can be calculated (and automated) for all license features, across all license daemons. As an example Design Engineer user “bbaker” uses Siemens NX (CAD), Teamcenter (PLM), Mentor (EDA), Ansys (FEA) and IBM Doors (Requirements) products on a daily basis, these are all products we track within LAMUM, costs can be automated per user on a daily basis. We think the budget holders will be very impressed with this level of transparency over costs!

This post was based on this LinkedIn post by Paul Empringham, TeamEDA’s European Sales Director. Paul has over 20 years experience within the Engineering and CAD/PLM software industries. He was a consultant with Siemens PLM working with many of Europe’s most innovative manufacturers. Paul has also held management positions at a number of organizations running Engineering Application teams and delivering large PLM transformation programs. Outside of work, Paul is a Level 2 ECB Cricket sports coach and enjoys skiing whenever the opportunity arises.

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