IMO, if you're going to charge everything back to the business units then you also need to provide some kind of consulting-style services, or best practices, or

IMO, if you're going to charge everything back to the business units then you also need to provide some kind of consulting-style services, or best practices, or guidebooks, or something. Otherwise you lose a lot of your economies of scale because each business unit is trying to figure out the best way to do things. Or you end up with shadow IT all over the place because the BUs come up with cheaper but unsanctioned/unsupported ways to do things. You also need a way to objectively evaluate how IT is performing. If the business units are going to third parties because IT is unresponsive or overly "expensive" then the exec team needs a way to see that. When IT is responsible for the IT budget then they have incentive to minimize costs and it's easy to do budget reviews. When the business units have to pay that budget then IT acts as a monopoly with little incentive to improve service or reduce prices and it's much harder to find the shadow IT that's being implemented to get around bad internal IT. There's no one perfect answer.