Improving the Business of IT

Technology companies fundamentally understand the power of IT and its ability to drive strategic advantage and operating efficiency for companies. However, too many companies, technology or other, have ignored that the operations of running IT should have the same rigor and financial tools as other parts of the business. By applying the best practices of operational efficiency learned from manufacturing and supply chain, IT can significantly reduce the cost of operations, improve service and shift more resources to driving new strategic initiatives. Technology Business Management strives to fill that gap, by providing IT with the ability to deeply understand the cost of IT down to its fundamental unit drivers, calculate the total cost of IT services, drive systematic cost optimization and better communicate the value of IT across key business stakeholders.

"IT needs to think about delivering IT services in the framework of a supply chain: How much does it cost to 'produce' and 'operate' our services? Are we competitive? How can we reduce cost and improve quality? And how can we ensure supply is aligned to demand? Technology Business Management is a key ingredient to helping CIOs manage the business of IT and provide transparency into the cost of IT services to business leaders. " Rebecca Jacoby, CIO, Cisco Systems

Managing the Cost of IT Services

As IT organizations move to a shared services model they need to accurately track the cost of IT back to the business units. The best way to do this is by understanding the usage (business demand) for IT Services and closely managing the cost of IT Services (supply) in order to fairly allocate cost based on consumption. This requires a cost allocation system that can track unit costs, their allocation proper allocation to an IT Service and appropriation to the business units based on a metric that the business unit understands (cost per employee, cost per transaction, cost per retail product produced or delivered.)

Apptio's TBM solution provides the robust enterprise platform to track the cost of IT at a very granular level, provide the analysis and What If tools to find and justify cost reduction projects and the reporting capabilities to track long-term project success. Apptio provides five TBM applications designed to help Manage the Business of IT: IT Service Costing, Bill of IT, IT Benchmarking, IT Planning and IT Service Performance. These applications help IT and IT Finance managers systematically reduce cost, track the fully loaded cost and quality of IT Services, improve budgeting and planning processes and better communicate the value of IT to all key business stakeholders.

A Better Method for Cost Reduction

Many IT organizations don't have the tools in place to track costs down to the unit level, and how those costs relate to an IT Service or business unit. With Apptio's TBM solution, IT managers can use data analytics to deeply understand key cost drivers and find opportunities for easy cost reduction. Domain managers (servers, data center facilities, storage, support) can better manage their costs at a grass roots level. And sophisticated What If analysis enables ROI-based project analysis and a pre-active approach to "cost savings project portfolio analysis." This leads to a culture of Continual Cost Optimization where IT managers across the board are challenged to take cost out of their departments each year and shift more of the IT budget to Change the Business initiatives.