Join the more than 1,000 Apptians across the globe. Regardless of your specialty or location, we’ve got an opportunity for you.
![ApptioCareers-Employee[1]](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHZpZXdCb3g9IjAgMCAyMjUgMjc1IiB3aWR0aD0iMjI1IiBoZWlnaHQ9IjI3NSIgZGF0YS11PSJodHRwcyUzQSUyRiUyRnd3dy5hcHB0aW8uY29tJTJGd3AtY29udGVudCUyRnVwbG9hZHMlMkZlbGVtZW50b3IlMkZ0aHVtYnMlMkZBcHB0aW9DYXJlZXJzLUVtcGxveWVlMS1xZzVuenB5MHdoaWJtbzZvdmJqNGM3MHh0aTUzdmo1OHM0endwajh0dHMucG5nIiBkYXRhLXc9IjIyNSIgZGF0YS1oPSIyNzUiIGRhdGEtYmlwPSIiPjwvc3ZnPg== "ApptioCareers-Employee[1]")
“The ability to analyze, review, and discuss costs with our operating groups to drive business decisions was deemed a key enabler of our digital strategy.”
BMO is focused on building, investing and transforming how it works to drive performance and grow the good for its colleagues, clients and communities. The company’s Digital First strategy is focused on evolving the bank into a future-ready organization by modernizing IT, transitioning to cloud, and delivering leading customer experiences. IBM Apptio has been a key enabler in this effort, providing a platform that has allowed BMO to:
BMO is a leading North American bank that specializes in providing personal and commercial banking, wealth management, and investment services. Founded in 1817, BMO is the eighth largest bank in North America by assets and serves over 13 million customers across the globe.
As a leader in the financial services industry, BMO is focused on serving its customers and delivering high business performance by continuing to evolve as a digitally enabled, future-ready bank. This ongoing transformation includes deploying new features and functionalities that will increase digital engagement: grow the number of active mobile users, increase self-service transactions, and deliver personalized, data-driven experiences.
But to accelerate its transformation, the organization needed greater visibility into the cost base of its Technology & Operations (T&O) group. “The ability to analyze, review, and discuss costs with our operating groups to drive business decisions was deemed a key enabler of our digital strategy,” said Vipin Ghelani, Head, Technology Performance Management at BMO.
The company’s previous financial management solution provided limited visibility into the breakdown of IT costs. While this approach effectively tracked high-level expenses, there was an opportunity to improve cost allocation accuracy. Historically, over $3 billion in annual IT costs were distributed across the organization, with more than 50% allocated evenly. “We previously used a ‘peanut butter spread’ approach to allocate costs evenly across the organization,” Ghelani said. “While consistent, it limited visibility into individual group expenses and cost-saving opportunities”.
To address these challenges, BMO implemented IBM Apptio in 2019.
“Before IBM Apptio, our processes operated independently,” Ghelani said. “Costs were tracked in a piecemeal fashion, with separate teams managing tech, infrastructure, and other allocations. As a result, we lacked a unified application cost view.”
IBM Apptio enabled BMO to unify financial and operational data to create a model of IT costs based on a standard taxonomy for cost categorization. This allowed the company to move away from spreadsheets and, utilizing IBM Apptio’s industry-leading allocation rules, they no longer had to rely on assumptions to allocate spending. “Apptio has helped us get all our costs into meaningful cost groupings — applications, end-user devices, processes, etc. — and present the information in one place,” Ghelani said.
This unified view has proven valuable to senior T&O leaders. They use the information from IBM Apptio to explain the makeup of T&O costs to their CEO, CFO, and operating group leaders and show them how their decisions impact their T&O spend. This enables leaders to take action and make informed decisions for cost optimization.
In addition, BMO has used IBM Apptio to show total cost of application ownership and application health. According to Ghelani, they use IBM Apptio to break down their application costs, so they can better understand how much the company spends on Run versus Change, non-strategic applications, incident and patching costs, and detailed component costs for infrastructure and the cloud. “Cost transparency on a page enables better conversations and a deeper appreciation of causality,” he said. “Senior bank executives now have a better appreciation for the services because we have removed the complexity that existed before.”
Today, BMO has increased direct attribution of cost allocations by 70%. And, Ghelani said, the team can provide granular cost details tied to applications and to operating groups that gives business leaders the right information to make decisions and more options (or levers) to lower/optimize their costs.
Another major component of IT cost is labor. For BMO, labor costs make up over 65% of the company’s IT spend. Therefore, understanding and tracking the labor mix is crucial to expense management, especially in uncertain economic times. Ghelani said IBM Apptio has helped them calculate unit cost across the various labor types and determine an average unit cost at the T&O level and for each senior leader in T&O. BMO now has OKRs (objectives and key results) for labor, and that enables the organization to ensure it is on target for labor spending.
“We organized our labor costs by resource (employee and contingent talent) and set targets for the mix at an aggregate and an executive level,” he said. “Then we developed targets that allow us to offset a significant percentage of the inflationary and war-on-talent cost pressures while ensuring we have employees in strategic roles.”
The effective monitoring and correlating of the labor mix and cost has made the T&O organization more efficient, Ghelani said. It provides them with flexibility, balancing in-house knowledge with outsourced support, and enables the company to make better decisions on how to adjust the mix for changing business, and market, conditions.
Another benefit of building out the labor cost use case has been alignment between teams, something that was hard to achieve before implementing IBM Apptio. Today, IT, finance, human resources, and strategy teams all agree on a singular methodology to track T&O labor and its associated costs, and that has helped foster better communication and decision making.
IBM Apptio has enabled BMO to create a unified cost model and standard taxonomy for IT costs, establish application total cost of ownership (TCO), increase efficiency through labor cost planning, and improve alignment between teams. The next step, according to Ghelani, was optimizing their back-office processes (mortgage fulfillment, loan fulfillment, cash management, and others) by developing a process TCO use case.
“We wanted to understand the type of work people are doing, so we could understand the processes that are running in each area and the products that are supported from those processes,” he said. “Ultimately, we wanted to know which lines of business or operating groups are benefitting from those processes and those products.”
To do that, BMO used IBM Apptio’s Enterprise Business Management (EBM) solution, an analytics platform specifically designed to analyze, optimize, and quantify the value of shared services. BMO has completed the first version of its process TCO use case and is now building in better labor and vendor information for its next release.
“EBM has allowed us to take what we were doing in spreadsheets, move the data into the platform, and automate the process,” Ghelani said. “Now, we are standardizing our process and product taxonomies and making sure our tagging of costs is consistent across the company. Once this is finished, we will be able to view TCO by process, which will give us the insight we need to make decisions that will further optimize our costs, increase efficiency, and increase value, and get us one step closer to our ultimate goal of measuring product profitability across both tech and operations.”
BMO established their FinOps practice in November 2023 after having run a successful pilot initiative and leveraged IBM Cloudability to gain valuable insights into cloud cost monitoring, and optimization recommendations. Prior to this the analysis was done siloed and at various levels of maturity across without having a unified view.
According to Swapna Samuel, Head of Central Cloud FinOps at BMO, as the company’s cloud footprint grew, it became even more important to manage cloud spend. This included implementing good cloud governance and clear practices, educating people on FinOps, and utilizing the full capability of IBM Cloudability.
“IBM Cloudability helped us optimize,” she said. “It identified our idle instances, non-production resources running 24/7 that shouldn’t be, and key areas to target for optimization. This insight along with other rightsizing recommendations from Cloudability enabled us to take actions that reduced our cloud spend by 17% in the first 12 months and helped us implement standards and best practices for our teams going forward.”
BMO continues to leverage various functionalities to automate processes including providing cloud forecast references available for project managers to view without having to hop between applications. The FinOps maturity across the organization continues to grow. The number of users actively leveraging the tool have grown 3x in the past year along with the tangible results of minimizing waste and maximizing value progressively.
Apptio has been a key enabler in helping BMO. Ghelani said, “So far in our journey, the key benefits of using IBM Apptio have been making sure everyone is speaking the same language (regarding cost categories), the data is insightful and easy for people to understand, and there is clear transparency.”
Ghelani stated that the company has achieved considerable success with IBM Apptio since 2019, but there is more to come. They are continuing to expand their application use cases to give operating group leaders even more information to help them lower costs and optimize application health.
Importantly, this foundational work with Apptio has positioned BMO to adopt emerging AI tools more effectively. With strong governance and clean data sets in place, BMO is prepared to support scalable AI use cases – a growing focus across the industry.
According to Ghelani, BMO’s leaders see business value in the information his team delivers. T&O leaders use cost transparency information to answer questions from senior executives and operating group leaders. In addition, BMO is working toward achieving service ownership, which will enable T&O leaders to explain the cost and value of the services the T&O organization provides. Senior executives are pleased with these capabilities and are eager for more.
“They are very supportive of the use cases we are working on,” Ghelani said. “And they want us to move as fast as we can to deliver them.”
One of BMO’s highest priorities moving forward is to shift from a project view to a product (or domain) view. Ghelani explained that they are working to map all applications to domains and continuing to build out the rest of the T&O costs.
