By changing budgeting from a one-time event into an ongoing process updated in real-time, TBM gives First Citizens Bank the insights it needs to make better technology decisions faster.
Like so many IT departments before them, the ability of First Citizens Bank's IT organization to positively impact the business was being hampered by its inability to link business value to the dollars it was spending.
The information and data were buried under the weight of 320 spreadsheets, relegating budget forecasting to a once-yearly event. Answering ad hoc queries was a process that took days, if not weeks, of intricate pivot table digging.
"Prior to using Apptio and the TBM processes, we were very spreadsheet heavy," said Wesley Cole, First Citizens TBM director. "Literally, we had hundreds of spreadsheets that we would track our budget on and do our forecasting. And if any one of those spreadsheets became corrupted or lost, it would literally take hours or days to recover."
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In this environment, the business and IT must work together to ensure that every dollar IT spends has the greatest business impact.
"In today's world, technology changes quickly," said Cole. "And you need to be able to respond very quickly from a financial standpoint. You need to understand your numbers. You need to understand how changes in technology are going to impact them both in current years and in future years."
In search of a solution to using, the team sent technology finance consultant Robert Winchester to the 2014 TBM Conference in Miami. During the day he took part in keynotes, networked with fellow attendees, and attended sessions. By night, he was busy (somewhat ironically) working on the spreadsheets for the bank's 2015 budget. That's when he realized there was a better way.
"I was working with my team back [at the home office] while I was actually at the conference," he said. "But I met so many people at the conference that were laughing at what I was doing. As I got to know more and more people, it became very clear that we needed to go in this direction to simplify what we were doing. And 90 days after that, we had actually had our first plan and some of our actuals pumping through the Apptio tool."
First Citizens started with Apptio's Cost Transparency module. This allowed them to see, for the first time in many cases, who was actually consuming a given technology and what that was costing the bank.
"When we first started the implementation of Apptio, we're in the midst of our budget cycle, just like we are now," said Will Laming, Citizens IT finance manager. "We were in a budget review meeting with our CIO when she asked us a question about, 'Could you look at this data a little bit different?' In the old days, it would have taken us a week to come back with the answer. While we were in the meeting, we opened up Apptio, used some of the slicers and we could answer the question immediately. We weren't fully implemented yet, but we were still able to add information that we didn't previously have to the conversation. That's the real power of Apptio."
This ability to ask and easily answer questions about current and future state of technology spending has given the bank's line of business managers a much better understanding of how their past demands and future desires impact IT's ability to deliver the technology the bank needs to compete.
"As we're using the Apptio tool, we realized how easy it was to forecast," said Laming. "In the old days, we would do maybe one forecast a year. Currently, we're doing quarterly forecasting and it's really allowed us to be more nimble as we go through the budget cycle during the year. Things happen every day. We're able to react and then adjust our normal spend accordingly. As we talk to our departmental managers about how they're spending their money, we're able to give them good insight and information on things that they could change to spend that money in a better way."
Because of TBM's ability to lift the lid on the black box of IT spending, Apptio is now IT's system of record for all of IT's finances. And, since Apptio continuously updates reports with new data, IT finance no longer has to spend days just populating reports to present to management. Since implementing Apptio, IT actuals have come within one percent of forecast for the past four years.
"Having our forecasting [become] a process versus an event allows us to give financial projections really at any given time," said Winchester. "So if we need to know the impact of taking on an additional project or hiring additional resources, it's not a whole forecasting process that we have to go through. We're able to provide the answers to those questions basically on the spot now instead of having to go through an entire process to come up with what should have been a pretty simple answer."
Simple answers to complex questions are always welcome but without the insights Apptio now provides, that proved a difficult proposition in the past. Today, they use Apptio for much more than just managing and forecasting IT's finances. The TBM office has taken on capital planning for the entire organization, including the corporate real estate department.
"The two primary modules that we use are our Cost Transparency and IT Planning," said Cole. "Primarily from a cost transparency standpoint, we use that for our budgeting process … forecasting our monthly reporting as well as our detail analysis for year-over-year comparisons. And then, from an IT Planning standpoint, that's a more recent module for us where we're doing a better job of using and forecasting our capital and the impact to depreciation year over year."
The combination of knowing where IT's money has gone (Cost Transparency) and where it could go in the future (IT Planning) have transformed the way that First Citizens does business. The main benefit of seeing detailed spending data is being able to zero in on just the areas that need attention. This allows the business to be much more targeted with the technology dollars it spends. One year the focus may be software and hardware. Another year it may be in personnel expense. In once instance alone, they were able to consolidate contracts, saving over $1M.
"The tool actually allows us to drill down and go year-over-year from a comparison standpoint, see what our trends are, and forecast ahead for both current year in future years," said Cole.
Going forward the plan is to focus on IT Cost Tower reporting in an effort to further rein in costs as they transition to new technologies like cloud.
"The insight that these tools and processes give us allows us not only to effectively manage the IT budget within IT, but then to look at that in comparison to the budget and income of the bank as a whole so we can make sure that we're not growing faster than the bank as an expense," said Cole. "We can understand what part of non-interest expense we are, and then we can do the management we need to do to make sure that our costs are in line with what the bank expects and what the bank needs."