In the past, if a company wanted to cut technology costs, they simply cut IT's budget and said, "Make do." But achieving enterprise IT ROI today is about a lot more than negotiating better prices, holding back on purchases, or laying off employees. It's about a new way of thinking about technology that makes the company more efficient and profitable in dozens of everyday ways. As Maritz grows more experienced with TBM and Apptio, this is a lesson senior management takes very seriously.
"It's not that TBM comes first or the culture comes first because they're one and the same," said Gerry Imhoff, senior vice president and CIO of Maritz Holding, Inc. "Technology business management means running technology like a business. And if you're going to have a successful business, you have to have an amazing culture. You can't separate the two."
Technology business management means running technology like a business. And if you're going to have a successful business, you have to have an amazing culture. You can't separate the two.
In 2015, Maritz began to decentralize IT while, at the same time, reducing its budget. This inspired an IT services transformation that increased the business' confidence in IT, cut costs, improved service levels, and enabled IT to channel savings to new initiatives.
"If people are resisting change and aren’t rolling up their sleeves and figuring out new approaches, you have to change the culture," continued Imhoff. "The stars aligned between Apptio, which allowed us to expose the data to people and hold them accountable for doing something about it, and a cultural transformation that enabled us to make sure we had the right people thinking the right way. That's how it came together."
Apptio enabled Maritz' IT department to automate cost transparency while moving from being a cost center to becoming a business enabler. Cell phone management is one very simple but effective case in point. As part of their mandate to reduce spending, IT was sending spreadsheet-based inventories of cell phone users to the business for input on reduction opportunities. According to Imhoff, it was a mess.
"One of our cost reduction pursuits was to limit the number of corporate-sponsored mobile phones," said Imhoff. "We were doing all that through spreadsheets and everybody was so frustrated because it was just wrong, people without phones would be on the list, we’d cancel the wrong person's phone—it was just a nightmare."
With the adoption of Apptio's automated data collection and reporting, things began to change—not just for cell phone management, but across the entirety of IT infrastructure.
For example, TBM enabled Maritz’ IT department to reduce its infrastructure budget by 35 percent, from $50 million to $32 million in three years, nearly half of which was immediately reinvested in the development of new business-focused service offerings as well as enhancing the company's cybersecurity posture. This not only gave Maritz' customers greater peace-of-mind that their data was safe, it helped the company's sales force close more sales in key security-conscience sectors such as financial services and healthcare.
There are two steps to changing the culture to enable financial efficiency. First, company executives have to get their people to rethink attitudes.
"We focus on the importance of relationships," said Kim Clark, vice president, PMO. "When we started leading with relationship building and getting to know our customers and stopped leading with, 'Let me tell you about this great new technology,' the dynamics shifted. We were able to understand the business' needs better and to introduce versus dictate new technologies to them."
Secondly, the company must ensure that the right information gets to the right people at the right times.
"Not having actionable information in the past on a range of different topics meant that we were making decisions without the right data. We were blind," said John Wahle, technology vice president for Maritz Travel and a business customer of Imhoff’s IT group. "With the ability to have both transparency and visibility into our costs and into our consumption against our target for the year, and then how we're doing from an infrastructure and services perspective on SLAs, we make better business decisions."
This not only helps IT enhance its reputation as business enablers and problem solvers by providing visibility into all aspects of operations, it shifts control over those resources from IT to the business units. This is how a service provider enables the business to achieve better efficiency and improve TCO and ROI at every level.
Culture and approach to the customer play a big part as well. "If I want to go in a different direction or have a different timing on rolling out technology that impacts Maritz Travel, I have the ability to pull that lever with the team," said Wahle. "If I want to implement Windows 10 on a different timeline or Citrix upgrades on a different timeline, I have the ability to actually influence that with my infrastructure partners as opposed to it just being dictated to me."
We focus on the importance of relationships. When we started leading with relationship building, the dynamics shifted.
TBM has helped IT adopt a business-first mindset but the key to being truly successful has been gaining the trust of John Wahle and other Maritz business leaders. The way IT accomplished this was twofold: first, by providing full details of costs for all operations, line-of-business leaders with P&L responsibility could see for themselves exactly where their money was going and then they could compare that to the results they were (or were not) getting from that spend.
"From a financial management perspective, when the data was locked in spreadsheets, two people in the organization knew what it was and how to get it," said Imhoff. "It was just not digestible, and definitely not actionable."
Second, Maritz’ line-of-business leaders were empowered to do something about those two trend lines—orders from above to cut costs are executed far more effectively if the business unit retains the discretion to decide where and how to make changes. Having fine-grained visibility into the financial performance of every technology dollar spent was crucial to Maritz.
"Not having those things in the past meant that it was a one-size-fits-all approach; where an internal business partner provides you with one option, and you have to figure out how you can adapt to that option," said Wahle. "Now, we have a lot more say in where we're going from our roadmap perspective and a lot more say in how we pull levers to improve things like SLAs."
Indeed, this new financial mastery allows Wahle to bring in-house and keep in-house services that he would have otherwise outsourced.
"I often get the question, 'Why aren't we moving more towards the cloud? Why would we want to host internally and be in that business any longer?'," he said. "For me, while there are services we host on the cloud today, the fact that I know what my cost structure is going to be, means I know how I'm doing against that cost structure in a very transparent way month-to-month. That gives me a much tighter management of SLAs and availability, which means I ask myself 'Why would I go to the outside?'"
As is often the case, the exceptions illustrate the rule. Jeff Carr, a senior technology project manager in the Maritz Motivation Solutions business, spoke about the instances where they have outsourced and how TBM has helped them.
"For some solutions, we've gone to Amazon Web Services and Azure, and Maritz IT has come along with us on this journey, making sure that all the monitoring is still in place, and all the resources that they can provide to maintain the scalability and the functionality that we really need are still here," he said. "Where it's felt in the past, even all the way down to the desktop and the laptop scenario, like, 'Here's what we have. This is what we use. This is the hardware and software you get,' today, we work collaboratively with the IT teams to determine and use those tools. They've come to the table with us and they’ve added us to their table. We've actually got a choice of what type of software and what type of hardware we want to utilize within our development teams. I mean, it's not only made my life and my job a lot easier, but it's a huge improvement over what we've seen in the past."
One of the biggest impacts of TBM over the last couple of years has been an overall and pretty dramatic cost reduction that Maritz IT Services has been able to achieve. This 35%-plus cost reduction has a direct benefit to all of the business units. “Even in cases where there has been the need to invest additional dollars in infrastructure, the infrastructure team's ability to absorb the majority of those increases so that they're not felt by the business units has been really big,” said Wahle. “I’ve seen examples of Gerry's team offsetting over 80% of necessary investments that we had to make from an infrastructure perspective so that we did not feel the pain from a business unit perspective.”
A new focus on communication helps too. Wahle’s team meets with IT services on a quarterly basis to review everything from projects to roadmaps around new technologies and how his team is doing against SLAs (hosting, network, end-user related, etc.). They also look at the financials, and how they’re doing on consumption, charges, and variances.
He adds, “But in addition to those formal reviews on a quarterly basis, there's been this amazing stream of outreach from all of the leaders in Gerry's organization. Not a month goes by that I don't have an in-person reach out from the hosting area from desktop, from network, from security. That really goes a long way to building trust and a collaborative approach to IT at Maritz.”
Corporate culture is not merely a set of attitudes and perceptions about what the company stands for and how it functions. That is reactive, something that simply evolves over time. Actively changing culture requires a company to decide, at its highest levels, what it wants its culture to be and must then make decisions that infuse the company with that desired culture.
To use an overhyped term, this often involves "empowering" employees throughout the company to make all manner of decisions. That means getting those people the information they need to make those decisions wisely. That's where TBM made a big difference at Maritz.
"Prior to us thinking this way, the technical groups were siloed and they thought of themselves as 'I'm a DBA group' or 'I'm a networking group,'" said Clark. "They didn't think about how they're impacting each other. Now, they're actually sitting down and working together and it's making a big impact. And then, to top it off, we're also bringing in our business partners, and we're all talking about the same thing."
But really the best thing that Maritz senior management did to accelerate this culture change was to "get out of the way," said Imhoff. "We just gave people the transparency and support they needed, turned them loose and they innovated like crazy and figured out how to save money and improve service and customer satisfaction at the same time. That’s how we know TBM really works."