Executive summary
Husqvarna Group is a leader in creating smart, innovative products. Technology is a linchpin, integrated into every design, operation, and manufacturing process, supported by a Global Information Services department. As a result, managing growing IT costs is a business imperative. But IT Financial Management (ITFM) processes were time-consuming and arduous, leaving senior leaders questioning the value they were getting for their IT spend.
IBM Apptio enables Husqvarna Group to use an industry-standard framework for managing and optimizing IT costs. Through automation and integration, Husqvarna Group has turned once cumbersome processes into a streamlined approach to ITFM, helping to clearly demonstrate the business value of their IT costs and investments.
Company overview
For over 300 hundred years, Husqvarna Group has been an industrial leader. From its early beginnings as a weapons manufacturer in the Swedish town of Huskvarna Group, the company has grown and evolved into a global leader in solutions for managing forests, parks, and gardens, as well as cutting equipment and diamond tools for the light construction and stone industries. Always with an eye for creating smart, innovative products—from robotic mowers to chain saws, watering systems and power cutters—Husqvarna Group continues to thrive, with operations in 40 countries, 28 production sites, and more than 12,000 employees.
The challenge
Over the last decade, the Global Information Services (GIS) Function at Husqvarna Group has doubled in size (employees and spend) because of increased digitization, higher demand from the business, and increased reliance on integrated technology systems for the development of new products.
For years, the company’s ITFM processes revolved around Excel, with the IT Finance team manually loading data into hundreds of Excel sheets. The data was then processed using complex formulas for creating a monthly IT chargeback for the different cost centers and business divisions, as well as for producing annual budgets and quarterly forecasts.
As the GIS division grew, managing IT costs became more and more important. But Husqvarna Group’s Excel-based process made it a challenge to keep up. Manually loading cost data from the company’s different systems was time-consuming and susceptible to human error. Working with a massive file that included hundreds of sheets of formulas was cumbersome, putting a huge strain on IT Finance analysts. And there was no formal cost allocation methodology, which meant IT Finance was often challenged about the accuracy of their chargeback numbers.
The IT Finance team was often overwhelmed. It took two people nearly three solid weeks of work every year to create a chargeback report. They spent most of their time gathering data and trying to defend a cost model that wasn’t based on a consistent, logical framework, leaving almost no time for their other detailed analysis work. This inconsistency left questions in everyone’s mind as to the quality of the IT cost data, making it hard for the CDIO and others to use the information in making key decisions.
“Our CDIO recognized that the business didn’t understand what we were telling them,” says Anna Grevsjö, GIS Business Controller at Husqvarna Group. “We needed to modernize our processes and do a better job of allocating IT costs and explaining them to the business.”
The solution
Husqvarna Group implemented IBM Apptio Costing & Planning to address these challenges. According to Grevsjö, IBM Apptio was selected over other solutions because it is highly integrated with Technology Business Management (TBM) best practices and flexible enough to fit their business. Other solutions they considered, she says, are more like a toolbox, an assortment of tools with no clear link to the TBM methodology.
The results
Increased IT cost transparency
IBM Apptio enables Husqvarna Group’s IT Finance team to charge back cost centers and divisions using high-quality, accurate, and defensible cost data.
Through integration with ServiceNow, SAP, and other systems, data-loading has been automated, eliminating the risk of human errors that were common when working with large, complex spreadsheets. Cost data is then processed by IBM Apptio using allocation models aligned with the TBM taxonomy for IT cost pools and then further refined into IT resources and services, customized according to Husqvarna Group’s operations.
The structured framework and automated processes provide Husqvarna Group with a cost model that is transparent, accurate, and easy to understand and defend, giving leaders across the organization a clear view of what they are spending on IT.
86% increase in chargeback productivity
According to Grevsjö, creating an IT chargeback for Husqvarna Group with their old Excel-based process took about three solid weeks of work for two people, and still left business leaders confused and questioning the numbers.
By automating much of the process and adopting an industry-standard framework for IT costs, Husqvarna Group can now create a chargeback in about three days—an 86% improvement. This efficiency allows analysts to spend more time analyzing data, working with cost center owners, optimizing IT operations, and investing in innovation and digital transformation.
“Without IBM Apptio, IT spend would be out of control,” Grevsjö says. “To do what we do now without IBM Apptio, we would have to hire 10 new controllers to do all this work manually. And even then, I’m not sure it would be possible.”
Common language for IT costs
One of the biggest challenges Husqvarna Group faced using Excel was translating cost data into a language business leaders understood. This led to communication problems and distrust in the numbers. And it prevented leaders from making informed decisions.
“Before IBM Apptio, we spent most of our time having formula discussions with leaders rather than value conversations,” Grevsjö says. “The business wanted to know what they were paying for, scrutinizing the formulas in Excel and questioning our methodology.”
Adopting IBM Apptio enabled the company to overcome this challenge. IBM Apptio is built on a framework that aligns with industry-standard IT cost categories, which are straightforward and easy to understand. This gives Husqvarna Group a common language for IT costs that makes sense to Finance and Business units, as well as IT.
24/7 self-service capability
Under Husqvarna Group’s old process, service owners and other cost center leaders were dependent on controllers to get financial data regarding their budgets and costs. If they wanted to see how their area was performing against plan, a controller would have to pull data from SAP and other systems and assemble an Excel file for them to review. This was at least three days of work per month and leaders often had to wait days or longer before they could analyze current data.
With IBM Apptio, every user can view cost, budget, and forecast data for their area anytime they want. As soon as financial data is posted, data in IBM Apptio is refreshed using APIs. Users can pull reports, customize views, and analyze near-real time data in a myriad of ways through IBM Apptio’s modern self-service features.
“The fact is, we have grown so much, we don’t have enough controllers to manually produce a spreadsheet for every individual who needs one,” Grevsjö says. “But IBM Apptio is self-service, so they can log in, analyze, and understand their data on their own.”
Better insight for decision making
Grevsjö says that prior to IBM Apptio the IT Finance team struggled to deliver insight about IT costs and investments that company leaders could use to make decisions. “Excel is not good for presentations,” she says.
IBM Apptio enables Grevsjö to allocate costs and create budgets according to service categories, which is something she couldn’t do using Excel. This is providing a level of information the CDIO never had before.
“Before IBM Apptio, we presented our budget by cost centers,” she says. “But our CDIO doesn’t really care about that. He wants to know what we are spending money on. With IBM Apptio, we are using service mapping to present our budget to the CDIO on up to the CEO by services, which is very useful for them as they make strategic decisions and plans. Information is presented in a much more professional way now, and our leaders trust the data.”
Advice to others
Through automation, digitization, and integration, Husqvarna Group has turned a once arduous, time-consuming, confusing process into a simplified and streamlined approach to ITFM that is delivering business value to the company.
For other companies considering a journey similar to Husqvarna Group’s, Grevsjö has this advice: “Take advantage of the integration and automation features as much as you can. It saves so much time, improves accuracy, and is easy to defend. And make sure you have someone on your team who can communicate or market what you are doing to key stakeholders. The more they see and understand what it does for them, the more they love it.”
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