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“We have a very detailed level of information in Apptio. We can view the purchase order, the invoice line, and so on and really drill down and explain costs and do proper simulations. And this is integrated in the tool because of the direct links to Oracle and other systems.”
With IT making up more than half of the company’s operating expenses, a leading global provider of Financial Market Infrastructure (FMI) services needed a better solution for IT planning to ensure the organization was getting the most value possible from its IT spend. Implementing IBM Apptio Planning enabled them to:
The organization has a complex IT landscape, with multiple data centers, diverse platforms, networks, and applications supporting the business. Continuous investment in new application development and infrastructure projects is critical to the company’s operation. In fact, 50% of employees work in IT, and over half of the company’s overall budget is allotted to IT spend.
With so much of the company’s operating costs tied to IT spend, accurately budgeting and forecasting this spend is critical for ongoing success of the business. The company’s planning process, however, was challenging, making it much harder than necessary to effectively budget spend for people, vendor services, applications, and infrastructure, as well as balance the distribution of dollars between Run-the-Business (RTB) and Change-the-Business (CTB) projects.
“We had two divisions in IT, managed by two different teams using two different processes and tools,” said the Head of TBM Data Reporting and Tooling at the company. “The process was completely decentralized, with a lot of Excel spreadsheets and difficult-to-manage formulas everywhere.”
The decentralized, spreadsheet-heavy approach often led to inconsistencies and limited visibility across teams, creating delays in decision-making and misalignment. The company’s technology leaders knew that in order to implement best practices for IT planning, they needed better tools and processes.
The search for a better planning system led the company, already a user of IBM Apptio Costing, to implement IBM Apptio Planning at the end of 2018. They chose Apptio Planning for its seamless integration with their existing systems, enabling a unified view of IT costs and empowering a transparent, structured budgeting process.
The company’s planning process is made up of four streams. In the first stream, the corporate strategy is defined, driven by the needs of the business. From there, the corporate strategy cascades down into multi-year objectives for the different entities within the organization, including IT. The third stream is where the IT strategy and corporate objectives are aligned, based on the roadmap created by the Enterprise Architecture team. Finally, the fourth stream is where the IT budget is forecasted and managed.
The organization follows a traditional budget process. Budgets are submitted annually. Cost projections are produced and distributed to key leaders every month. Quarterly reviews are held to evaluate variances and to adjust the forecast.
The IT budget is broken down into division, department, and cost center and segmented into RTB and CTB costs. According to the customer, Apptio Planning was a natural fit for the way the company wanted to manage spend. “It was an easy structure to implement in the tool,” he said.
Apptio’s intuitive and easy-to-use solution enables company leaders to view spend in multiple ways. They can evaluate capacity and determine if more resources are needed for key initiatives. They can see where budget dollars are allotted (for the current year and for the multi-year portfolio), whether those funds are for typical support costs or for new innovations that will improve the business, and they can use that insight to make the right budget adjustments, if necessary.
Another benefit of the Apptio solutions has been accountability. Under the company’s previous process, there was one finance person in IT who did the budget for everyone. This person was responsible for consolidating the various spreadsheets from different parts of the business into one final budget for submission, which was a time-consuming, tedious process handling multiple spreadsheets, reconciling vast amounts of data, and coordinating with multiple people, and often created conflict over ownership of the figures.
To address this issue, the company adjusted its process. “We decentralized part of the finance function within IT,” said the IT Budget Process Owner at the company. “We now have a finance person who answers directly to the division head. This has created an ownership of the figures in each division, eliminating conflict, and gives us budget estimates that better reflect what the division is really aiming to do.”
Apptio IT Financial Management solutions have been a key part of enabling this process change. Actual spend figures in Apptio are refreshed every month from the company’s Oracle system, and users can access Apptio anytime they want to view cost data. With Apptio Planning, the company’s IT and finance teams now have a more collaborative approach to budgeting, reducing the stress of manual reporting and fostering a stronger sense of ownership and accountability within divisions.
“We monthly manage 35,000 lines of actuals, 50,000 lines of fixed assets, around 7,000 lines of contract and 7,000 lines for labor,” said the customer. “So, we have a lot of detail. We know the who, what, when, and cost, and it’s all centralized in Apptio Planning, giving us a single source of truth.”
One of the key features of Apptio that has helped establish it as the source of truth has been the solution’s ability to integrate with other systems. The company’s Apptio Planning implementation has integration with Oracle Business Suite and IBM Apptio Costing. This enables the organization to load reference data on all IT cost pools (as specified in Apptio Costing) and update actuals and FTE figures from the company’s Oracle finance system, giving company leaders a clear picture of assets and costs in meaningful categories for IT planning.
The company has also created an out-link to ServiceNow. This enables Apptio to provide labor supply data to ServiceNow for use in capacity planning.
Tight integration with a wide landscape of tools has provided company leaders with better insight for analysis, decision-making, and forecasting. “We have a very detailed level of information in Apptio,” the customer said. “We can view the purchase order, the invoice line, and so on and really drill down and explain costs and do proper simulations. And this is integrated in the tool because of the direct links to Oracle and other systems.”
Apptio has helped the company implement best practices for IT planning. And the customer plans to do more in the future. “I’d like to see us implement full integrated planning,” the customer said, “where we can make a change—say increase the number of users—and automatically see how it will affect the entire IT organization, how many people you will need on projects, how it will impact security, how it will impact infrastructure, and so on.”
The company’s journey with IBM Apptio has not only transformed its IT planning but has set a standard for financial transparency and accountability across the organization. With Apptio, the company continues to embrace best practices for ITFM, enabling the organization to drive more value from IT and invest in the applications and projects that truly deliver innovation.
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