Sheetz Increases Forecasting Accuracy While Reducing IT Planning Cycles by 85%

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“Now, if they have a question about the budget, they just go into Apptio, and everything they need is there.”

Apptio helps the company achieve IT cost transparency, cut down on data entry errors, reduce IT planning time, and increase forecasting accuracy.

Sheetz is a convenience store chain headquartered in Altoona, Pennsylvania. Founded in 1952 by Bob Sheetz, the company remains a family-owned operation, offering a unique combination of three services at each of its stores: a convenience store, a quick-service restaurant, and a fuel stop. Today, the company has 600 stores operating in six states in the U.S. and more than 18,000 employees.

Serving customers well and providing an experience that makes them want to return has been a hallmark at Sheetz since the beginning. The company is famous for leveraging technology to provide exceptional customer service, such as made-to-order (MTO) electronic kiosks to order fresh, custom-made food and beverages and advanced online ordering through its app and website. With these offerings, customers can get what they want fast and get back on the road.

IT consolidation required cost transparency

Prior to 2015, IT was decentralized at Sheetz. Each division operated independently of the others and separately from corporate IT. Consequently, division leaders made their own hiring and purchasing decisions and were free to implement any software they wanted without oversight from corporate. “IT administration did not exist as an entity,” said Eric Foose, director of IT support services at Sheetz.

Seeking the benefits of a corporate IT strategy, Sheetz decided to consolidate IT under one large corporate IT group and to implement a formal administration function. This would enable them to standardize and optimize IT costs across the company and set them up to partner more deeply with the business on IT costs through implementation of a showback and chargeback process. However, these goals were out of reach for them. “We really had no visibility,” said Foose. “Our costs were like a black hole.”

To address this problem, Sheetz purchased Apptio Cost Transparency (now sold as part of ApptioOne) and took a focused approach to their implementation with a primary goal of showback. “Our single goal in the first phase was to get showback right at the business-unit level,” Foose said. “It needed to be accurate and consistent, and the business needed to buy into it.”

This enabled Sheetz to track financial and operational data like technology, labor, consulting spend, infrastructure costs, software licensing, and IT overhead per business unit, which was the information the company needed to complete its IT consolidation.

Uncovering new insights

Cost transparency not only aided the company’s consolidation project but also helped the leadership team learn more about the organization’s technology investments. According to Foose, the showback data from Apptio enabled them to distinguish between spend associated with ongoing operations and those funds allocated to growth initiatives. “Eighty percent of our annual spend was being used to keep the lights on,” he said. “That was a real eye-opener for most of our folks.”

For the first time, business unit leaders were seeing how much they were spending of the company’s IT budget. And everyone else in the company was seeing it, too. As a result, leaders were much more mindful of their responsibility to use the company’s financial resources wisely. “Showback raised a lot of eyebrows,” Foose said. “People started paying more attention to their IT expenses.”

This new insight helped create a more acute sense of accountability, Foose said, and that motivated business unit leaders to better manage their technology resources and to think hard about their business cases before requesting funds for new initiatives.

Remaking the budgeting and forecasting process

Once cost transparency was firmly established and operational, the Sheetz team turned its attention toward improving the budgeting and forecasting process. For years the company had relied on spreadsheets to produce its annual IT budget, and the process had become complex, labor-intensive, and error-prone. Preparing the 2020 budget, according to Foose, involved manipulating 87 different spreadsheets and took three months to complete.

“Each division had multiple spreadsheets,” Foose said. “We had version-control issues. We had data entry errors. In fact, we would track $500,000 to $1 million on average just in data entry errors. We spent a lot of time and energy checking, double checking, and triple checking everything. The whole process was horrendous.”

Sheetz implemented Apptio IT Planning (now also available as part of ApptioOne) in 2021 to address the challenges. Within four months, the system was operational and providing value.

With few exceptions, all planning data now resides in Apptio. This has simplified the budgeting and forecasting process, reduced data entry errors, and increased forecasting accuracy.

“We went from 87 spreadsheets down to six,” said Foose. “The accuracy now is phenomenal. We don’t have to worry about data entry errors like we did before or if we have the wrong version. And assembly is now automatic. The data entry problems we had with combining budgets went to zero.”

One of the biggest advantages of their Apptio implementation has been the reduction in aggravation and stress over the budgeting process, according to Foose. “We used to have to check and re-check and stress out a lot over getting the budget right,” he said. “That’s all gone now.”

In addition, Foose said, Apptio has reduced the amount of time he and his team spend tracking down data problems by 75% to 85%. And the directors have been ecstatic with the new system. “Now, if they have a question about the budget, they just go into Apptio, and everything they need is there,” he said.

Looking forward to even more benefits in 2022

Sheetz has achieved much since first implementing Apptio. But, as Foose indicated, there are more advanced functions the company wants to capitalize on moving forward. In 2022, Foose and his team are focused on three exciting projects:

  • Unleashing Apptio’s full analytics potential
    “The first project is to move away from our historical showback reporting, because that was all custom, and moving toward standardized out-of-the-box reporting functionality from Apptio,” Foose said. “I’m really excited about getting to the place where the product can be used at its full potential.”
  • Monthly reviews with directors
    “The second project is we’re beginning a monthly review with each of the directors and the IT admin group,” Foose said. “We will be sitting with each of the directors and actively reviewing their finances in Apptio, looking at both planning and transparency to begin to teach them how to get more advanced with what the tool has to offer.”
  • Project costing and variance analysis
    “The third thing we’re doing this year is looking at where we want to go next with project spend,” said Foose. “We’re looking at the advanced functionality that ApptioOne has to offer on project costing and tracking relative to our planned spend in these investments.”

According to Foose, with executive support, they plan to hit the accelerator hard in 2022. The Sheetz team sees no end in sight with what they can achieve with Apptio and IT financial management.

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