60% of Business Executives Don’t Have Visibility Into IT Budgets; Lack of Transparency Severely Impacts Ability to Intelligently Reduce IT Costs
Bellevue, Wash., – December 16, 2008 – Apptio, the leader in on-demand IT Cost Optimization solutions, recently completed a survey that demonstrates how a lack of cost transparency in corporate IT departments is making it difficult for CIOs and other business executives to understand the ROI of technology investments. As a result, IT is not well aligned with the business units, making it difficult for them to accurately make IT cost cuts that compliment business priorities. The third-party survey of business leaders at companies larger than 5,000 employees, revealed several insights about how the value of IT spend is calculated and communicated and the universal need for more visibility between departments.
In today’s financial climate, CIOs are under increasing pressure to reduce costs, increase efficiency and demonstrate the value of their IT investments back to the business and shareholders. Nearly 1/3 of respondents felt that their companies were not fully maximizing investments in IT; this figure climbs to 35% in companies with revenues of $500 million or more. Part of this problem may be linked to fact that most enterprises don’t have a system or reporting mechanism in place to track overall IT spend and determine the ROI on each individual investment. Nearly 60% of the respondents admitted to being only moderately confident in their understanding of how IT dollars are being spent.
Many IT organizations are struggling to align themselves with the business and become more proactive. Even with the end of 2008 only a few days away, 41% of respondents said that IT has yet to outline its plans, initiatives and primary goals for 2009. In most cases, the funds have been requested and allocated but how the money will be spent and the value the enterprise as a whole will receive has yet to be illustrated. A notion compounded by the fact that 47% of respondents admitted that their enterprises only review and analyze total IT budgets once or twice a year, making it increasingly difficult to pinpoint underperforming areas and reallocate funds across the enterprise.
Even with the tremendous cost pressure that exists today for IT, many businesses are continuing to invest in new technologies. In fact, 67% of business executives expect their total IT spend to either mirror 2008 or increase in 2009. Only 20% are forecasting a decrease in spending. These increased levels of investment will only exacerbate the reporting, communication and cost cutting / budget allocation challenges that result without transparency into IT costs.
All of this data leads to one conclusion: CIOs need a solution to help them gain more visibility into overall IT spend and a set of real-time metrics to determine and communicate the value that IT drives for the enterprise as a whole. This would afford them the opportunity to review and manage IT budgets in real time at an extremely granular level, resulting in more informed, more efficient asset and department performance reviews and reporting. When the business leaders were asked about the perceived benefits of such a solution, 73% said that having greater visibility into IT would be valuable for their business.
“The criticality of IT and the CIO to business success has increased dramatically, but the capability of the tools to manage, report and communicate the value of IT have not,” said Sunny Gupta, CEO and founder of Apptio. “Optimizing the Cost of IT is an absolute necessity in today’s business climate and was the reason we founded Apptio. Our solution gives CIOs the insight they need to take intelligent actions to reduce costs and clearly communicate the value of IT to the business.”
Apptio is driving a revolution in IT cost efficiency by helping IT departments optimize on cost and communicate with business managers to improve the value of IT services. Apptio’s IT Cost Optimization solution enables IT to track all cost drivers and performance metrics within IT, calculate a total cost for IT service, reduce cost through deeper analysis of cost drivers, drive better business decision through scenario modeling and cost benchmarking and better communicate the value of IT through a shared “Bill of IT” reports. Apptio is driving a revolution in IT Performance Management and IT Demand Management conversations.
To get more information on Apptio’s IT Cost Optimization solution please download the solution whitepaper.
Apptio is the leading independent provider of on-demand Technology Business Management (TBM) solutions for managing the business of IT. Apptio enables IT leaders to manage the cost, quality and value of IT Services by providing deep visibility into the total cost of IT services, communicating the value of IT to the business through an interactive Bill of IT™, and strategically aligning the planning, budgeting and forecasting processes. Apptio’s TBM solutions play a critical role in helping companies understand and drive chargeback, virtualization, cloud and other key technology initiatives. Global enterprise customers such as Bank of America, Boeing, JPMorgan Chase, Microsoft, St. Luke’s Health System, and Swiss Re rely on Apptio® products and services to reduce costs and align IT with business priorities. For more information, visit the Apptio website or the Apptio blog.