Christina Pastella on Driving Digital Transformation using TBM
Senior IT Finance Manager
Tokio Marine North America Services
Digital transformation is important to Tokio Marine because it not only enhances the value and the cost of IT, but it allows us to show our group company customers where they can pull levers to lower their costs.
We were in a position a couple of years ago where we had a really hard time explaining our costs, and for insurance companies, it's all about expense ratio. So, as the market starts to soften, and we need to find ways to contain costs, we have to be as transparent as possible. We were having a difficult time doing that before implementing TBM, but now that we have it in place it's very easy for us to show our clients exactly where they're spending their IT dollars.
Don't wait for good data because you'll wait forever
Start with the data you have because regardless of what you think is valuable, and there is value in what you have already, with TBM you're able to start with what little data you have and immediately identify gaps. Then start to build your processes, make some organizational changes or process changes, to be able to enhance that data and get even more value out of TBM going forward.
Start TBM with just one person
I am currently a one-person band when it comes to TBM at our organization. If you have at least one part-time dedicated resource, you can at least start TBM and maintain it.
Once the value of TBM becomes clear, the business case to bring on more resources and build out the TBM office becomes a lot easier. It depends on the size of your organization.
We're fairly small, so for me, it's just a one-person organization. I know larger organizations build whole teams of people once they've seen the true value of TBM.
Build organizational buy-in
I have seen through my relationships with other people in the TBM community the challenges for buy-in. I've been able to tell them that the business case is there, they just don't know it yet. Either the business is content with the way that things are being done today, or they don't know what's happening behind the scenes to generate the reporting or data that they need.
Once they start it'll become evident. It might be hard to start with the business case up front, but it’s there.
Embrace the shift
I think some of the challenges that we had were a little bit of resistance on my part. I was hesitant to take all the work and effort that I was doing behind the scenes to create these wonderful reports and hand it off to a tool. I felt that I could do it myself, but then once I realized how valuable it was easy to show everybody else in our organization how valuable it was.
We quickly got buy-in from our CFO, our CIO, out enterprise architecture team, and now we have a whole support system of people at Tokio Marine bought into TBM.
Change the conversation
We have quickly seen a lot of positive outcomes. Our conversations with group company clients used to be, “we have expense pressures; we need you to drive down the cost of IT to support our business.” While we tried to explain to them that it was truly their business that was consuming so much of IT which led to cost. They couldn't understand it and, frankly, they didn't believe us.
Through Apptio and TBM, we were able to provide good data to show them that, yes, in fact, it truly does cost this much and, yes, in fact, you are truly consuming this much.
There was a realization point when the conversation shifted. The business came to us and said, "Okay, if it's our fragmented business process, if it's our true business issues that are causing us to consume this much of IT, then please help us to understand what we can do to drive down our consumption."
Less contention. More collaboration
It became less of a defensive conversation for IT, and more of a partnering discussion with the business to see what IT could do to help them change their business process to drive down their IT consumption.
It was a real 360-degree change in the conversation on the IT and the business side.
The business has needs as far as revenue generation and keeping expense ratios down. A good technology partnership between IT and business identifies overlapping functionality and applications: overlapping spend, and fragmented business processes.
IT, as a partner, says, "What can you do to help us to fix these processes," or, "What can you do actually to enable us to drive down IT consumption.” It’s a continuous conversation between IT and the business.
Adopt TBM at the right time. Now
With Tokio Marine, it's really about business transformation. We have several clients, or group company affiliates going through extensive business transformation. They are following our recommendations to retire software and streamline technology. It's a perfect time for us to use TBM as a vehicle to help them do that, and it just so happens they've all seemed to fall in to place right around the same time. We had already gone through a very short timeframe to implement Apptio Cost Transparency. Once we got there, we started to see the data and the value that it gave us.
We were heading into the annual planning, and the planning cycle had been historically quite painful. There was a lot of back and forth between executives and the people responsible for compiling budgets.
When we saw that Apptio had IT Planning we said, "Let's do it, and let's do it right now." We finished our Apptio Cost Transparency implementation and went straight into an IT Planning which took us about three weeks, and about two days of training for our executives.
Ease pressure on a single organization
Previously, only Finance was able to provide monthly budget versus actual reports, or variance reporting and forecasting. There was a culture where executives would submit their requests to the “black box” of finance. They didn't know what happened to their numbers after that.
In previous cycles, we had six-eight months. It was three months of planning and then four-five additional months of defending that plan: trying to generate more detailed exhibits over and over until we were well into the planning year.
With Apptio IT Planning, and especially with Apptio Cost Transparency as a back-up, we were able to deliver our budget a month early, with the details that were asked for by our clients—very quickly. We were able to provide them transparently in a way that made sense with improvements year over year after that.
Previously, executives would hand their budgets over to somebody, and that would be the black box. They would never see them again and not be able to speak to how they were performing.
Now they have the accountability, and the ownership—it empowers them. They feel like they can make decisions now because they've built the budget, seen how it's been integrated, seen how it's turned out, and they see how they're performing.
They don't have to engage with finance, or any other organization, to be able to make decisions about what's happening in their specific department.
Previously, forecasts were just generated out of static finance reports. They didn't account for all the nuances of how IT spends. With Apptio IT Planning, executives can see how they're performing to date.
They can also start to do a little bit of scenario modeling and say, “if I spend a little bit more in this area, how is that going to affect my forecast, and how is it going to affect my year-end result.” That’s all owned by them without any intervention from finance.
Life before Apptio was a lot of long hours, tears, anxiety, and lots of stress.
In the year prior to adopting Apptio IT Planning, we submitted our budgets in August, and we found ourselves in April of the following year still trying to dig up more detail and more data that was virtually impossible: it took about three weeks to a month to get to one set of data that was satisfactory for our client.
Now, with the accuracy of the information that's coming in, we're able to, within a day or two, provide the same information that took us a month to provide a couple of years ago.
Provide a centralized view
We're able to see everything in one place without any data manipulation or intervention. It's been a 360 for us. We have re-reduced budget padding by seeing the overarching budget.
We're also able to drill into certain parts of the budget where before, it was a little bit more high level, general ledger-based, call center-based. There was not a lot of understanding behind what exactly made up those numbers.
With Apptio IT Planning, we're able to see the details behind each budget owner's plan and get a sense of what they're thinking. We can have those conversations, have a little bit of push back and take down some of the fat.
We had a good relationship with corporate finance before Apptio, but we spent a lot of time generating data in a manner that was consumable by finance.
With the Apptio tool, they understand a little bit more how the IT span fits into the business, they're able to translate it a little bit more on the finance side, and so, it's continued to improve the relationship. Our CFO is a big cheerleader for Apptio, and we anticipate that being in our toolset for a long time to come.