To better understand the value of IT investments, First Citizens Bank needed new tools for planning and analysis. Using a combination of Apptio Cost Transparency®, Apptio Benchmarking®, and Apptio IT Planning®, the IT team was able to apply a much greater level of scrutiny to infrastructure, servers, personal computing, and other areas—greatly improving the team’s ability to identify areas of opportunity. The result is an enhanced ability to understand the true cost of growth and new opportunities to free up dollars for grow-the-business initiatives. Apptio IT Planning plays a big role in helping the team more efficiently manage run-thebusiness spend to help achieve this goal.
First Citizens Bank corporate overview
Founded in 1898 and headquartered in Raleigh, N.C., First Citizens Bank serves customers at more than 550 branches in 21 states. First Citizens Bank is a wholly owned subsidiary of First Citizens BancShares, Inc. (Nasdaq: FCNCA)
Supporting a legacy brick and mortar network of 550 branches in 20 states while balancing the demand for more efficient and effective technological capabilities presented a complex challenge for the First Citizens Bank IT team.
Yet First Citizens was able to meet this challenge by balancing budget constraints and adopting a new framework that enables greater transparency into IT spend—providing increased ability and accuracy.
“We wanted to understand not just where we were delivering technology, but where we were doing it at a fair price,” said Robert Winchester, IT Financial Consultant at First Citizens. “We wanted to evolve to an even more stable and more current technology platform. But first, we wanted to make sure we understood the value of our IT investments. That mindset is what drove us to go look for tools that would help with that.”
Winchester started looking for new cost analysis and planning solutions early in 2014, but it wasn’t until he and his team attended the Technology Business Management Conference in October of that year that they collected enough information to make a decision. “We attended the conference right in the middle of our 2015 budget cycle. In the evenings, I was working on the budget. During the day, I was talking to peers who had implemented Apptio IT Planning and they kept saying, ‘I don’t know how we ever put together a budget without using this tool.’ Suffice it to say, that was the message I took back with me.”
Tackling IT planning first
First Citizens is the largest family-controlled bank in the United States. One of the advantages First Citizens IT has over global banking organizations is that IT finance and planning are not separate functions. “Being the size we are, we’re fortunate that our team can handle both the planning and financial analytics,” reports Will Leaming Jr., IT Finance Manager. “We’re talking directly to our cost center owners about their budget, their daily expenses, their contract renewals, and so on. Because we’re that financial analyst all-in-one, we’re able to assign one person who can really understand key areas of the IT business and handle that for our group.”
While First Citizens purchased both Apptio Cost Transparency and Apptio IT Planning applications in Q4 of 2015, the team decided to implement IT Planning first. Winchester felt strongly that building the budget using an application designed for IT planning would be more efficient than uploading the existing budget and having to go back and fix it later.
Winchester also knew addressing a painful planning process would have an immediate impact on the organization—planning was something IT Finance could address quickly and tangibly. Said Winchester, “The clerical nature of pulling budgets together and understanding software contracts and how projects depreciate is an area where we can add a lot of value. We want our cost center managers to focus on keeping our systems up and running, not getting caught up in an inefficient budgeting process.”
Leaming and Winchester laid out a compelling case: by reducing the effort needed to prepare the IT budget and ensuring everything was in sync, they could spend more time analyzing the actual spend and making better decisions for the business.
“We realized we’d been performing a bottom-up budgeting process for several years, but it wasn’t effective for us. We were working the process, but we weren’t improving the process,” said Leaming.
Planning pre-Apptio required a divide-and-conquer strategy shared by four people in the department. The budget process typically ran 45 days from start to finish, and the team spent most of their time on the mechanics, making sure hundreds of spreadsheets from 50 different cost centers were rolling up properly and the numbers added up correctly. There wasn’t much time in the planning process to go back and verify the source and authenticity of the numbers.
From spreadsheet wrangling to real-time planning
Said Winchester, “Prior to Apptio IT Planning, we never had the time to go back and ask our cost center managers, ‘Does all this really make sense? Does it pull together correctly?’ We were too busy making sure everything ticked and tied at the top level.”
There were a number of other challenges with the planning process. Versioning was a huge headache for the team. “All of the spreadsheets coming from our cost centers had to be identical to be accurate, and any change had to be applied to all workbooks, plus rollups. In addition, prior and current year actuals had to be manually keyed into each spreadsheet,” said Winchester.
“Within 30 days of implementing the IT planning tool, we had it populated with all our GL information, two years of budgets, and two years of actuals. We rolled it out and had a tool in front of our end users.” Having budget data in a database instead of multiple workbooks allowed quick, real-time changes, eliminated out-of-date versions, and provided on-the-spot answers that would not have been possible before.
Today, the IT team builds their budget in Apptio IT Planning and feeds it into Apptio Cost Transparency. They load monthly actuals from their corporate financial system into Cost Transparency and feed that back into IT Planning. Because of this process improvement, the team has increased from two quarterly forecasts to four, plus monthly forecasts on depreciation and labor.
Streamlined planning leads to more accuracy and better analysis
Today, a process that used to take 45 days has become much more streamlined. In fact, the first draft of the 2017 budget was generated in a few hours.
With Apptio IT Planning, the IT team creates budgets cost center managers can review immediately. This has made a big difference in day-to-day operations, freeing up time to go back to managers and ensure they have what they need. Back and forth communications are now more focused on making sure budgets are accurate and complete. Said Winchester, “We take a minimal amount of information from managers now, and we’re still able to hand them their budget, have them review it, and make changes. We review and almost immediately, it’s back in their court.”
Today, Apptio Cost Transparency gets a feed from the HR system that assigns staff, etc. to the correct cost center. From a budget perspective, if needed, the team can correct it. “Now, no matter what, that person is going to be budgeted somewhere because they exist today,” said Winchester.
Leaming adds, “Really, the biggest impact is the time we’re now able to spend helping our senior leaders of IT better analyze the impact of future changes to their budget. And our cost center managers spend time on controllable costs like labor forecasting, software maintenance, and other discretionary parts of the budget—things they can control—instead of the non-controllable expenses like depreciation, occupancy, and things like that.”
Better analysis yields savings that fund future growth
A key advantage of an automated IT planning tool is the ability to plan down to labor, asset, and contract levels. Because First Citizens’ inputs include contract and recurring costs and allocations, fixed assets, and data about existing staff, open positions, and external labor, the IT team is able to plan at a more granular level. “From the labor perspective, we plan to the position, so we know each team and how many people they either have or plan to hire, down to the person level. We also plan down to the asset level that we input into the fixed asset system. Same for hardware and software maintenance. We plan at the contract level, down to that group. And then we budget or plan dollars per maintenance contract.”
Because analysis is down to the contract level, individual contracts can be attributed to specific areas of IT spend. “Previously, we would assume that if a contract was paid out of a cost center, 100% was attributable to that cost center,” said Leaming. “Take storage for example. If the contract was paid out of storage, then it was part of storage. Now we’re able to look at the contract and see that 80% was storage but 20% of it should be allocated to mainframe. We’re able to look at the actual expense more accurately.”
Using a combination of Apptio Cost Transparency, Apptio Benchmarking, and Apptio IT Planning, Leaming and Winchester are able to apply a much greater level of scrutiny to infrastructure, servers, personal computing, and other areas where expenses merit a deeper look—which greatly improves the team’s ability to identify areas of opportunity.
The result is an enhanced ability to understand the true cost of growth and new opportunities to free up dollars for grow-thebusiness initiatives. Apptio IT Planning plays a big role in helping the team more efficiently manage run-the-business spend to help achieve this goal. “A key corporate goal is to ‘do the right thing.’ We’ve always focused on this. Apptio IT Planning has allowed us to find new cost savings so we can still do the right thing and not run over budget,” Will Leaming Jr., IT Finance Manager.
“Our folks are able to act not as reporting agents, but as financial consultants to our senior leaders.”
— Will Leaming Jr., IT Finance Manager
An unexpected reorganization project showcases new agility and accuracy
The ability to automate planning at the labor, assets, and contracts level proved valuable during the 2017 budget cycle. When a large organizational project impacted 42 cost centers, realigning staff, maintenance contracts, fixed assets, and more with two senior leaders, the IT team was able to incorporate changes quickly. Before Apptio IT Planning, Winchester estimates resetting the budget would have taken the four-person team the better part of a week to go through all the categories to ensure cost centers were updated. Post-Apptio, the team spent three hours changing source files, updating the entire budget. “We were able to get the corrected version of the budget with these changes reflected, because Apptio gave us the time to do it.”
Not only was the IT Finance team able to minimize the impact of the reorganization, they also exceeded expectations. “Literally, the plan was due and in the past, there was no way we could have addressed something like this so quickly. You can imagine the credibility that results from being able to deliver results like these,” said Winchester.
Elevating economic stewardship
All of these improvements to the planning process accrue to an important tangible benefit: accuracy. According to Winchester, “Our forecasts are much more accurate now, because we’re spending our time on the validity of the budget.” Leaming added, “Now this year, we’re right on track.”
Leaming and his team are now able to focus on advising and educating managers, which is where they can add the most value. “We’re elevating the IT manager’s knowledge of the economics associated with how we spend the bank’s money. We’re even better stewards of the bank’s resources now than we were just a year ago. It’s very rewarding to see that change.”
Winchester added, “Within 30 days of implementing Apptio IT Planning, we were sitting in a strategic budget review with the senior management team and there were several questions asked, questions that in the past would have required 4-5 hours to research and answer. I opened Apptio on the spot and was able to answer a number of them right there. Which is amazing. We can clearly demonstrate that we understand what is in the budget.”
Leaming reflected, “It’s made our jobs much more interesting because we’re able to deliver something we know adds value. Our folks are able to act not as reporting agents but as financial consultants to our senior leaders. We enable them to focus on more important things.”