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Solution brief

Why IT Needs Its Own Financial Planning


& Analysis Solution
Spreadsheets were never meant to handle the complexities of IT financials.

Your current approach is broken Benefits of a


Tools that are designed for corporate financial management fail to adequately purpose-built solution
manage the complexity of an IT budget. Most organizations struggle with using a
mix of Enterprise Resource Planning (ERP) and Corporate Performance Management Ensure that every dollar of your IT budget
(CPM) tools, woven together by a bird’s nest of spreadsheets and business intelligence is spent on the highest priority items for
(BI) tools. your business:
§§ Eliminate costly manual work
While CPM solutions serve as the backbone for your corporate planning, they lack
§§ Maximize return on IT spend
IT context—which you can only bypass with high-touch customizations that take
considerable time to implement. Who has that time to wait? §§ Drive better business results
§§ Reduce business risk
Spreadsheets are excellent tools to flexibly manipulate any kind of data—but they
§§ Raise IT’s brand
aren’t purpose-built for IT financial management. When ITFM is the goal, spreadsheets
just don’t cut it.

IT budgets and shared technology services are too complex to be managed this way.
Other functions like Manufacturing, Sales, and HR all use purpose-built solutions
and are not expected to manage themselves with just spreadsheets. IT shouldn’t be
expected to either.

“ There’s no reason that the people who are running the largest budget

in the entire organization—IT—shouldn’t have transparency into
those financials.
Luke Massey,
VP of IT,
CoBank
Why IT Needs its Own Financial Planning and Analysis Solution

CPM, ERP, and BI systems require


time-consuming translation
CPM and ERP systems are corporate financial tools and lack the IT context that cost
center owners need to plan for spend: areas like labor, hardware, software, and vendors. It’s time for change
CPM still relies on spreadsheets to conform IT budgets into a CPM framework—often with “Initially, we invested in Apptio for the huge
no clear alignment between business objectives and IT initiatives. time savings we knew we’d achieve. But it
BI tools are designed for general purpose reporting and not for IT-specific analysis has also changed the conversations we’re
(e.g., allocation best practices). having with the business and fostered
better, more collaborative relationships
Dedicated staff are needed to maintain BI tools and they are often in short supply with budget owners.”
and dedicated elsewhere.
Stephanie Rendon,
Director of Finance,

Spreadsheets aren’t designed for IT


CHRISTUS Health

financial management “When you can walk in and show the CFO
where your costs are rising and what the
Finance-to-IT mappings require considerable manual labor in spreadsheets and quickly levers are, he’s better informed to
become unwieldy to manage. make decisions.”

Data validation goes out the window once source-system data is entered into a spreadsheet. John Dermody,
VP of Business Management,
Lack of version control and a single source of truth to enter budgets perpetuates errors and Caesar’s Entertainment
results in extensive manual verifications.
Poor collaboration with multiple workbooks circulated via email leads to diminished “CPM tools are built for corporate finance.
accountability by business stakeholders. We needed a tool for the way we manage
our business and run our IT budget. With

Ultimately… Apptio we can track new projects or


initiatives in ways we have never budgeted
Time and resources are squandered as a result of an intensive manual effort. before, with individual line items, vendors,
and services all spelled out.”
Credibility is lost without agility to respond to changing priorities quickly enough.
CIO,
Key initiatives go unfunded due to lack of regular visibility into variances and proactive $2B media corporation
management by individual cost center owners.

Case study: CPM doesn’t work for IT


One of the largest health care providers in the Northeast was grappling with planning their nearly half a billion dollar budget in spreadsheets.

They tried customizing Hyperion PBCS to meet the needs of IT. Apptio provided better data warehousing and the flexibility
to customize without engaging considerable support.
“Oracle is great and we use quite a few of their products, but
we were not pleased with their rigidity when planning for IT. “Apptio is very user friendly, very similar to Excel-based
We pushed it to its brink.” formulas, which is a key advantage. We can do all our edit
checks in Apptio. Implementing Apptio has resulted in better,
Limitations of their CPM: cleaner data and our confidence in that data is
§§ No data warehouse significantly higher.”
§§ An inability to accomodate larger data sets Director of IT Financial Operations
§§ Lack of easily customizable user interfaces and dashboards
§§ Not easy to use without a system administrator
and outside consultant

2 © 2019 Apptio, Inc. All rights reserved. Apptio.com


Why IT Needs its Own Financial Planning and Analysis Solution

Apptio is uniquely positioned for IT


Apptio offers a purpose-built solution for IT financial planning and analysis that allows for collaborative budgeting, forecasting, variance analysis,
and multi-year planning. Apptio connects to existing ERP solutions such as SAP Financials, Oracle Financials, and NetSuite. Apptio’s powerful IT
cost modeling engine organizes disparate data and applies industry-standard cost allocation rules providing comprehensive views of
fully-burdened costs in terms the business understands—labor, software, hardware, assets, and vendors.

This translation empowers IT finance leaders to make informed decisions faster, reduce risk to the business, spend smarter, and create confidence
that every dollar of the IT budget is spent on the highest priority items for your business.

Figure 1: Corporate planning is focused on the general ledger Figure 2: IT planning with Apptio focuses on technology,
business services, and investment views

3 © 2019 Apptio, Inc. All rights reserved. Apptio.com


Why IT Needs its Own Financial Planning and Analysis Solution

Apptio elevates your analysis


of IT spend
Apptio extends beyond just eliminating the pain of running the process of IT budgeting
and forecasting in spreadsheets. It delivers roll-up views of your IT budgets and forecasts $14M in savings recovered
in the form of customizable, dynamic, and actionable dashboards for use in making
and communicating IT spend decisions. These dashboards surface proactive insights Industry: Healthcare
into areas where you can cut uncommitted spend and free up dollars. Examples include IT Spend: $330M
opportunities to push off planned hires or purchases and insights into upcoming contract Employees: 47,000
renewals or extensions. And with additional in-depth reporting and analytics around your
A healthcare organization in Texas was
labor headcount, asset and overall vendor spend, more opportunities to optimize IT spend facing an inefficient 4 month annual
surface, such as the ability to adjust your external vs. internal labor mix in certain areas, planning process, bogging IT Finance
shift spend tied up in unused purchase orders and the chance to drive more favorable down with running a tedious process rather
than freeing them up to conduct more
contract terms upon renewal. value-driven analysis for the business.

With Apptio, the organization automated


the budget process, reducing the annual
planning time to under 4 weeks. They
started forecasting twice a month and
uncovered $14M in slush funds within their
contracted vendor spend. These are dollars
that can now be used to fund a critical
organizational initiative to lower the cost of
patient healthcare.

“When you can walk in and show the CFO


where your costs are rising and what the
levers are, he’s better informed to make
decisions.”

John Dermody,
VP of Business Management,
Caesar’s Entertainment

Figure 3 : Apptio’s executive dashboards provide overviews of IT spend with key KPIs
and trend comparisons

Figure 4 : Apptio surfaces insights into areas where IT spend can be trimmed
or reallocated

4 © 2019 Apptio, Inc. All rights reserved. Apptio.com


Why IT Needs its Own Financial Planning and Analysis Solution

Your ledger-based view is not enough


Gartner contends that an asset/GL-expense-based view of IT finances is not enough for a successful IT organization.
Four views are imperative to both maximize and demonstrate the value delivered by IT.

Four must-have views of IT finance


Asset/GL Technology Business services Investment

§§ People §§ Mainframe §§ Business applications §§ Run/Grow/Transform


§§ Services §§ Servers §§ Back office applications or
§§ Hardware §§ Storage §§ End-user services §§ CapEx vs. OpEx
§§ Software §§ End user §§ Collaboration services or
§§ Facilities §§ Service desk §§ Application services §§ Run the business (RTB)
vs. Change the business
§§ Other §§ Network §§ Hosting services
(CTB)
§§ App development, etc. §§ Integration services

Successful IT financial practices enable at least four views

CIOs Must Master Four Views of Spend to “Otherwise, CIOs run the risk of not truly demonstrating to the key stakeholders that
Manage IT Finances, Gartner, April 23, 2019 they understand the ‘business of IT.’ The reliance on a single view of IT finance is a strong
Source: Gartner indicator that IT is viewed as a utility provider that could be too expensive and has limited
understanding of what the business needs to succeed.”

Apptio provides you with automated views into all four aspects
of managing your technology spend.
While your ERP and CPM are limited to a GL perspective, through the power of Apptio’s cost modeling engine you can analyze technology costs
by domains and towers, platforms, systems, and software. Apptio provides exclusive proprietary benchmarking of this spend to better manage
the total cost of ownership of each domain. With this robust and comprehensive cost model built out to applications and services, the linkage
between IT expenses and business services can be clearly communicated and even charged back to business leaders. Finally, Apptio completes
this imperative set of views, allowing for planning and analysis of projects and investments, providing organizations with insights into run vs.
change spend, and ultimately driving more informed decision making around the support of innovation and new initiatives.

“ It’s difficult to be business-aligned if you’re not able to show how IT spend


and IT costs are aligning with business priorities. For us, it’s about running
IT like a business and shifting IT to be very business-aligned. My team and

I wouldn’t have been able to do that without the transparency that
Apptio provides.
Eileen Baines,
CIO,
CoBank

5 © 2019 Apptio, Inc. All rights reserved. Apptio.com


Why IT Needs its Own Financial Planning and Analysis Solution

You can’t afford to wait


Every day without the right tool you are falling short.
Eliminate costly manual work by moving from complex, error-prone spreadsheets across hundreds of data sources and cost centers to one
place for managing spend. Dramatically reduce the time it takes to manage accurate budgets and forecasts.
Maximize return on IT spend with increased collaboration, accountability, and better decision-making with a single source of truth for all budget
owners. Regular forecast roll-ups, version management, scenario planning, and role-based workflows deliver continuous business alignment.
Drive better business results and fund new initiatives with proactive spend and forecast management. Ensure that every dollar in the plan is
spent on the highest impact areas.
Reduce business risk with proactive variance management, weekly or monthly forecasting, and multi-year planning for contracts and
subscriptions. Budget owners quickly revise budgets and forecasts when they are confident in the under-the-hood mechanics of the process
(e.g., version control, statuses, and multi-level approvals).
Raise IT’s brand with the business through multi-year plans, significantly reduced variances, agile budgeting and forecasting cycles, and the
ability to quickly make trade-offs and find funds for unplanned initiatives.

Apptio IT Financial Management Foundation provides you


with the best starting point for TBM. Begin by optimizing your
budgeting and forecasting process, dive into areas of spend
like vendor, labor, cloud, and make more informed spend
decisions. Apptio IT Financial Management Foundation forms the
financial layer of your cost model, upon which you can extend to
applications, services, and business units for rationalization,
and ultimately, chargeback.

Get Started
Apptio fuels digital business transformation. Technology leaders use Apptio’s machine learning to analyze and plan their
technology spend so they can invest in products that increase the speed of business and deliver innovation. By translating
raw costs, utilization, and billing data into business-centric views, IT leaders shift spending from maintenance to growth.
For more information, please visit Apptio.com/get-started.

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