How to Implement IT Showback or Chargeback Like a Pro
Focus on Value
Enable Transparency 3
Provide a Positive Customer Experience 4
Executive Summary Key Outcomes: Demonstrate the Value of IT (IT spend is not clearly aligned with business outcomes) • Drive Cost Optimization (the business consumes IT like it's free) • Enable Informed Decision-Making (Inaccurate or missing data drives uninformed, emotional • decisions) After this session, you’ll be able to: Understand and communicate the value of IT transparency • Assemble the right people, tools, and processes for successful showback or chargeback • Limit complexity in your showback or chargeback processes • Provide an ideal customer experience to cultivate trust and shared accountability • Utilize transparency to become a trusted advisor to the business • Elevate IT. Ignite Possibility. 5
Transparency + Insight = Your Value • Creating transparency and providing visibility • Translating and delivering insight • Continually teach and educate stakeholders • Value = Stakeholders make informed decisions = Optimized costs Elevate IT. Ignite Possibility. 6
Common Challenges & Business Outcomes Elevate IT. Ignite Possibility. 7
Common Challenges & Initiatives • Challenges – Common challenges for IT & IT Finance • Initiatives – Business & IT initiatives supported by ITFM Challenges Initiatives • Uncontrolled run costs – need to shift to innovation • Rising IT costs – not clearly aligned with business value • Cost Optimization • Unplanned, unbudgeted spend • Cost Transparency • IT has a poor reputation with the business • Digital Transformation • Perpetual reactive mode • Service Transformation • Endless questions about costs • Hybrid IT • Moving too slowly • Manually translating between Finance & IT • Multi-Cloud • Inaccurate data • DevOps • Uninformed, emotional decisions • Agile • Time wasted on ad-hoc analysis • Benchmarking • Business consumes IT like it's free • Comparisons to cloud vendors • ITFM Process Automation • Pressure to do more with less
Start with Desired Business Outcomes Cost Transparency • Elevate IT by partnering with the business • Demonstrate IT value in a common language the business understands • Optimize costs by improving management of IT usage and consumption • Enable informed decision-making by delivering tailored insights • Shift run-to-change by redirecting optimization savings toward future digital business innovation • Provide a deep understanding of infrastructure usage and costs • Get deeper visibility into consolidated cloud costs (inside and outside IT) • Better align resources to business priorities • Enable application rationalization • Promote shared accountability of IT costs Elevate IT. Ignite Possibility. 9
A Value Focused Approach 10 Elevate IT. Ignite Possibility.
How IT Dollars Are Spent: Optimize & Maximize Cap spend is generally focused on grow and transform the (GTB) activities, so the ITFM focus is to: Maximize Revenue Impact Projects Cap (20-30%) Risk Mitigation Projects Maximize (Cap) Cap to Opex IT Budget Transition Optimize (Op) Optimization Opex (70-80%) Opex spend is generally focused on run the business (RTB) activities, so the ITFM focus is to: Optimize “Most CEOs and CFOs do not understand IT operating expenses and believe, on average, that 20% of the IT operating budget is wasted money” – Gartner 2018 Elevate IT. Ignite Possibility. 11
Visibility Into Key Spend Viewpoints BUSINESS CAPABILITIES GL ACCOUNTS SERVICES CONSUMERS & APPLICATIONS • Consumers (100%) • Apps grouped and allocated • GL & AP Data • Compute, Servers, Storage, • Application or End User to business services AD, Desktops, Laptops, etc. • Cost Center / Account • Business Service Metrics Elevate IT. Ignite Possibility.
Multi-Dimensional Views of Transparency View Services Consumer Application Business Capability Allocates service costs to consumers Allocates service costs to Total Application costs are grouped and Allocates GL costs to IT Service based on usage Applications based on usage allocated to Business Services Example Compute power • End User On premises • • Servers Marketing • • Business Partner Hosting Applications • • Storage Sales • • Cost Center Cloud Hosting • • Application Development Billing • • Department Storage • • Desktop/Laptop • Answers Which business partners • How much are we spending to deliver • consume IT resources? (% and $) each service? Why is my IT bill going up? What is the total cost of my • • What items and services are in my IT • What do I get for my IT applications? What are the technology costs • • bill? expenditure? How much are we spending associated with enabling my Business • What are our unit costs and how do • internally vs hosted? How do my expenses compare to Capabilities ? • they compare? other business partners? What costs and services are included in • How/where can I impact my • the unit rate? budget and corporate profits? Stakeholder IT Executives IT IT Executives Business Partners Executives Executives CIO IT CIO CIO Business Partners The Value/Payoff Understand the cost of services and Insight into which business • • (the data provided components partners benefit from IT Business Service Metrics • Application Rationalization • Align new investments more directly to Understand and drive down unit rates Transparent view of consumption • • • enables): exercises Benchmark against third-parties and rates business functions • peers Helps show value • Elevate IT. Ignite Possibility. 13
Stakeholder Value Matrix Business Stakeholder Planning Services View Consumer View Application TCO Capabilities View • Drive down unit rates • Aligns IT spend to CIO • Demonstrates value of IT business value • Benchmarking • Faster, more detailed analysis CFO • Better control • Aligns IT spend to • Understands value of IT business value Business Leader • Gains control of consumption • Drive down unit rates Service Owner • Benchmarking Application • Application rationalization Owner Elevate IT. Ignite Possibility. 14
Keys to Success Elevate IT. Ignite Possibility. 15
Keys to Success Define Your Mission Drive Business Outcomes • Align with CIO Initiatives • Engage ITFM Stakeholders CIO • CFO • Service/Product Owners • Application Owners • Business Leaders • Corporate FP&A • Provide Insights • Give relevant, actionable analysis and data • Go beyond just providing transparency – provide insights and context as well Elevate IT. Ignite Possibility.
Build the Foundation Elevate IT. Ignite Possibility. 17
Build the Foundation • Executive Support • Quality Staff Analysts + • Critical thinkers • Data and process expertise • Advanced communication skills • Engage leadership (in the business & IT) • Be analysts and educators… • • Quality processes, policies, tools, and data Elevate IT. Ignite Possibility.
Modernize IT Finance Elevate IT. Ignite Possibility.
How to Modernize IT Financial Management Analyze 4 Analyze Results Leverage analytics, dashboards, and detail content to improve value and enable decision making. Plan Measure IT Finance 3 1 Measure, Allocate, Optimize Establish a Strong IT Gain detail transparency into Planning Process how all IT services are being Know spend changes in consumed by applications, Automate real-time . Align spend to projects, and end users. business value and initiatives. Optimize 2 Automate ITFM Processes Transition IT Finance team from processing data to analyzing results . Elevate IT. Ignite Possibility.
Measuring and Communicating Success Measuring success – Stakeholder feedback and use cases • Communicating success – Promote your program • Elevate IT. Ignite Possibility. 21
3 Phases of Transparency Enabled Challenge Black Hole Decision- Phase Making Challenge Phase: • Educate – Be prepared to educate your consumer on the insights the data provides. • Defend - Be prepared to defend your model – this will require accuracy & detail. Elevate IT. Ignite Possibility.
Answer Questions & Gain Trust • Superior level of detail • Thorough answers • Rapid response Elevate IT. Ignite Possibility.
Building & Managing Cost Models 24 Elevate IT. Ignite Possibility.
Key Capabilities • Create multi-dimensional views • Include budget, actuals, and forecast • Trace forward and backward Elevate IT. Ignite Possibility.
Key Challenges Iterate – Limit initial scope: define and refine, • address data gaps over time Limit Complexity • Service Catalog Size – Cost & measure • Avoid Precision Traps • “Directionally Correct” • Elevate IT. Ignite Possibility. 26
Tiered & Layered Model Elevate IT. Ignite Possibility. 27
Recommend
More recommend
