• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Caring Culture | Open Communication | Unmatched Service ...
 

Caring Culture | Open Communication | Unmatched Service ...

on

  • 488 views

 

Statistics

Views

Total Views
488
Views on SlideShare
488
Embed Views
0

Actions

Likes
0
Downloads
7
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • … until they are converted into business enablers by … allowing the USE of it for the business Where does Inventory reside on your balance sheet? Many organizations have addressed both their physical and virtual inventories through ‘financial management through procurement rules”.
  • Financial Management Objective – Define methods used to assign fiduciary responsibilities and control cost of provisioned services. The discussion points for Financial Management will focus on: What tools and methods are used to provide complete financial insight into the entire spectrum of provisioned services? What methods are used to validate vendors properly charge for contracted services? What is the philosophy and methods used to track financial ownership of provisioned services? What methods are used to assess operational efficiencies of support units? What methods and tools are used to track all the elements that contribute to the cost of business operations? What methods are used to analyze complete operational cost and related revenues from internal charge back activities?
  • Top 5 Solutions Enabled via PINNACLE Manage the lifecycle of services Improve Business Intelligence into support organizations Enforce the Integrity and Security of Data Enable better Financial Management Integrate to other Business Systems Recognizing the distinct benefits of the PINNACLE solution: Scalable integrated solution Improve Business Intelligence Self-service automation Unmatched flexibility directly from a web browser Comprehensive financial accountability for all technology services Extendable integration Business solutions to match your requirements Expert certified consulting services Laser focus on customer satisfaction A legacy of customer success stories

Caring Culture | Open Communication | Unmatched Service ... Caring Culture | Open Communication | Unmatched Service ... Presentation Transcript

  • Effective Financial Management of Communications and Technology ITPX 2010 Paul Lapan – Manager of Solutions Engineering PINNACLE Software Solutions
  • Paul Lapan PINNACLE Software Corporation Manager, Solutions Engineering Denver, Colorado 303 870-5368 [email_address]
    • Career History
    • Enterprise Software Consultant – PAETEC Software
    • Voice Systems Integration Provider – Switchview / Brooktrout
    • Voice Network Manager – ATT Wireless, GGU
    • IT/Telecom Support Manager – CompUSA
    Help | About Paul
  • About Today’s Discussion
    • Objectives of Financial Management
    • Why is this relevant today?
    • Value of Best Practice Frameworks
    • Cost Modeling
    • Business Drivers
    • Improvement of Process Throughput
    • Eliminating Bottlenecks
    • Financial Management - Business Objectives:
    • Monetary Stewardship
    • Universal service support and service delivery processes
    • Planning & execution of budgeting, accounting and charging as it relates to the entire management lifecycle
      • Procurement  Provisioning   Payment   Cost Allocation
    9 Effective Financial Management of Communications and Technology
  • Budgeting, Accounting, Chargeback Accounting (Fin) Budgeting (Mgt) Charge Back (IT/Ops) Yearly (Planning) Monthly (Managing) Agree on Expenditures Review and Manage exceptions Establish Standard Costs Monitor Cost Centers Publish price list (Service Catalogs) Monitor IT Revenue Effective Financial Management of Communications and Technology
  • Effective Financial Management of Communications and Technology
    • Changes…
    • 1. Exponential increase in Data Center located applications
    • 2. Focus on service – business value relationships
    • 3. Changing cost models from physical to virtual resources (big increase in absorbed indirect costs)
    Why is this so much more important today?
  • Effective Financial Management of Communications and Technology
    • Integration to the General Ledger
      • True chargeback to the responsible account/party
    • Integration to Accounts Payable
      • Lifecycle view of what is ‘going out the door vs. what is coming in
    • Self-Service details for customers
      • Employee Accountability
      • 3-5% Savings across the board (per Aberdeen)
    The end result – Visibility and Accountability Transparency is Accountability without the need for a formal punishment system to manage misbehavior.
  • Effective Financial Management of Communications and Technology
    • Focus on the legacy business ‘best practices’ from Telecom that many IT shops didn’t immediately adopt.
    • 1. The business is the customer of Telecom.
    • 2. Managerial Measurements - i.e. ITIL Service Level Agreements, Operational Level Agreements (Underpinning Contracts) - Benchmarking Metrics!
    How do we start and/or continue to improve what we have?
  • Effective Financial Management of Communications and Technology
    • Measuring associated costs around…
    • Service Hours
    • Service Availability
    • Reliability
    • Customer Support
    • Targets for Incident Resolution (Fix) times
    • Service Performance
    • Functionality (if appropriate)
    • Change Management Procedures
    • Security
  • Effective Financial Management of Communications and Technology
    • What other ‘best practices’ are key to focus on to establish a model for IT/Telecom?
    • Predetermined Acceptable Fixed and Variable Costs
    • Automated Process for Approvals, Payment and Dispute
    • Contract Negotiation and Increased Competition
  • Popular Best-Practice Frameworks 7 Title Definition Objective Owning Agency TEM Telecom Expense Management State of industry and assessment of TEM solution providers Gartner TEIM Telecom Expense Inventory Management A comprehensive assessment framework for selecting a TEM solutions provider Forrester Research TLM Telecom Lifecycle Management Defines key lifecycle processes to help reduce telecom operational costs Aberdeen Group TEA Telecom Environment Assessment Defines seven disciplines to effectively manage telecom operations AOTMP eTOM enhanced Telecom Operations Map Defines the interaction between key operational elements TeleManagement Forum ITIL Information Technology Infrastructure Library Comprehensive framework for all service support and service delivery OGS
  • The Reality of Best Practices
    • What they provide:
      • Common sense of proven concepts and techniques
      • A method to measure performance
      • The potential to avoid common pitfalls
      • The potential to focus on continual improvement
      • Assessment criteria
      • Standard language
    • What they are not:
      • An “absolute correct” solution
      • Procedural
      • Recommendations to buy a system or technology
    Effective Financial Management of Communications and Technology
  • Effective Financial Management of Communications and Technology
    • What value is there in these frameworks to assist us with improving our financial models?
    • Common language to describe the relationships between functional areas (in terms of associated costs)
    • Common repository (CMDB) - Configuration Management Database (service, subscriber, location)
    • Common provisioning model - Configuration Items & Related Vendor Charge Codes
    • Common Container for Costs – Service Catalog
  • Service Catalogs – Objectives
    • A service catalog is a list of services that an organization provides, often to its employees or customers.
    • Each service within the catalog typically includes:
      • A description of the service
      • Timeframes or service level agreement for fulfilling the service
      • Who is entitled to request/view the service
      • Costs
      • How to fulfill the service
    Effective Financial Management of Communications and Technology Publish  Accept Request   Review   Deploy   Review
  • Example Workflow – Network Service Delivery
    • Many parallels to Voice & Video services
    • Managed as separate business process to provide based on customer needs
    • Many opportunities exist for streamlining operations
    • Manual Billing
  • Measuring IT Cost By Customer Vendor Charges Software Personnel Hardware Real Estate Absorbed Customer B Customer C Customer A Unabsorbed Cust A B C Cust A B C Total cost of IT Services for Customer A Indirect Costs Direct Costs Cost Elements Effective Financial Management of Communications and Technology
  • Measuring Cost by Service Type Vendor Charges Software Personnel Hardware Real Estate Absorbed Indirect Costs Unabsorbed Indirect Costs Direct Costs
    • Hardware
    • Software
    • Personnel
    • Vendor
    • Charges
    • Hardware
    • Software
    • Real Estate
    • Software
    • Real Estate
    • Personnel
    • Vendor
    • Charges
    Monthly Recurring Charges Usage Charges One Time Charges Cost of the Service Cost Elements Effective Financial Management of Communications and Technology
  • Definitions
    • Cost Model: Based on calculating the costs for each Customer by service, location, or other allocation method.
    • Cost Types include:
      • Hardware
      • Software
      • People
      • Vendor Services
      • Space/Accommodations
    • Cost Elements provide detail on cost type
      • Specific asset assignment (Hardware, Software, Office Space)
      • Resource Utilization (Bandwidth, CDR, Kilowatt Hour, Number of Copies
    Effective Financial Management of Communications and Technology
  • Definitions - Cost Categories
    • Capital or Operational Costs are typically associated with the physical assets that are required to run day-to day operations such as maintenance and support staff costs.
    • Direct Costs are costs that are attributable to a single customer or such as software used for a research project or PDA’s for sales personnel.
    • Indirect Costs are costs shared on behalf of many such as shared bandwidth or technical resources.
      • Absorbed Indirect Costs can be metered. Examples include: power, network utilization, and phone calls
      • Unabsorbed Indirect Costs can not be metered. These are shared services such as a network pipe, IT Salaries, or share facilities.
    Effective Financial Management of Communications and Technology
  • Effective Financial Management of Communications and Technology
    • What are the drivers for today’s business requirements?
    • 1. Cost Justification (technology refresh)
    • 2. Cost Allocation (alignment w/business value)
    • 3. Capacity Planning (SLA, QoS)
    • 4. Cost Containment and Transparency
  • Effective Financial Management of Communications and Technology
    • What is the ‘real’ situation for many today?
    • • Managing to stay in good graces of vendor accounts.
    • • Quarterly audits and spot checking after the fact
    • • In-house and homegrown chargeback systems
    • • Flexible and equitable financial chargeback processes that use;
    • 1. Clear standard charging increments
    • 2. Easily measured sources – metered, buffered, event-based, time-based
    • 3. Well defined and easily explained cost models – not subject to interpretation
    • 4. Costs unlinked to direct business processes – not transitory
    • 5. Simple and inflexible pricing mechanisms
  • Effective Financial Management of Communications and Technology
    • How can we all improve?
    • • Increase throughput of our organizations*
    • All organizations can be measured by 3 financial things;
      • 1. Inventory
      • 2. Operating Expense
      • 3. Throughput
      • * Theory of constraints model - Dr. Eliyahu M. Goldratt -The Goal
  • Effective Financial Management of Communications and Technology
    • How can we all improve?
    • • Increase throughput of our organizations*
    • All organizations can be measured by 3 financial things;
      • 1. Inventory
      • Money invested in communications technology
      • 2. Operating Expense
      • Money spent in converting Inventory into business enablers
      • 3. Throughput
      • The SPEED of converting Inventory into business enablers
      • * Theory of constraints model - Dr. Eliyahu M. Goldratt -The Goal
  • Effective Financial Management of Communications and Technology
    • Inventory
    • • Communications inventories are not ASSETS to your organization
    • Operating Expenses
    • • All costs associated with procuring, provisioning and enabling the use of inventory by the business.
    • Throughput
    • • The speed at which Inventory items are converted to use by the business
    • Inputs & Outputs:
    • Email with attachments
    • Hardcopy & Faxes
    • Challenges:
    • No complete view
    • Manual intervention
    • Tracking status
    • Multiple copies of same Data record
    • Synchronization
    • Data Integrity
    • Manual Billing
    Example Workflow – Voice Service Delivery
  • Effective Financial Management of Communications and Technology
    • How can we all improve throughput?
    • • Eliminate bottlenecks
    • What creates bottlenecks?
      • Leadership Skill Tools
      • Resources Behavioral Change Deployment issues
      • People Process Technology
      • Financial tools that enable visibility of costs will increase your business throughput if you take care not to create a model that fails.
  • Effective Financial Management of Communications and Technology
    • Why do efforts to improve financial chargeback models often fail?
    • 1. System development and maintenance issues
    • 2. Pushback on management metrics
    • 3. Usage Misunderstood
    • 4. Changes over time - lack of flexibility
  • Financial Management – Our Observations Activity Common Assessment Observations Production Operations
    • Incomplete insight into network and mobile assets prevents optimization
    • Massive quantities of invoices prevent accurate validation
    • Inability to automatically exchange information with other enterprise systems such as:
    Reporting
    • Insufficient tools prevent adequate financial analysis
    • No correlation of procurement cost to operational use by service type or owner
    • Incomplete information to help properly forecast budget requirements
    Financial Systems Support Operations
    • Human resources (HR)
    • General ledger (GL)
    • Accounts payable (AP)
    • Billing receivables (BR)
    • Accounts receivables (AR)
    • Procurement
    • Inventory
    • Facilities
    • Service desk
    • Telephony provisioning devices
    • Network provisioning devices
    • Carrier systems
    • Utilization of network services
      • Telephony
      • Data networks
      • Printers
      • Storage
      • Power consumption
  • Cost vs. Profit Centers – Our Observations
    • IT as a Cost Center
      • Silos and stovepipes within IT
      • Subject to cost cutting initiatives
      • Lack of common processes, language, job titles, skills, and tools
      • Lack of transparency into IT costs
      • Reactive to government regulation
      • New technology – because it’s new
    • IT as a Profit Center
      • IT management sees IT as a key to winning
      • Deploys IT strategically to empower the business
      • Seeks innovative IT solutions to stay ahead of the competition
  • Transparency in IT – Our Observations
    • Business Requirements:
      • Implement sound stewardship of the monetary resources for the organization.
      • Planning & execution of budgeting, accounting and chargeback to the organization responsible for the cost.
    • Common Observations:
      • Lack of visibility
      • Challenges with Audit Compliance (Sarbanes Oxley, OMB)
      • Budgeting is based on last year +/- 3%
      • C-Level Management can not determine why/where there are cost fluctuations
      • No way to correlate cost to revenue
      • No SLA’s in place to account for high-maintenance customers
    • Integration to the General Ledger
      • True chargeback to the responsible account/party
    • Integration to Accounts Payable
      • Lifecycle view of what is ‘going out the door vs. what is coming in
    • Self-Service details for customers
      • Employee Accountability
      • 3-5% Savings across the board (per Aberdeen)
    The end result – Visibility and Accountability
  • About Today’s Discussion
    • Objectives of Financial Management
    • Why is this relevant today?
    • Value of Best Practice Frameworks
    • Cost Modeling
    • Business Drivers
    • Improvement of Process Throughput
    • Eliminating Bottlenecks
  • Questions?
  • Service Management Manage access, distribution, configuration and financial ownership Operations Management Streamline workflow, service delivery and service support operations Integration Management Automate the exchange of data with other systems Financial Management Track usage, automate invoice processing, charge back and optimization activities