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Oracle ITFM: A Better Language Between IT and Finance

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Oracle IT Financial Management (ITFM): Transparency to IT service charges; align IT projects with strategic priorities; IT spend analysis - run vs. grow vs. transform; build credibility with the business

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Oracle ITFM: A Better Language Between IT and Finance

  1. 1. Open World 2017 Lunch and Learn Oracle ITFM – A Better Language Between IT and Finance Mike Killeen – Edgewater Ranzal Nan Braun – Thavron Solutions Getting to the Answers for Improved Business Performance FocusedOraclePlatinumCloudPartner Oracle Cloud Solution Provider – EPM, BI and BD Technologies
  2. 2. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Program Agenda • Introduction to Oracle ITFM • Why is ITFM Important? • ITFM Solution Components • The Service Costing Project • Q&A 2
  3. 3. Business Analytics Solutions Provider: EPM, BI, and BD Technologies The Dual Role of the CIO Spend: IT to Sustain “Run the Business” Invest: IT as Strategic “Grow & Transform the Business” 3
  4. 4. Copyright © 2017, Oracle and/or its affiliates. All rights reserved. 4Business Analytics Solutions Provider: EPM, BI, and BD Technologies IT Chargebacks & Bill of IT Data Management & Automation IT Planning & Analysis Transparency to IT Service Charges Align IT Projects with Strategic Priorities IT Spend Analysis: Run vs. Grow vs. Transform ITFM helps IT build credibility with the Business Align IT to Run and Grow the Business Oracle IT Financial Management (ITFM) 4
  5. 5. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Program Agenda • Introduction to Oracle ITFM • Why is ITFM Important? • ITFM Solution Components • The Service Costing Project • Q&A 5
  6. 6. Business Analytics Solutions Provider: EPM, BI, and BD Technologies “You Should Run IT Like a Business…” 6
  7. 7. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Wherever they sit in the organization, the CIO is responsible for keeping IT functional and cost effective. 7
  8. 8. Business Analytics Solutions Provider: EPM, BI, and BD Technologies The Benefits Bubble Through the Organization Cost Transparency R2GT M&A App Rat Cloud WhatIf Model 8
  9. 9. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Who Cares? CIO VP Infrastructure . VP Applications . IT Finance Manager . 9
  10. 10. Business Analytics Solutions Provider: EPM, BI, and BD Technologies What’s the bottom line? • For organizations who have not yet started the journey, doing so can drive bottom line financial impact and operational improvement (~10%) • For those who already have a base model, pushing towards maturity can increase impact by as much as 2x • Provides a Service Model to change the internal IT culture and discussion as well as External (with the business) • Value Aligned for best Bottom Line impact- allows the CIO to bring value to the table 10
  11. 11. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Program Agenda • Introduction to Oracle ITFM • Why is ITFM Important? • ITFM Solution Components • The Service Costing Project • Q&A 11
  12. 12. Business Analytics Solutions Provider: EPM, BI, and BD Technologies IT Demand Plan Run/Build (Project) IT Costing & Chargebacks Oracle IT Financial Management (ITFM) Solution IT Supply Plan Labor/Equip (Resource) Service Catalogue (Run) Project Portfolio Mgmt (Build) IT Management IT FinanceLine of Business Management Operational Systems Line of Business Chargeback Reports IT Performance Management Reports Shared Master Data & Governance General Ledger SubLedgers AP, FA, PR, PO Financial Systems Cost Centers & AccountsConsumers & Services Projects & Resources Oracle IT Financial Management Solution Architecture Enterprise Planning + Profitability & Cost Management Cloud Configuration DB (Resources) Projects Oracle ERP Oracle Projects Oracle PPM DRM or EDMCS EPBCS PCMCS + ITFM Templates FDMEE or Data Mgmt FDMEE or Data Mgmt 12
  13. 13. Business Analytics Solutions Provider: EPM, BI, and BD Technologies • IT Target Setting • BAU Targets Aligned with Revenue • Initiatives Linked to Strategic Planning • IT Resource Planning • Employees & Contractors • Equipment & Software • Integrates with HR & Fixed Assets Systems • IT Project Financial Planning & Forecasting • Budgeting & ROI for new Programs & Projects • Forecasting for Indirect & Capital Projects • Integrates with PPM solutions • Monitoring & Analysis • Self-Service Reports & Ad Hoc Analysis • Provide transparency between the CIO & CFO Spotlight on IT Planning & Forecasting Improve Forecast Accuracy & Control IT Target Setting IT Resource Plan & Forecast IT Project Plan & Forecast Monitoring & Analysis 13
  14. 14. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Enterprise Planning & Budgeting Cloud The Engine Behind IT Planning & Forecasting Planning modules with best practice content for rapid deployment & auto-upgrade Configuration Wizards for Functional administration Easy-to-use Mobile, Web & Office User Interfaces WORKFORCE PROJECTSFINANCIALS CAPEX 14
  15. 15. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Spotlight on IT Service Costing & Chargebacks Modeling IT Like a Service Business • Combine Data from Multiple Sources • General Ledger/Financial Planning • Projects Ledger/Project Planning • Optional - Time Entry Hours By Project • Optional - Vendor Detail from AP & GL • Perform Cost Center Allocations • Corporate Overhead & Services to IT • IT Overhead Allocations • Intra-IT Allocations/Tech Services • Perform Project Allocations • Investment Class (Run/Build) Split • Project OH Burdening • Capitalized Labor to Projects • Combine Data from Multiple Sources • Labor Financials from Payroll or WFP • Asset Financials from Fixed Assets • Operational IT Resource Tracking Data • Service/Application Consumption Metrics • Perform Resource Costing • Labor Costing By Class/Skill/Person • Asset Costing by Class/Type/Equipment • Perform Service Costing • Flexible phasing of costs from Cost Center, Project or Resource • Calculate Unit Cost Per Service • Service Catalogue & Bill Rates • Contribution Cost Trace • Consumer Showbacks • Consumer Allocations • Cost Per Supported User • Consumer Chargebacks • Intra/Inter Company Charges • Cost Recovery Variances Model Financials & Projects Complete Costing of IT Operations IT as a Business Service Provider 15
  16. 16. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Oracle Profitability & Cost Management Cloud The Engine Behind IT Service Costing & Chargebacks Published Reports & Interactive Analytics Model Development Master Data & Data Integration Management Profitability & Cost Management Cloud Service (PCMCS) Financial Reports, Smart View, Embedded Visualizations Model Execution  No Large Initial Investment  Accessible  Always up to date Allocation Engine Embedded Intelligence Mobile Rule Transparency Integrations Dashboards & Work Areas 16
  17. 17. Business Analytics Solutions Provider: EPM, BI, and BD Technologies • Pre-Built Data Model • 14 Base Dimensions • 24 Attribute Dimensions • Pre-Populated Content • IT Chart of Account Definition (150+) • Service Catalogue (50+) • 40+ Drivers • Pre-Built Model & Reporting Content • 15+ Ratios/Metrics • Time Series & Variance Calculations • Starter Set of 40 Allocation Rules • 15+ Smart View & Fin Reports • 30+ Pre-Built Model Views for Analysis • Pre-Built Interface Specifications • 20+ Native File Formats managed by Source • Ranzal Accelerators WIP for Data Management Mapping & Automation PCM IT Costing & Chargeback (ITCC) Template Pre-Packaged Content for Profitability Cloud 17
  18. 18. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Program Agenda • Introduction to Oracle ITFM • Why is ITFM Important? • ITFM Solution Components • The Service Costing Project • Q&A 18
  19. 19. Service Costing Project • Document your Business Cases • Identify the Services to be modeled • Preliminary Design • Identify and define the data you will need • Get extracts from the potential data sources and measure for data maturity/fit • Revise your design and initial socialization • Build the model and validate • Socialize and Operationalize Copyright 2016 Thavron Solutions, LLC
  20. 20. IT Transformation: Maturity-Value Curve Copyright 2017 Thavron Solutions, LLC IT Cost Management Internal Transparency External Transparency Demand Management Portfolio Optimization Value Maturity oImprove data quality at the source oLeverage assumptive data to fill in gaps oDetermine TCO of technology silos oCompare costs to industry peers oImprove vendor management oImprove data quality and completeness oDetermine TCO of IT Business Capabilities and Processes oAnalyze utilization rates to identify consolidation opportunities oLeverage cost benchmarks to reduce capability costs oBegin to balance cost with quality oImplement chargeback or show-back via Bill of IT oCommunicate cost, quality and value trade- offs (levers) oWork with business leaders to determine most cost-effective Business Capability and Application Portfolio oJustify or delay investments based on utilization and expected ROI of IT services oModel demand for products and capabilities based on forecast business change or as a reaction to changes oIntegrate accurate IT costing into business and product portfolio planning cycles oCost-effectively source IT (internally or externally) based on real-time business demand oMeasure and optimize investments as a strategic partner with the business in Run the Business (RtB), Grow the Business (GtB) and Transform the Business (TtB) initiatives oRestructure IT Capability portfolio to maximize business value based on changing business needs Value to IT (innovation) Business Value (growth)
  21. 21. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Account x Entity Account x Entity x Project Account x Entity x Project Account x Entity x Project x Vendor Account x Entity x Project x Vendor Service Resource (Cat) x Service Resource (Detail) x Service Consumer Consumer Consumer Consumer Consumer ITFM Flexible Maturity Model Phased Implementations Maximize Time-to-Value *Custom1 can also be included in any Financial View * Per PCM Point-of-View: Period, Fiscal Year, Scenario, Currency 21
  22. 22. Service Costing Project • Document your Business Cases • Identify the Services to be modeled • Preliminary Design • Identify and define the data you will need • Get extracts from the potential data sources and measure for data maturity/fit • Revise your design and initial socialization • Build the model and validate • Socialize and Operationalize Copyright 2016 Thavron Solutions, LLC
  23. 23. Business Analytics Solutions Provider: EPM, BI, and BD Technologies PCMCS IT Costing & Chargebacks Template Pre-built Application & Service Catalogue 25 • Services are attached with default drivers for allocation rules & reporting • Application or Service View can be modified to Application By Service utilizing Resource Dimension
  24. 24. Service Costing Project • Document your Business Cases • Identify the Services to be modeled • Preliminary Design • Identify and define the data you will need • Get extracts from the potential data sources and measure for data maturity/fit • Revise your design and initial socialization • Build the model and validate • Socialize and Operationalize Copyright 2016 Thavron Solutions, LLC
  25. 25. Business Analytics Solutions Provider: EPM, BI, and BD Technologies PCMCS IT Costing & Chargebacks Template Pre-built Dimensional Model 27 • Time: MTD, QTD, YTD, ITD • Scenario: Pre-built variance calculations • Currency: For Local, Reporting & Constant Currency Analysis • System Dimensions: Enables Transparency • Data Source: Recon & adjustments between GL & Project/Vendor/Resource in Sub-Ledgers • Account & Service: Prepopulated with content & calculations • Optional Dimensions: Allow for phased delivery and flexibility to adapt
  26. 26. Business Analytics Solutions Provider: EPM, BI, and BD Technologies PCMCS IT Costing & Chargebacks Template Data Source Dimension for Transparency & Adjustments 29 PCMCS Allocations & Calculations Fin Plan GL Balances Project Fin Plan Wrkfrc Plan Capital Plan PPM Time Entry Config Mgmt DB IT Stats AP HCM Adj Projects Payroll Fixed Assets
  27. 27. Service Costing Project • Document your Business Cases • Identify the Services to be modeled • Preliminary Design • Identify and define the data you will need • Get extracts from the potential data sources and measure for data maturity/fit • Revise your design and initial socialization • Build the model and validate • Socialize and Operationalize Copyright 2016 Thavron Solutions, LLC
  28. 28. Assessment Philosophy Design First, then Assess for Capability • Design ideal model based on Stakeholder input • Pros: – Stakeholder buy in /ownership – Ideal solution from the start • Cons: – Data not capable of supporting model – Project “hangs” or collapses Assess first, Design to Capability • Understand current data status, design model to capability with specific maturity goals • Pros: – Design will succeed – Rapid transparency to data “imperfections” • Cons: – Resistance to evolving/maturing model Copyright 2016 Thavron Solutions, LLC
  29. 29. The Myth of Perfect Data Myth: You need perfectly clean and aligned data to get insight to service costing Fact: You need data that is “clean enough” to allow your model to function consistently to get insight to service costing Copyright 2016 Thavron Solutions, LLC
  30. 30. Creating a Data Assessment Plan • Measuring gaps to the template- Identifying issues early, • Coordinate with Source System owners/SMEs • Extracts in raw format for assessment • Careful measurement of Stability and completeness • Calculation of maturity and readiness Copyright 2016 Thavron Solutions, LLC
  31. 31. Business Analytics Solutions Provider: EPM, BI, and BD Technologies PCMCS IT Costing & Chargebacks Template Data Management Approaches for Hybrid Deployments 34 • Native Load • Formatted Text Document • No Load Rule Required • Loads are initiated in PCM GUI • Data Management (e.g. FDMEE “Light” in the Cloud) • Provides data mapping • Provides scheduling • Provides Drill • Import/Export functionality • Hybrid • Utilizes on premise FDMEE 11.1.2.4+ to integrate with the cloud • Allows integration between GL and on cloud applications* • Provides Drill • Import/Export functionality PCMCS PCMCS PCMCS
  32. 32. Service Costing Project • Document your Business Cases • Identify the Services to be modeled • Preliminary Design • Identify and define the data you will need • Get extracts from the potential data sources and measure for data maturity/fit • Revise your design and initial socialization • Build the model and validate • Socialize and Operationalize Copyright 2016 Thavron Solutions, LLC
  33. 33. Typical Client Journey Copyright 2016 Thavron Solutions, LLC Design/ Fit-Gap Data Load & Modeling Initial Reporting Prioritize data gaps Data clean up Consumable Reports Roadmap Items You are Here
  34. 34. Business Analytics Solutions Provider: EPM, BI, and BD Technologies PCMCS IT Costing & Chargebacks Template Prescriptive Starter Set of Allocation Rules 37 Finance Allocs * Corp Ovhd Allocs * IT Ovhd Allocs * Intra-IT Allocs Project Allocs * Project OH Burdening * SOP-98 Opex to Capex * Run/Build Split Resource Costing * Vendor/Resource Costing * Configuration Item Costing ---People ---Assets Service Allocations * Sevice & Application Costing Consumer Allocations * Service Charge to Consumer * IT LOB Allocation to Consumer * IT Project Allocation to Consuemr Data Prep * Currency Conversion * Driver Prep • Pre-configured rules have been created that reference existing meta data. Rules have been tagged to unique Data Source dimension members to aid in reporting. • Rules are organized into rule sets that may be enabled or disabled for phased implementation work needed • Rules can vary by Point-of-View, allowing for interesting price- volume-mix and what-if analysis capabilities • PCM System dimensions (Rule, Balance) track the flow of data automatically which enables transparency throughout the process
  35. 35. Business Analytics Solutions Provider: EPM, BI, and BD Technologies PCMCS IT Costing & Chargebacks Template 15 Pre-Built Reports Enabled By Phase 38 Financial View IT Operations View Consumer View CIO Key Metrics Provides an overall view of key financial and non- financial IT Metrics for IT Management. Budget vs. Actuals (BvA) for Service Owners Plan vs. Actual Variance Analysis of Total IT Run Spend by IT Service Owner Run Spend By Service and Org Shows the Actual YTD Run Spend by IT Cost Center and Service IT Plan Review Provides a Comparison of Run/Build & Opex/Capex IT Spend by Scenario. CPSU By Service Shows a Plan vs Actual vs Variance of Annualized IT Allocated Cost Per Supported User by IT Service Build Spend By Initiative and Org Shows the Actual YTD Build Spend by IT Project and Initiative. Run vs. Build Summary Monthly Run/Build Trend benchmarked against Firm Revenue. IT Intra-Tech Service Shows the results of IT Technical Service Allocations. CPSU by Consumer Function Shows the Annualized IT Allocated Cost Per Supported User By Consumer Function IT Build by Project Category Provides YoY Comparison of Project Spend by Build Category. Monthly Vendor Spend Shows the monthly trend in spend by top vendors. CPSU By Consumer Geo Shows the Annualized IT Allocated Cost Per Supported User By Consumer Geography. IT Headcount Review Provides a comparison of IT Headcount by Scenario & Delivery Org. IT Run by Resource View Shows the Trend in Actual and Forecasted total allocated cost and CPSU by IT Resource Category. Bill of IT Per Consumer shows Billed Charges and Cost Per Service. 38
  36. 36. Socializing the Design and the roadmap • Stakeholder involvement • Review Use Case • Review Target Design • Share data gaps identified • Get sign off • Give homework if appropriate Copyright 2016 Thavron Solutions, LLC
  37. 37. Service Costing Project • Document your Business Cases • Identify the Services to be modeled • Preliminary Design • Identify and define the data you will need • Get extracts from the potential data sources and measure for data maturity/fit • Revise your design and initial socialization • Build the model and validate • Socialize and Operationalize Copyright 2016 Thavron Solutions, LLC
  38. 38. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Conceptual Project Timeline/Services/Deliverables 41 Pre- Week 1 Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Post- Week 7 Fit Gap Design Test: Client Lead Working Model w/Reporting & Data Int Routines Go-Live Deliverables • Communication templates and plans for model socialization • Report Validation • Business Service Map vs Existing • CMDB alignment vs Industry Stnd ITCC Training 12 Users Application Configuration Presales “30 Minute” Health Check Presales Discovery Workshop Leading Practices Deliverables • High Level Maturity Gap: Data & Systems | Process & People | Governance • High level Capabilities and Gaps Analysis to correctly scope and align project • 6 month critical path high level plan Train & Rollout 12 Users Steps • Instance Provisioning and Setup , 25 Users, incl Archiving and Backups • Initialize ITFM Solution via Templates • Configure Master Data for Entity, Custom1, Project, Service & Consumer and related attributes from Client Provided Files • Configure Data Load Routines with mapping to ITFM COA for Pre-Allocated Financials for CY Actual, Budget, Forecast & PY Actuals • Configure Data Load Rules for Entity Based, Project Based, Service Based, and Consumer Based Driver Metrics (4 Interfaces) • 1.5 Week Allowance for Modification of Existing Allocation Rule Sets, Reports & Ratios/Metrics to Meet Unique Client Needs Sustain Support Leading Practices Workshops: Data Maturity – Readiness | Roadmap | Business Services Def | CMDB Leading Practices – Change Management: Sponsorship / Staffing Dev to Test Migration Leading Practices: Model, Data & Rpt Roadmaps Deliverables • Environment Migration Guide • System Administrative Guide • Customized End User Training Material Workshops: Model Socialization | Use Cases Doc | Model | Reports Deliverable: Post implementation roadmaps Deliverables: Staffing Plans Sponsorship Tour Plans Lead Lead
  39. 39. Service Costing Project • Document your Business Cases • Identify the Services to be modeled • Preliminary Design • Identify and define the data you will need • Get extracts from the potential data sources and measure for data maturity/fit • Revise your design and initial socialization • Build the model and validate • Socialize and Operationalize Copyright 2016 Thavron Solutions, LLC
  40. 40. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Run the IT Service Costing Model Load, Calculate & Validate 43 • Post-Calculation Validation – Data Validation • SmartView • Queries • Rule Balancing Report • Traceability Maps • Dashboards • Financial Reports – System Validation • Programme Documentation • Dimension Statistics • Rule Data Validation • Execution Statistics • Pre-Calculation Validation – Meta-data Validation – Model Validation • Rule Sets and Rules • Model Views • Queries • Analytics • Data Grants – Data Validation • SmartView • Queries • Rule Balancing Report • Dashboards • Financial Reports Calculation
  41. 41. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Publish & Analyze the IT Service Costing Model Reporting & Analysis 44 • Provides built-in reporting and analytics capabilities • Are developed and maintained by end-users • Minimizes the need for dedicated Reporting teams. The people who use the reports can develop them • Provides: • Population Performance Analysis • Multi-dimensional P&Ls • Cost Contribution Reporting • Cost and Profitability Statistics • KPI’s & Dashboarding
  42. 42. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Program Agenda • Introduction to Oracle ITFM • Why is ITFM Important? • ITFM Solution Components • The Service Costing Project • Q&A 45
  43. 43. Business Analytics Solutions Provider: EPM, BI, and BD Technologies ITFM Partnership - Uniting Expertise and Strengths "This collaboration brings a unique intersection of technology, strategy and implementation expertise to the ITFM space. We see a compelling opportunity to further strengthen the bonds between the offices of the CFO and CIO and bring a common language to the business." - Matt Bradley, Senior Vice President, Product Development, Oracle 46
  44. 44. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Your Resource for ITFM @Oracle OpenWorld Have lunch with us! A Better Language Between IT & Finance (ITFM) Wednesday, 10/4, 11:30-1:00 p.m., Thirsty Bear Brewing Schedule a Health Check appointment. Meetings are available Monday-Wednesday Attend our featured conference session: Monday, 10/2, 12:15 - 1:00 p.m., Moscone South - 160 Oracle EPM Cloud for IT Financial Management Join us for Happy Hour! Tuesday, 10/3, 5:30 – 7:30 p.m., Wine Down San Francisco Engage with trusted partners to find out more about IT Financial Management Solutions (ITFM): Meetings Available Monday - Wednesday 47
  45. 45. Business Analytics Solutions Provider: EPM, BI, and BD Technologies Give us Your $.02 and We’ll Give You $5 Do You Know Your PCMII? • Take part in our study to learn how organizations navigate and manage Profitability & Cost Management (PCM) processes. • Show your results email for a $5 Starbuck’s gift card • Mobile friendly: ranz.al/openworld17 48

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