The document discusses how IT financial management (ITFM) can be expanded beyond traditional activities like budgeting and forecasting to improve business outcomes. It identifies 9 key focus areas for ITFM, including investment analysis, chargebacks, benchmarking, and vendor management. ITFM tools can provide visibility into IT costs and consumption to support decision making. The document recommends organizations assess their ITFM capabilities and prioritize expanding into areas that provide the most benefit.
With a relatively poor economy, many companies are now looking to enhance their bottom line through cost cutting. Often, the finance function is one part of G&A subject to this cost cutting exercise. This presentatio shares with you how companies are looking at finance and evaluating where and how much to cut.
This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/cost-reduction-primer-650
The Spend Reduction framework is a detailed guide for conducting an Enterprise Cost Reduction project. The objective of this document is to describe and provide guidance around the approach and practices applied on spend reduction engagements.
- What is Spend Reduction: Spend reduction involves reducing operating expense on purchased goods and services through demand management, strategic sourcing, and procurement-related tax minimization. It also addresses the importance of a well-designed procurement function to achieving and sustaining spend efficiencies.
- How much does it save, how fast, and how many times have we done it: Spend reduction can lead to significant cost savings typically in the range of 10-25%. It usually identifies a mix of short and longer term cost reduction opportunities.
- How comfortable are we with existing content: Developed content has been reviewed and approved by SMEs. Additional content, potentially in a stand alone document, should be developed to outline techniques and practices specific to optimization of employee benefits.
Strategize your company’s cost reduction plan using Cost Reduction Plans PowerPoint Presentation Slides. Reduce cost of the production of the product and increase the profit by using cost reduction plans PPT templates. Apply various techniques and tools to reduce the costs such as budgetary control, standard costing, cost benefit analysis, value analysis, contribution analysis, and more. Go step by step to reduce expenditure and continuously analyse costs, functions, etc. This deck covers various topics to help you strategize your cost reduction plan such as key levers to cost management, levers to achieve successful cost optimization, levels of strategic cost optimization, detailed levels within strategic cost optimization framework, prioritizing IT cost optimization, IT cost optimization, cost optimization techniques, cost optimization planning, stages in cost reduction, cost design, comparison of stages, etc. You can use price optimization PowerPoint presentation templates for better cost reduction plan. Create more demand for the product, increase sales and revenue, increase competitive strength and more using cost reduction plan PPT presentation slideshow. Assess the fallout of emerging circumstances with our Cost Reduction Plans PowerPoint Presentation Slides. It helps decipher the implications.
WHAT YOU WILL LEARN:
- Case studies of cost-reduction; what works and what doesn't.
- Cost saving strategies and critical success factors, and how to relate them to specific business areas and processes.
- How to identify opportunities for cost-reduction by identifying duplication of business functions/tasks, resources and services through a process view.
- How to monitor success of cost-reduction measures in real-time through dashboards & cockpits (KPI's and PPI's).
This document discusses how to improve indirect procurement processes through simplification, alignment, technology, and delegating tasks. It recommends categorizing indirect spend and defining appropriate purchasing channels. Technology like e-catalogs and e-procurement can speed up processes and increase visibility. Alignment between procurement, finance, and operations is important. Delegating non-strategic tasks can allow procurement to focus on strategic activities like spend analysis and supplier development. The document provides examples of how SAP SCM can be used for different purchasing processes.
Remove waste and improve processes to minimize cost of goods sold using content-ready Cost Optimization Strategies PowerPoint Presentation Slides. Outline a strategy for cost reduction without compromising the quality of the products with ready-made cost optimization strategies PPT templates. Intensify profitability and cash flow of an organization by implementing cost reduction strategies. Get access to the cost optimization strategies PowerPoint presentation slides for executing various strategies such as target costing, activity-based costing, enterprise resource planning, value engineering, and more. This deck covers various topics such as key levers to cost management, levers to achieve successful cost optimization, levels of strategic cost optimization, prioritizing IT cost optimization, IT cost optimization: three step approach, IT cost optimization initiative benefits, cost optimization techniques, cost optimization planning, cost cutting, cost management, cost design, cost positioning, and more. These templates are completely editable. You can use cost optimization strategies PowerPoint deck as per your need. Our Cost Optimization Strategies PowerPoint Presentation Slides help advancing your brand. Folks will get conscious of it's existence and benefits.
Procurement Purchasing Insights For Benchmarking Analysispraveenvarghese
The document discusses best practices for procurement and purchasing functions based on benchmarks of best-in-class organizations. It finds that chief financial officers see procurement as more strategic but that savings are often not fully realized or booked. Best-in-class enterprises book 24% more of projected savings and have formal savings measurement methodologies. The document advocates mapping pressures, actions, and performance using a PACE model and improving areas like procurement process standardization, knowledge management, automation, and savings tracking.
Lean IT, Lean Business: A new perspective to IT cost optimization Imad Almurib
Lean IT, Lean Business: A new perspective to IT cost optimization. In this document, I'm trying to explore the opportunities of applying best practices of IT Service Management and Lean Principles in the Cost Optimization domain.
With a relatively poor economy, many companies are now looking to enhance their bottom line through cost cutting. Often, the finance function is one part of G&A subject to this cost cutting exercise. This presentatio shares with you how companies are looking at finance and evaluating where and how much to cut.
This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/cost-reduction-primer-650
The Spend Reduction framework is a detailed guide for conducting an Enterprise Cost Reduction project. The objective of this document is to describe and provide guidance around the approach and practices applied on spend reduction engagements.
- What is Spend Reduction: Spend reduction involves reducing operating expense on purchased goods and services through demand management, strategic sourcing, and procurement-related tax minimization. It also addresses the importance of a well-designed procurement function to achieving and sustaining spend efficiencies.
- How much does it save, how fast, and how many times have we done it: Spend reduction can lead to significant cost savings typically in the range of 10-25%. It usually identifies a mix of short and longer term cost reduction opportunities.
- How comfortable are we with existing content: Developed content has been reviewed and approved by SMEs. Additional content, potentially in a stand alone document, should be developed to outline techniques and practices specific to optimization of employee benefits.
Strategize your company’s cost reduction plan using Cost Reduction Plans PowerPoint Presentation Slides. Reduce cost of the production of the product and increase the profit by using cost reduction plans PPT templates. Apply various techniques and tools to reduce the costs such as budgetary control, standard costing, cost benefit analysis, value analysis, contribution analysis, and more. Go step by step to reduce expenditure and continuously analyse costs, functions, etc. This deck covers various topics to help you strategize your cost reduction plan such as key levers to cost management, levers to achieve successful cost optimization, levels of strategic cost optimization, detailed levels within strategic cost optimization framework, prioritizing IT cost optimization, IT cost optimization, cost optimization techniques, cost optimization planning, stages in cost reduction, cost design, comparison of stages, etc. You can use price optimization PowerPoint presentation templates for better cost reduction plan. Create more demand for the product, increase sales and revenue, increase competitive strength and more using cost reduction plan PPT presentation slideshow. Assess the fallout of emerging circumstances with our Cost Reduction Plans PowerPoint Presentation Slides. It helps decipher the implications.
WHAT YOU WILL LEARN:
- Case studies of cost-reduction; what works and what doesn't.
- Cost saving strategies and critical success factors, and how to relate them to specific business areas and processes.
- How to identify opportunities for cost-reduction by identifying duplication of business functions/tasks, resources and services through a process view.
- How to monitor success of cost-reduction measures in real-time through dashboards & cockpits (KPI's and PPI's).
This document discusses how to improve indirect procurement processes through simplification, alignment, technology, and delegating tasks. It recommends categorizing indirect spend and defining appropriate purchasing channels. Technology like e-catalogs and e-procurement can speed up processes and increase visibility. Alignment between procurement, finance, and operations is important. Delegating non-strategic tasks can allow procurement to focus on strategic activities like spend analysis and supplier development. The document provides examples of how SAP SCM can be used for different purchasing processes.
Remove waste and improve processes to minimize cost of goods sold using content-ready Cost Optimization Strategies PowerPoint Presentation Slides. Outline a strategy for cost reduction without compromising the quality of the products with ready-made cost optimization strategies PPT templates. Intensify profitability and cash flow of an organization by implementing cost reduction strategies. Get access to the cost optimization strategies PowerPoint presentation slides for executing various strategies such as target costing, activity-based costing, enterprise resource planning, value engineering, and more. This deck covers various topics such as key levers to cost management, levers to achieve successful cost optimization, levels of strategic cost optimization, prioritizing IT cost optimization, IT cost optimization: three step approach, IT cost optimization initiative benefits, cost optimization techniques, cost optimization planning, cost cutting, cost management, cost design, cost positioning, and more. These templates are completely editable. You can use cost optimization strategies PowerPoint deck as per your need. Our Cost Optimization Strategies PowerPoint Presentation Slides help advancing your brand. Folks will get conscious of it's existence and benefits.
Procurement Purchasing Insights For Benchmarking Analysispraveenvarghese
The document discusses best practices for procurement and purchasing functions based on benchmarks of best-in-class organizations. It finds that chief financial officers see procurement as more strategic but that savings are often not fully realized or booked. Best-in-class enterprises book 24% more of projected savings and have formal savings measurement methodologies. The document advocates mapping pressures, actions, and performance using a PACE model and improving areas like procurement process standardization, knowledge management, automation, and savings tracking.
Lean IT, Lean Business: A new perspective to IT cost optimization Imad Almurib
Lean IT, Lean Business: A new perspective to IT cost optimization. In this document, I'm trying to explore the opportunities of applying best practices of IT Service Management and Lean Principles in the Cost Optimization domain.
Indirect Procurement - Mr. Ashwani Singh (Watson Pharma)ELSCC
Indirect procurement is the sourcing of all goods and services for a business that enable its activity. It is a slow, technology intensive process requiring change management across the organization boundaries.
This presentation will show you how strategically implementing FPL Business Energy Evaluation (BEE) recommendations can help reduce your overhead. Excerpts from a real company’s BEE will be shared and used to demonstrate the planning steps required to realize your savings goal. You will also get tips on engaging your employees and funding your plan.
The document discusses themes related to warehouse and distribution footprint. It identifies the top 5 themes as: [1] Network design; [2] Channel control; [3] In-house or 3PL; [4] Re-tender; and [5] Cost to serve. For each theme, the document provides viewpoints and considerations for defining a company's warehouse and distribution strategy.
The document discusses various aspects of vendor management including governance, performance evaluation, monitoring, and strategic partnership. It provides details on developing vendor profiles, assessing risks, establishing governance disciplines, evaluating quality and performance, linking key performance indicators to business benefits, monitoring through scorecards and metrics, and fostering strategic partnerships through mutual goals and trust.
This document outlines an agenda for a procurement meeting that includes: conducting a practical exercise to review organizational structure, metrics, challenges, and technology; discussing the top challenges facing Chief Procurement Officers; reviewing traditional versus upgraded procurement organization models; assessing technology basics and opportunities for leveraging technology; prioritizing key performance indicators; considering partnerships with suppliers; and managing risks.
Operational Transformation in Banking OperationsRajeev De Roy
This document discusses various aspects of operational transformation for organizations. It covers topics like lean process transformation, productivity enhancement, resource rationalization, operational policies, procedures, and control checklists. The goal is to improve efficiency, reduce costs, enhance revenue, and manage risks through operational excellence initiatives. Various tools and approaches are mentioned that can help analyze processes, optimize resources, standardize operations, and monitor performance. Case studies show benefits organizations have realized in areas like productivity, costs, quality and turnaround times through operational transformation.
The document discusses implementing lean six sigma principles and eProcurement/strategic sourcing in a heavy machinery industry's MRO environment. It outlines the implementation highlights, including a focus on change management over technology. Benefits achieved included reduced costs, improved compliance, and faster processing times. The strategic sourcing roadmap included spend analysis, supplier evaluation, contracting, and an eProcurement system to streamline the procure-to-pay process. Key success factors included cross-functional involvement, standardization, and benefits realization monitoring.
Retail Banking Operations CentralisationRajeev De Roy
This document outlines the strategy and imperatives for centralizing retail banking operations. Centralization aims to standardize processes, improve productivity, mitigate risks, enhance service quality, optimize costs, and improve outsourcing capabilities. Key elements include establishing centralized processing locations, consolidating the supply chain, implementing documented standard operating procedures, and establishing metrics to measure performance across the centralized network. The goals are to do more with less, eliminate non-value-add activities, improve operational control, and create a consistent high-quality customer experience.
The document discusses best practices for establishing and operating a Vendor Management Office (VMO). A VMO can help bring governance, structure, and strategic focus to global spend, savings, and vendor management. Key points include how a VMO can deliver scorecards, dashboards, and templates to provide visibility into spend; prioritize strategic vendors; and act as a central point of governance, policy, and escalation. The VMO leader requires experience managing vendors, contracts, finance, and driving change at an executive level.
How to implement a strategic IT vendor management programJeff Kubacki
CIO's and their IT leadership teams should focus more time on a strategic IT vendor management program. After doing this for 8 years by conducting annual IT vendor days and implementing World Class IT principles, I decided to share what has worked and why it is important in the transition to becoming strategic business partners.
This document discusses an Enterprise Resource Planning (ERP) system for a group consisting of 8 members with a common goal. It defines ERP as a business strategy and set of applications that optimize collaborative processes. The goal of the group's enterprise is to acquire, retain, and grow profitable customers. The document outlines the advantages and disadvantages of ERP, as well as steps to implement an ERP system and calculate its return on investment (ROI).
The document discusses financial management for IT services. It describes how FM ensures IT solutions meet requirements and are cost-effective. FM provides cost visibility, optimization, and cost recovery. Its goals are cost-effective stewardship, fully accounting for IT spend, and assisting management decisions. FM scope includes identifying assets/activities, developing budgets, analyzing costs/benefits of changes, and developing chargeback methods. Key definitions and an overview of FM components are also provided.
This document outlines a case study for implementing a metrics-driven vendor management services (VMS) framework. It begins with defining vendor management and outlining goals like reducing costs and risks. It then analyzes existing sourcing systems, data, technologies, and processes. Key sections describe the designed VMS metrics framework, including relationship, operational, financial, and satisfaction scorecards. The framework provides metrics in a customizable dashboard. Results included consolidated scorecards and drilldowns. Lessons learned stress understanding information hierarchies and ensuring quality assurance during implementation.
Business process re-engineering focuses on making fundamental changes to processes, technology, and human factors to achieve dramatic improvements in key measures. It takes a cross-functional, process-based perspective and is judged by measurable results. The key principles of BPR include focusing on core processes, enabling radical change rather than incremental improvement, and using information technology to enable new ways of working. BPR aims to improve outcomes like customer satisfaction, quality, costs and cycle times.
With the role of key vendors growing in importance and with more vendors being introduced into the workplace, effective vendor management has become a critical capability of any enterprise. This document describes how the design (or redesign) of the VMO needs to be approached with a focus on enlisting top skills, implementing effective processes and tools and establishing an organization whose role is clearly defined in the enterprise.
A world class procurement function is one that has a measureable impact on the organisation’s profit and loss and adds real commercial value. Find out how effective use of innovation and smarter working can help you get there.
Presented by: Gerard Chick, FCIPS (Optimum Procurement) at PfH Live 2014
The document discusses financial management techniques for evaluating energy efficiency investments. It introduces concepts like simple payback period, return on investment, net present value, and internal rate of return. It explains how to calculate each metric and compares their advantages and limitations. The key financial analysis techniques allow comparing energy efficiency project costs and savings over time to different investment alternatives.
The document discusses several tools and strategies for effective vendor management, including scorecards to evaluate vendor performance, rationalizing the vendor base, tiering vendors, business meetings, master contracts, vendor portals, relationship guides, and training. These methods allow companies to optimize relationships with vendors, focus resources on strategic vendors, provide vendors with performance visibility, and document policies and expectations.
Vendor Management System - Introduction2Frank Corris
A vendor management system (VMS) allows companies to efficiently manage temporary staffing needs. It facilitates the requisition, procurement, and billing processes for contract workers. The presentation reviews key aspects of how a VMS works, provides value-added enhancements, and discusses industry trends, challenges, cost savings opportunities, and best practices related to vendor management.
This toolkit details cost reduction opportunities across the Value Chain (as defined by strategist Michael Porter). Cost reduction initiatives are categorized in the areas of Enterprise-wide Opportunities, Asset Management Opportunities, and Function-specific Opportunities. Over 45 cost reduction initiatives identified--for each initiative, specific examples are provided, along with projected potential savings.
Download @ http://learnppt.com/powerpoint/
PowerPoint Tutorials @ http://pptdiagrams.wordpress.com/
Software License Optimization and ITSM - Drive Efficiency and Cost Savings Flexera
Guest Speaker, Martin Thompson, ITAM Review Analyst @itamreview
An enterprise app store can streamline the application request, approval and delivery process and enable proactive license compliance and optimum license usage. Learn how IT asset management and Service Management can work together to improve the efficiency of application delivery and drive cost savings in software spending.
Indirect Procurement - Mr. Ashwani Singh (Watson Pharma)ELSCC
Indirect procurement is the sourcing of all goods and services for a business that enable its activity. It is a slow, technology intensive process requiring change management across the organization boundaries.
This presentation will show you how strategically implementing FPL Business Energy Evaluation (BEE) recommendations can help reduce your overhead. Excerpts from a real company’s BEE will be shared and used to demonstrate the planning steps required to realize your savings goal. You will also get tips on engaging your employees and funding your plan.
The document discusses themes related to warehouse and distribution footprint. It identifies the top 5 themes as: [1] Network design; [2] Channel control; [3] In-house or 3PL; [4] Re-tender; and [5] Cost to serve. For each theme, the document provides viewpoints and considerations for defining a company's warehouse and distribution strategy.
The document discusses various aspects of vendor management including governance, performance evaluation, monitoring, and strategic partnership. It provides details on developing vendor profiles, assessing risks, establishing governance disciplines, evaluating quality and performance, linking key performance indicators to business benefits, monitoring through scorecards and metrics, and fostering strategic partnerships through mutual goals and trust.
This document outlines an agenda for a procurement meeting that includes: conducting a practical exercise to review organizational structure, metrics, challenges, and technology; discussing the top challenges facing Chief Procurement Officers; reviewing traditional versus upgraded procurement organization models; assessing technology basics and opportunities for leveraging technology; prioritizing key performance indicators; considering partnerships with suppliers; and managing risks.
Operational Transformation in Banking OperationsRajeev De Roy
This document discusses various aspects of operational transformation for organizations. It covers topics like lean process transformation, productivity enhancement, resource rationalization, operational policies, procedures, and control checklists. The goal is to improve efficiency, reduce costs, enhance revenue, and manage risks through operational excellence initiatives. Various tools and approaches are mentioned that can help analyze processes, optimize resources, standardize operations, and monitor performance. Case studies show benefits organizations have realized in areas like productivity, costs, quality and turnaround times through operational transformation.
The document discusses implementing lean six sigma principles and eProcurement/strategic sourcing in a heavy machinery industry's MRO environment. It outlines the implementation highlights, including a focus on change management over technology. Benefits achieved included reduced costs, improved compliance, and faster processing times. The strategic sourcing roadmap included spend analysis, supplier evaluation, contracting, and an eProcurement system to streamline the procure-to-pay process. Key success factors included cross-functional involvement, standardization, and benefits realization monitoring.
Retail Banking Operations CentralisationRajeev De Roy
This document outlines the strategy and imperatives for centralizing retail banking operations. Centralization aims to standardize processes, improve productivity, mitigate risks, enhance service quality, optimize costs, and improve outsourcing capabilities. Key elements include establishing centralized processing locations, consolidating the supply chain, implementing documented standard operating procedures, and establishing metrics to measure performance across the centralized network. The goals are to do more with less, eliminate non-value-add activities, improve operational control, and create a consistent high-quality customer experience.
The document discusses best practices for establishing and operating a Vendor Management Office (VMO). A VMO can help bring governance, structure, and strategic focus to global spend, savings, and vendor management. Key points include how a VMO can deliver scorecards, dashboards, and templates to provide visibility into spend; prioritize strategic vendors; and act as a central point of governance, policy, and escalation. The VMO leader requires experience managing vendors, contracts, finance, and driving change at an executive level.
How to implement a strategic IT vendor management programJeff Kubacki
CIO's and their IT leadership teams should focus more time on a strategic IT vendor management program. After doing this for 8 years by conducting annual IT vendor days and implementing World Class IT principles, I decided to share what has worked and why it is important in the transition to becoming strategic business partners.
This document discusses an Enterprise Resource Planning (ERP) system for a group consisting of 8 members with a common goal. It defines ERP as a business strategy and set of applications that optimize collaborative processes. The goal of the group's enterprise is to acquire, retain, and grow profitable customers. The document outlines the advantages and disadvantages of ERP, as well as steps to implement an ERP system and calculate its return on investment (ROI).
The document discusses financial management for IT services. It describes how FM ensures IT solutions meet requirements and are cost-effective. FM provides cost visibility, optimization, and cost recovery. Its goals are cost-effective stewardship, fully accounting for IT spend, and assisting management decisions. FM scope includes identifying assets/activities, developing budgets, analyzing costs/benefits of changes, and developing chargeback methods. Key definitions and an overview of FM components are also provided.
This document outlines a case study for implementing a metrics-driven vendor management services (VMS) framework. It begins with defining vendor management and outlining goals like reducing costs and risks. It then analyzes existing sourcing systems, data, technologies, and processes. Key sections describe the designed VMS metrics framework, including relationship, operational, financial, and satisfaction scorecards. The framework provides metrics in a customizable dashboard. Results included consolidated scorecards and drilldowns. Lessons learned stress understanding information hierarchies and ensuring quality assurance during implementation.
Business process re-engineering focuses on making fundamental changes to processes, technology, and human factors to achieve dramatic improvements in key measures. It takes a cross-functional, process-based perspective and is judged by measurable results. The key principles of BPR include focusing on core processes, enabling radical change rather than incremental improvement, and using information technology to enable new ways of working. BPR aims to improve outcomes like customer satisfaction, quality, costs and cycle times.
With the role of key vendors growing in importance and with more vendors being introduced into the workplace, effective vendor management has become a critical capability of any enterprise. This document describes how the design (or redesign) of the VMO needs to be approached with a focus on enlisting top skills, implementing effective processes and tools and establishing an organization whose role is clearly defined in the enterprise.
A world class procurement function is one that has a measureable impact on the organisation’s profit and loss and adds real commercial value. Find out how effective use of innovation and smarter working can help you get there.
Presented by: Gerard Chick, FCIPS (Optimum Procurement) at PfH Live 2014
The document discusses financial management techniques for evaluating energy efficiency investments. It introduces concepts like simple payback period, return on investment, net present value, and internal rate of return. It explains how to calculate each metric and compares their advantages and limitations. The key financial analysis techniques allow comparing energy efficiency project costs and savings over time to different investment alternatives.
The document discusses several tools and strategies for effective vendor management, including scorecards to evaluate vendor performance, rationalizing the vendor base, tiering vendors, business meetings, master contracts, vendor portals, relationship guides, and training. These methods allow companies to optimize relationships with vendors, focus resources on strategic vendors, provide vendors with performance visibility, and document policies and expectations.
Vendor Management System - Introduction2Frank Corris
A vendor management system (VMS) allows companies to efficiently manage temporary staffing needs. It facilitates the requisition, procurement, and billing processes for contract workers. The presentation reviews key aspects of how a VMS works, provides value-added enhancements, and discusses industry trends, challenges, cost savings opportunities, and best practices related to vendor management.
This toolkit details cost reduction opportunities across the Value Chain (as defined by strategist Michael Porter). Cost reduction initiatives are categorized in the areas of Enterprise-wide Opportunities, Asset Management Opportunities, and Function-specific Opportunities. Over 45 cost reduction initiatives identified--for each initiative, specific examples are provided, along with projected potential savings.
Download @ http://learnppt.com/powerpoint/
PowerPoint Tutorials @ http://pptdiagrams.wordpress.com/
Software License Optimization and ITSM - Drive Efficiency and Cost Savings Flexera
Guest Speaker, Martin Thompson, ITAM Review Analyst @itamreview
An enterprise app store can streamline the application request, approval and delivery process and enable proactive license compliance and optimum license usage. Learn how IT asset management and Service Management can work together to improve the efficiency of application delivery and drive cost savings in software spending.
Flexera Software Toolcase for the ITAM Review Tools Day Martin Thompson
The document summarizes an ITAM Review Tool Day presentation by Greg Holmes of Flexera Software. The presentation addresses common license management challenges faced by CFOs, CTOs, CMOs, and CEOs and how Flexera's tools help solve them. It provides scenarios of cost savings identified, impact assessments of infrastructure changes, deploying applications to new business units, ensuring compliance, and accessing license usage data. The presentation promotes Flexera's license optimization solutions and their on-premises, cloud, and managed service delivery models.
The document discusses strategies for converting maintenance costs into savings for oil and gas assets. It addresses:
1) Conducting a critical assessment and evaluation of maintenance plans to identify areas for cost optimization and ensure returns on investments in assets.
2) Planning for financial consequences by examining contingency plans to extend asset life and delay upgrades, as well as identifying maintenance issues before they become costly problems.
3) Leveraging tools like predictive analytics and inspections to improve maintenance and prolong the useful life of structures, ensuring sustainability and higher returns.
Gartner IT Financial, Procurement & Asset Management Summit London 2011 OverviewPascal Winckel
The first European edition of the Gartner IT Financial, Procurement & Asset Management Summit taking place Sept 28-29 in London, will gather hundreds of IT Asset management, procurement and IT finance leaders to learn and share the latest trends, best practices and advice on software licensing, contract negotiation, cloud and virtualization impact on cost and procurement, and many other related topics.
More information and registration at www.europe.gartner.com/itam
Your take-away from the IT Service Management (ITSM) presentation are:
• A clear understanding of PM practices used in the implementation of ITSM
• Planning tips to successfully deliver an ITSM process improvement project
• Marketing ideas to socialize the message to the organization
• Testing techniques to achieve organic improvements along the way
• Ways to achieve buy-in from stakeholders
This document discusses the need for IT Asset Management and how it can help organizations reduce costs and better manage their IT assets. It outlines the benefits of IT Asset Management, such as gaining control over assets, reducing risks, and lowering costs. It also provides steps for building a business case, including calculating potential savings from improved software license compliance, reduced IT support costs, and greater employee productivity. The document promotes a SaaS IT Asset Management service as a solution for organizations to easily implement IT asset management.
Strategies for Effective Hardware and Software Asset ManagementCA Technologies
Pro-actively managing IT assets and effectively planning for what’s next are not easy in increasingly complex IT environments. Learn about a government agency's journey to successful implementation of hardware and software asset management. Walk away with more in your toolbox to aid your own journey to building a sound strategic and tactical approach to IT Asset Management solutions from CA Technologies.
For more information on Management Cloud solutions from CA Technologies, please visit: http://bit.ly/1wEnPhz
This document provides guidance on managing favorites and commonly used transaction codes (T-codes) in SAP. It describes how to add T-codes to favorites by dragging and dropping them from menus, inserting them manually by transaction code, or adding them to folders for organization. Key T-codes recommended for asset technicians to add as favorites include transactions for asset master data, asset accounting, disposal, transfers, and displaying asset documents. The document provides guidance on setting up a favorites list that is easy to navigate for frequent transactions.
Leading Licensing Practices for Technology SolutionsFlexera
The document discusses disruptive industry trends that are pushing the software industry into a new phase of development, including consumerization, social/local networking, mobility, cloud computing, big data, and open source software. It will cover the key implications of these trends for licensing models and typical challenges organizations face in evolving their licensing approaches. Critical success factors for successfully evolving licensing strategies in response to these trends will also be discussed.
Technology Cost Management 4D Framework: A Smarter Way to Manage IT CostsCognizant
A framework for financial services IT cost management optimization based on a 4D approach: defining business vision, documenting current state, delineating business architecture and deciding build vs. buy.
Forrester report Digital Fuel IT financial management case-studyyisbat
This document summarizes an article about how Nationwide Mutual Insurance implemented IT operations financial management to increase transparency and collaboration between IT and business units. It discusses how Nationwide collects financial data on IT costs, allocates costs to business units based on services consumed, and provides reporting to help business units optimize their IT spending. This transparency has helped Nationwide transition IT from a cost center to a collaborative business partner and driven better joint decisions to control costs while meeting business needs.
How to Maintain a Productive CFO-CIO RelationshipVMware
The document discusses maintaining a productive relationship between the CFO and CIO. It notes that CFOs are under pressure to cut costs and justify investments, while businesses demand more IT. A collaborative CIO-CFO relationship is important to use technology to address business challenges and drive growth. The CFO's role in technology decisions has increased, and they prioritize business applications and analytics improvements. The document also summarizes a Gartner study on CFO perspectives, including their top technology priorities and views on topics like cloud computing. It recommends the CIO communicate priorities to the CFO to understand their goals and ensure technology investments align.
This document discusses how IT organizations can improve operating leverage through cost transparency and IT business management practices. It describes how IT business management helps bridge the gap between business and technology by providing visibility into IT costs and demand. This allows IT to better plan services and transform from a cost center to a true service provider that can scale back costs during economic downturns. The document contains several articles that discuss approaches like software as a service, service-oriented architecture, and selective sourcing to optimize operating leverage through more variable costs.
This white paper discusses implementing an IT financial management and cost recovery system. It notes that understanding true IT costs is challenging due to limited resources but is important for good governance. The paper recommends analyzing costs related to the IT portfolio, vendors, and resources. Building awareness of cost drivers across these areas provides opportunities for financial optimization. Developing a formal cost recovery plan with this insight allows IT to help the organization simplify cost allocations, improve visibility into cost structures, and optimize resource management. Implementing such a system provides benefits like improving economic decisions and demonstrating IT's value.
Cost Optimsation Approach from an IT PerspectiveSreeram Yegappan
This document discusses approaches to reducing costs from an IT perspective. It identifies three dimensions for cost savings: people, process, and technology. For people, it recommends multi-skilling employees, improving training, and investing in knowledge management tools. For process, it suggests automating redundant tasks to boost efficiency. For technology, it advises portfolio optimization, cloud migration, and data center consolidation. The document provides examples of how organizations have successfully reduced costs through initiatives in these three areas. It emphasizes establishing clear objectives and accountability for cost reduction programs.
Digital Fuel offers IT cost management solutions to provide visibility into IT costs and help manage spending. Their solutions model IT costs, allocate expenses, track cost drivers, and provide notifications of budget overruns. While other vendors also offer these capabilities, Digital Fuel got an early start and offers modular solutions that can be implemented incrementally. Taking a phased approach starting with basic cost modeling for a few key services can provide value even before implementing an automated solution. Nationwide Insurance uses Digital Fuel's solutions to analyze unit costs, facilitate cost reductions, and provide departments cost information based on consumption.
IT investment decision-making with confidence - A practical guide for medium-...Girish Kumar Ayyappath
This document provides a guide for medium-sized companies to make informed IT investment decisions with confidence. It recommends taking time for early planning, setting clear targets, prioritizing investments based on anticipated returns, optimizing processes before selecting technologies, and using a multi-stage selection process to choose the right software, hardware, and telecommunications solutions while considering technical, financial, employee, and service factors. The goal is to implement successful IT projects that accompany business growth in a cost-effective manner.
This document provides a guide for medium-sized companies to make informed IT investment decisions with confidence. It recommends taking time for early planning, setting clear targets, prioritizing investments based on anticipated returns, optimizing processes before selecting technologies, and using a multi-stage selection process to choose the right software, hardware, and telecommunications solutions while considering technical, financial, employee, and service factors. The goal is to implement successful IT projects that accompany business growth in a cost-effective manner.
The Role of IT in Supporting Mergers and AcquisitionsCognizant
Involving IT teams early and often during mergers and acquisitions can help enterprises realize more value from the operational and market synergies that bring businesses together.
Technology Business Management: Managing the Cost, Quality and Value of IT Se...Apptio
The document discusses how Technology Business Management (TBM) can help IT organizations manage costs, quality, and value. TBM provides software and methodology to track the full cost of delivering IT services. This gives IT leaders transparency into costs so they can optimize operations and have credible discussions with business stakeholders. TBM solutions also help IT finance teams provide accurate reporting on costs to different parts of the business and simplify budgeting processes.
Total IT spending as a percentage of revenue, total IT spending per user, and total IT spending per PC are three useful metrics for managing an IT organization and benchmarking against other companies. Total IT spending as a percentage of revenue indicates how efficiently a company spends on IT compared to industry standards and allows identification of opportunities for improvement. Total IT spending per user and per PC provide additional perspectives beyond total spending as a percentage of revenue to account for factors like shared devices. Benchmarking against other companies using these metrics helps identify best practices and areas for process improvement to increase efficiency and reduce costs.
CHAPTER EIGHT Strategic Alignment Tim Campos IN TODAY’S BUSINESS, .docxtiffanyd4
CHAPTER EIGHT Strategic Alignment Tim Campos IN TODAY’S BUSINESS, CIOs have tremendous opportunity to have a major strategic influence on their businesses. This opportunity arises from the rapid adoption of information technology over the past three decades across nearly every aspect of business. When a company wants to merge with another organization, the IT organization is one of the first corporate departments to be involved. When a new plant or facility is opened, the IT organization must be involved to help connect it to the rest of the company’s systems. Even when a company reaches into a new line of business, the IT organization is involved to help set up the information systems to support the new business. This opportunity, however, can also be the CIO’s greatest liability if the organization’s focus is diluted. IT has been adopted in nearly every business process, even those that are not very strategic. Nearly all employees at companies have e-mail accounts, and every corporation has a web site, regardless of whether it delivers products or services through that web site. Because all of these technology operations must function in order for the business to operate, CIOs must divide their focus and resources across the entire company. This breadth of demand creates tremendous challenges for IT organizations. It is not good enough simply to focus on those portions of the business that are strategic, to the detriment of everything else. Although this might work in the short run, over time the neglected business functions become a drain on the success of the business. (This is one of the reasons so many firms reimplement enterprise systems.) Moreover, what is “strategic” depends on whom one asks. A customer portal may not be that important to manufacturing, but it is critical to the strategy of the service organization. The resources allocated to the IT department are finite, yet the demands on the IT organization can at times appear infinite. It is this challenge that separates the mediocre from the exceptional IT organization. The secret to addressing this challenge is to strategically align your organization to the business. FRAMEWORK Strategic alignment results from structuring the IT organization around the needs of the business. To explain how this is done, let me break the operations of the IT organization down into four basic functions. Two are delivery functions: support delivery and project delivery. The other two are management activities: value attainment and strategic alignment. All activities of the IT organization can be categorized into one of these four functions, although, as we will see later, these functions are typically spread out across multiple teams, which is the source of much of the misalignment IT organizations face (see Figure 8.1). FIGURE 8.1 IT Strategic Alignment Framework These functions layer on top of each other such that failure at one level affects everything above it. Strategic alignment is achieved .
The document discusses implementing an IT financial management (ITFM) tool. It outlines the benefits of implementing an ITFM tool, such as increased cost transparency, improved efficiency, and better decision making. It then describes the key steps in the ITFM tool implementation journey, including assessing the current state, defining services, identifying data requirements, establishing governance, designing the cost model, evaluating tools, and implementing the tool and roadmap. Some challenges of implementation are also reviewed, such as data quality issues, lack of governance, and lack of education on ITFM methodology.
CHAPTER EIGHT
Strategic Alignment
Tim Campos
IN TODAY’S BUSINESS, CIOs have tremendous opportunity to have a major strategic influence on their businesses. This opportunity arises from the rapid adoption of information technology over the past three decades across nearly every aspect of business. When a company wants to merge with another organization, the IT organization is one of the first corporate departments to be involved. When a new plant or facility is opened, the IT organization must be involved to help connect it to the rest of the company’s systems. Even when a company reaches into a new line of business, the IT organization is involved to help set up the information systems to support the new business.
This opportunity, however, can also be the CIO’s greatest liability if the organization’s focus is diluted. IT has been adopted in nearly every business process, even those that are not very strategic. Nearly all employees at companies have e-mail accounts, and every corporation has a web site, regardless of whether it delivers products or services through that web site. Because all of these technology operations must function in order for the business to operate, CIOs must divide their focus and resources across the entire company.
This breadth of demand creates tremendous challenges for IT organizations. It is not good enough simply to focus on those portions of the business that are strategic, to the detriment of everything else. Although this might work in the short run, over time the neglected business functions become a drain on the success of the business. (This is one of the reasons so many firms reimplement enterprise systems.) Moreover, what is “strategic” depends on whom one asks. A customer portal may not be that important to manufacturing, but it is critical to the strategy of the service organization. The resources allocated to the IT department are finite, yet the demands on the IT organization can at times appear infinite. It is this challenge that separates the mediocre from the exceptional IT organization. The secret to addressing this challenge is to strategically align your organization to the business.
FRAMEWORK
Strategic alignment results from structuring the IT organization around the needs of the business. To explain how this is done, let me break the operations of the IT organization down into four basic functions. Two are delivery functions: support delivery and project delivery. The other two are management activities: value attainment and strategic alignment. All activities of the IT organization can be categorized into one of these four functions, although, as we will see later, these functions are typically spread out across multiple teams, which is the source of much of the misalignment IT organizations face (see Figure 8.1).
FIGURE 8.1 IT Strategic Alignment Framework
These functions layer on top of each other such that failure at one level affects everything above it. Strategic alignment is achieved.
IJRET : International Journal of Research in Engineering and Technology is an international peer reviewed, online journal published by eSAT Publishing House for the enhancement of research in various disciplines of Engineering and Technology. The aim and scope of the journal is to provide an academic medium and an important reference for the advancement and dissemination of research results that support high-level learning, teaching and research in the fields of Engineering and Technology. We bring together Scientists, Academician, Field Engineers, Scholars and Students of related fields of Engineering and Technology
As High performing businesses need to respond quickly to market changes, improve operational efficiency and accelerate growth. know more about how netmagic’s IT infrastructure services can help.
3gamma insights - Idea in brief - IT outsourcing in an ever-changing environment3gamma
The document discusses challenges with IT outsourcing in a changing environment. It argues that cost can no longer be the sole driver and that outsourcing agreements need to focus on outcomes rather than activities. Engaging the business is key to developing an effective outsourcing strategy aligned with business requirements. Flexibility is important, which requires collaboration between IT and vendors through strong relationships. Risk management should also be incorporated into the outsourcing strategy over the entire lifecycle.
Similar to Gartner using itfm_to_improve_biz_results_2012 (20)
This document discusses IT financial management (ITFM) and the need for transparency and effective governance. It outlines the information needs of key ITFM stakeholders like IT management, business leaders, and the CFO office. Common flawed ITFM practices that create problems are identified, such as differing accounting methods and a lack of business accountability for IT investments. The document proposes seven best practice principles for ITFM, including enabling transparency through measuring labor/asset usage and forecasting. It describes how HP software and services can help implement these principles to improve IT investment decisions, financial accounting, and resource allocation.
1) The document describes a 6-step approach to conducting service-based IT cost modeling: identify target services, define service levels, calculate service costs, identify cost saving opportunities, review recommendations with customers, and create plans to optimize costs.
2) It involves creating a cost model for each service by determining costs of underlying assets, operations, and labor, then analyzing costs and service levels to identify ways to reduce recurring, on-time, and future costs through means like adjusting service levels or renegotiating contracts.
3) The goal is to provide transparency into IT costs and give businesses leverage to control spending through understanding trade-offs between costs and service quality. Third Sky offers expertise in piloting this approach for
This document discusses modeling the total cost of preservation (TCP) for digital assets over long periods of time. It presents a framework that breaks preservation activities down into 10 categories that each represent a cost component, such as content owners, submission streams, servers, storage, and more. The framework is based on the OAIS reference model but modified for broader applicability. The document makes assumptions to make the TCP analysis tractable, such as considering only costs of preservation providers. It provides a formula to calculate the TCP that sums the costs of each component category over the life of digital assets.
The document discusses where to build a product/service cost model - within a planning tool or actuals-tracking systems. It recommends building the cost model within the planning tool first as this allows investment-based budgeting and setting rates for the upcoming year. While actuals-tracking systems can show revenues and expenses, a cost model there is only needed to analyze specific product/service profitability for efficiency improvements. The best approach is to start with cost modeling in the planning tool, then use those rates for invoicing and governance, and optionally replicate the cost model in actuals-tracking systems later.
This document discusses cost modeling approaches for digital preservation services to help ensure long-term sustainable funding. It examines both pay-as-you-go and paid-up pricing models, noting challenges predicting costs far into the future. A hybrid approach is proposed using paid-up pricing for easier to forecast costs and pay-as-you-go for more uncertain costs. It also considers flexibility in pricing to accommodate different producer budgets and transparency around costs to maintain trust. The goal is to develop a practical cost model even if not perfectly accurate to allow moving forward with preservation.
This document discusses cost modeling for digital preservation services. It aims to understand costs in order to plan for and implement sustainable preservation over time. Costs are difficult to account for and project given different activities and changing situations. The authors develop an abstract model of a curation system and the activities involved. They also discuss different approaches to cost recovery such as grants, campus funding, and direct billing. Paid-up pricing is proposed to address fluctuating budgets by collecting an endowment to cover future preservation costs over a set term. Various pricing scenarios are provided as examples.
The document discusses implementing financial transparency and chargeback/showback policies when transitioning to an IT-as-a-Service model. It outlines an eight step process for understanding costs, defining services, allocating costs, determining unit prices, measuring consumption, and invoicing business units. Financial transparency is presented as key for IT to run more like a business, compete with external providers, and ensure efficient service delivery through cost analysis and business collaboration.
This document discusses costing models for IT services. It provides an overview of why costing IT services is important for transparency, value demonstration, and performance monitoring. It then describes a simple costing model that assigns services to cost centers and allocates staff costs. However, this basic model has limitations and may not capture all costs accurately. The document advocates using the more comprehensive TRAC costing methodology and provides a toolkit for costing IT services that outlines key steps. It also discusses challenges of costing cloud services and provides case studies on costing help desk, email, and data center services to illustrate applying the models.
The UC Curation Center at the California Digital Library has developed a "paid-up" cost model for long-term digital preservation that allows for a single up-front payment to cover ongoing preservation costs indefinitely. The model abstracts preservation activities into 10 high-level cost components and defines three cost functions to estimate total costs over time: cumulative pay-as-you-go costs, discounted pay-as-you-go costs, and a paid-up price that assumes an up-front payment earning interest. This approach aims to address budget constraints by offering a one-time financial commitment for permanent digital preservation.
- Cost and pricing models for shared IT services across universities must balance financial goals like cost recovery with openness and reasonableness for users.
- Costs are determined on an incremental, partial, or full basis, while price is set based on cost recovery goals and what users will accept.
- Accurately determining costs is challenging, as is estimating usage to set appropriate prices that achieve cost recovery without undue risk. Flexibility in pricing approaches can help manage this risk.
IT organizations need financial transparency to show business stakeholders the costs of specific IT services. This document outlines five steps to achieve financial transparency: 1) create an inventory of business and technical services, 2) calculate cost models for each service, 3) identify metrics to measure service consumption, 4) collect and analyze cost and usage data, and 5) benchmark costs against industry peers. Financial transparency allows IT to reduce costs, improve services, and demonstrate the value provided to the business.
BMC Service Cost Management provides transparency into the full costs of delivering IT services through comprehensive service cost modeling and analytics. It collects cost and usage data from various sources, builds multi-dimensional models of service costs, and generates reports to provide visibility into drivers of costs and consumption across the organization. This enables more accurate chargebacks to business units as well as optimization of spending through informed decision-making about high and low value services.
The document discusses the importance of financial transparency for organizations considering moving IT services to the cloud. It argues that to determine which services can be moved cost-effectively, organizations need to understand the current costs of delivering specific services. A 5-step process is outlined to achieve financial transparency: 1) Inventory services and costs, 2) Build cost models, 3) Identify service utilization, 4) Provide user bills, 5) Analyze cost-benefit of cloud options. Financial transparency is presented as key to making informed decisions about cloud computing cost-effectiveness.
This document summarizes a service offered by BMC to transform an organization's service catalog. The service aims to define critical business and technical services, describe key services for the catalog, develop a service catalog management process, and provide a roadmap for portfolio management. Doing so will provide visibility into services, define services needed for cloud and IT initiatives, foster a service-oriented mindset, and lay the foundation for business value and customer satisfaction. The service involves an initial 8-10 week engagement to identify services, design the catalog data model, and provide a roadmap for future versions of the expanded catalog.
The BMC IT Business Management Suite is an integrated solution that provides CIOs and IT leaders visibility and control over the business aspects of running an IT organization. It supports centralized management of IT financials, vendors, projects, activities, personnel, and compliance. The suite delivers transparency and enables improved business alignment, reduced costs, and increased business value. It consists of applications that manage costs, resources, projects, finances, suppliers, and regulatory compliance.
The document summarizes a BMC software solution called BSM for IT Business Management. It provides centralized management of IT finances, projects, suppliers, activities, and compliance to give leadership visibility into costs and improve business alignment. Key features include transparency into IT costs, prioritizing projects based on business goals, managing supplier relationships, automating compliance activities, and improving financial planning. Case studies show customers reducing costs by 50% with improved accuracy and control over their IT operations.
This document provides a guide to the typical source data needed for standard reporting in Apptio's Cost Transparency and Business Insights modules. It lists data sources for various types of financial, infrastructure, application, project, and human resources data. The data sources are categorized as required, recommended, or optional depending on whether they are minimally needed or can provide additional granularity. The purpose is to help customers understand what data should be collected or connected to Apptio to facilitate effective reporting and analysis.
Apptio Cost Transparency automates the process of translating raw data into monthly analysis of IT costs and drivers. It accelerates financial review processes, aligns teams around shared data analysis, and guides investment decisions. Unlike consulting or tools with fixed models, Apptio delivers interactive reporting in weeks that adapts over time. It transforms raw source data into dimensional reporting and analysis using an adaptive data model and pre-built cost allocation methods.
This document discusses automating IT cost transparency using the Apptio software as a service offering. It provides an overview of the benefits of IT cost transparency, such as identifying cost savings opportunities and improving scenario planning and decision making. The Apptio solution allows users to model IT costs and relationships visually, import data from multiple sources, and gain insights through interactive reporting, analytics, and scenario analysis. This helps IT organizations optimize costs and communicate value to the business.
Service Transition (ST) ensures new or changed IT services can be effectively operated by validating service designs against requirements. ST manages changes, risks, quality assurance, and implements service designs so operations can manage services and infrastructure in a controlled manner. Key ST processes include transition planning and support, change management, service asset and configuration management, release and deployment, validation and testing, and knowledge management. Change management aims to minimize incidents from unplanned changes by using standardized change procedures, CAB approval, and post-implementation reviews. ST faces challenges in driving cultural shifts toward centralized change control.
In World Expo 2010 Shanghai – the most visited Expo in the World History
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China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
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Poonawalla Fincorp Limited, under the leadership of Managing Director Abhay Bhutada, has achieved industry-leading Gross Non-Performing Assets (GNPA) below 1% and Net Non-Performing Assets (NNPA) below 0.5% as of May 31, 2024. This success is attributed to a strategic vision focusing on prudent credit policies, robust risk management, and digital transformation. Bhutada's leadership has driven the company to exceed its targets ahead of schedule, emphasizing rigorous credit assessment, advanced risk management, and enhanced collection efficiency. By prioritizing customer-centric solutions, leveraging digital innovation, and maintaining strong financial performance, Poonawalla Fincorp sets new benchmarks in the industry. With a continued focus on asset quality, digital enhancement, and exploring growth opportunities, the company is well-positioned for sustained success in the future.
Budgeting as a Control Tool in Government Accounting in Nigeria
Being a Paper Presented at the Nigerian Maritime Administration and Safety Agency (NIMASA) Budget Office Staff at Sojourner Hotel, GRA, Ikeja Lagos on Saturday 8th June, 2024.
5 Compelling Reasons to Invest in Cryptocurrency NowDaniel
In recent years, cryptocurrencies have emerged as more than just a niche fascination; they have become a transformative force in global finance and technology. Initially propelled by the enigmatic Bitcoin, cryptocurrencies have evolved into a diverse ecosystem of digital assets with the potential to reshape how we perceive and interact with money.
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Contributors included:
Jo Blanden, Professor in Economics, University of Surrey
Clive Bolton, CEO, Life Insurance M&G Plc
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Nida Broughton, Co-Director of Economic Policy, Behavioural Insights Team
Jonathan Cribb, Associate Director and Head of Retirement, Savings, and Ageing, Institute for Fiscal Studies
Joanna Elson CBE, Chief Executive Officer, Independent Age
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Gartner using itfm_to_improve_biz_results_2012
1. The Business-Centric CIO
I s s u e 2
1
The Business-Centric CIO
2
From the Gartner Files:
Using IT Financial Management
to Improve Business Outcomes
6
About VMware
Today’s successful CIOs are not only
technology experts; they also deliver vital
business leadership. They run organizations
that act as service brokers, driving
competitive advantage, rather than as
simple service providers who only respond
to requests. They identify opportunities
to leverage technology to drive growth
and innovation, while understanding that
spending decisions have a direct business
impact.
Optimize the Business Value of Your IT
VMware IT Business Management
solutions deliver complete, consolidated
views into IT capital, operating and service
expenses across a broad range of financial
data sources. They collect and abstract
information, model it and publish service,
cost and governance models.
VMware solutions leverage meaningful
measurements and reports—including a
bill of IT services, chargeback, service-
level reporting and vendor scorecards—to
support more effective engagements with
business stakeholders. With VMware
solutions, enterprises manage IT agendas
with deep financial discipline, leveraging
fact-based decisions across the entire IT
portfolio. As a result, enterprises can make
informed financial trade-offs that are
aligned with business priorities.
Featuring research from
Innovative CIOs and IT organizations are using
VMware IT Business Management to:
• Gain complete, consolidated visibility into
IT cost and performance
• Manage IT agendas with deep financial
discipline
• Leverage fact-based decisions across the IT
portfolio
• Align cost and performance service trade-
offs with business priorities
• Engage more effectively with business
stakeholders through meaningful
measurement
Source: VMware
2. 2 The Business-Centric CIO Issue 2
From the Gartner Files:
Using IT Financial Management to Improve Business Outcomes
• Conduct an assessment of the IT
finance function and build a two- to
three-year road map that outlines
the mission of ITFM.
• Expand the IT finance function
only in those key areas that
add significant value for your
organization (for example, portfolio
management, business case analysis,
chargebacks, service costing and
benchmarking).
• Clearly communicate any changes
in responsibility in the IT finance
function to all stakeholders.
ANALYSIS
ITFM has historically focused
primarily on cost management
through the traditional financial
planning and analysis activities of
budgeting, forecasting, monitoring
and reporting of costs that are driven
by the needs of corporate finance.
These are absolutely essential, and the
initial focus of any IT finance function
should be to ensure that financial
planning and analysis activities are
done well. However, to truly improve
business outcomes, ITFM needs to
move beyond managerial accounting.
This will include focus on several key
areas, such as portfolio management,
business case analysis, chargebacks,
service costing and benchmarking.
Dedicated IT finance functions have
historically focused on traditional
financial activities. Many IT finance
functions stay in their comfort zone
and fail to optimize/maximize the
value they can deliver. Getting more
value out of IT financial management
(ITFM) requires expanding the IT
finance function’s involvement into
other areas.
Key Findings
• The IT finance function has focused
primarily on traditional financial
planning and analysis activities,
such as budgeting, forecasting and
monthly closings.
• Financial planning and analysis
activities are critical for proper
managerial accounting and create
the foundation for effective ITFM.
• The IT finance function can lead
or (more often) work together
with other functions to create
additional business value (for
example, PMO, procurement, IT
vendor management or IT asset
management).
Recommendations
• Ensure that your IT finance
organization is operationally
efficient and effective in the
fundamental financial planning and
analysis areas before attempting
higher levels of engagement and
maturity.
Key ITFM Focus Areas
During the past several years, IT
has become increasingly important to
business success, and has the ability
to add value and impact the bottom
line significantly. We have identified
the following nine key focus areas that
the IT finance function should lead or
assist with, which, if done correctly,
will enhance business outcomes:
• Traditional financial planning and
analysis activities: This is the cost
of entry into effective ITFM and the
foundation in which effective ITFM
practices are built. There must
be solid processes within IT that
integrate into corporate systems so
that a company’s financial position
is effectively managed. Failure to
do this often mires the CIO with an
inability to get past the “budget”
discussion with the CFO and
corporate finance regarding:
• Budgeting and forecasting
(operating and capital)
• Financial reporting and analysis
(generally profit-and-loss-based,
including variance analysis)
• Monthly close process (booking
and monitoring IT general ledger
entries)
• Providing financial support to
the CIO and IT senior leadership
3. Issue 2 The Business-Centric CIO 3
• Investment/business case analysis:
The ability of ITFM to provide
accuracy costs and benefits
associated with technology
investments is critical whether
it is new project spending or a
technology refresh. This builds a
solid foundation that enables IT,
finance and the business to have
a clear understanding of why the
money is being spent and whether
there are benefits that drive
additional value. Success requires
partnership with IT (senior leaders,
PMO and business relationship
management), corporate finance and
the business.
• Chargebacks/allocations (showback
or bill of IT): A clear understanding
of the services IT provides in
addition to per-unit cost and usage
is required to effectively allocate
costs, as well as drive service cost
optimization and improvements.
IT can use this information when
working with the business to
understand the services they use and
can afford. This also assists greatly
in the demand management process.
Mature ITFM organizations often
use a service costing approach to
facilitate effective chargebacks.
However, if a full service-based
costing approach is not used,
then ITFM can take alternative
approaches, such as “showback”.
At a minimum, you should identify
and allocate for key discretionary IT
costs (for example, projects and end-
user costs, such as mobile phones).
It is extremely important to give
cost transparency to the business.
Going a step further and charging IT
costs will greatly assist in optimizing
costs.
• IT benchmarking and measurement:
Providing insight into how internal
costs compare with other internal
and especially external providers
is an area that IT finance should
provide leadership in. The ability
to provide benchmarking has dual
benefits. It often builds credibility
internally, while identifying areas
of opportunity for IT to improve its
cost structure. IT finance is in the
best position to understand IT costs
and work with key IT staff to build
a repeatable process.
• IT staffing and resource
management: Because labor
accounts for more than 40% of IT
spending in a typical environment,
ITFM should effectively cost out
labor rates by resource type and
work with the PMO or resource
management office to ensure that
IT resources are effectively used.
The inability to effectively manage
resource demand is often the single
biggest risk to the IT budget. A wide
variety of topics affect costs exist
that the IT finance function can
assist in analyzing and directing.
The IT resource labor mix (for
example, internal versus external
resources, and onshore versus
offshore) is a prime example. The
associated strategies will drive labor
rates and service quality.
• Project portfolio management:
The IT finance function should
collaborate with the PMO and
business relationship management in
understanding the costs of projects,
as well as the timeliness and the
quality that the end results deliver.
In many organizations, the business
views effective project delivery as
the primary value add from IT.
ITFM should ensure that project
costs are consistently defined,
tracked and forecast. This can be a
complex process, because it often
requires tracking time and resources
spent on the implementation
(with a time tracking tool), new
capital expenditures for hardware
and software (in a fixed assets
system), along with new support
costs triggered by the project (for
example, depreciation, maintenance
and hosting) booked directly to the
general ledger. Although tracking
costs is paramount, the need to
track project benefits is also an
area where the IT finance function
can assist IT and the enterprise in
understanding whether the benefits
were received.
• Vendor management/procurement:
The IT finance function can
assist procurement and vendor
management in ensuring that the
right data related to IT spending
is available and analyzed. Gaining
visibility into the spending
associated with vendors is critical
through the examination of existing
contracts and upcoming renewals.
Having the ability to forecast
ongoing needs and effectively
leverage this information in the
procurement process is integral to
optimizing IT costs. It matters less
whether ITFM manages this process
or is even heavily engaged. What
is most important from a financial
perspective is ensuring that accurate
IT spending data is available for
analysis and forecasting purposes.
• IT performance management:
Cost and benefit goals should
be integrated with typical IT
performance metrics, and ITFM
4. 4 The Business-Centric CIO Issue 2
should work with the appropriate
IT owner to ensure that these are
incorporated. It isn’t sufficient to
show that IT provides services at the
right prices. IT must show it uses
the right services at the right price at
the right time.
• IT asset management: Tracking
assets and their associated costs are
instrumental in delivering additional
value. ITFM must effectively partner
with the configuration management
database (CMBD) owner and/
or IT asset management to ensure
that key financial elements are
captured. Although often difficult
to do effectively, efforts must
be made to manage the process.
Otherwise, there are significant risks
of unexpected costs (especially in
software licensing). Like the last
four key focus areas, ITFM does
not need to take the lead but does
need to partner to ensure that the
financial impact of assets are tracked
and are available for multiple uses.
Potential Benefits of ITFM
Organizations with a high degree
of ITFM credibility typically see many
benefits. The most critical benefit is an
overall improvement in the alignment
between the business and IT. This
is particularly true of organizations
that expand ITFM beyond budgeting,
forecasting and chargeback,
widening its focus by providing cost
transparency (for example, via service
costing), which enables the business
to make better decisions regarding
the use of IT services or assisting in
project tracking, prioritization and
investment analysis. The improved
alignment with the business and the
resulting integrated business and IT
planning and communication, not the
ITFM processes in and of themselves,
provide the increased value to the
organization.
Delivery of Additional Value Enabled by
ITFM Tools
When we consider the major
challenges facing IT leaders today,
most of them do not necessarily
revolve around technology. Given
the complexity facing the IT and IT
finance functions, most IT CFOs need
to address the following challenges to
succeed:
• Lack of clarity regarding what the
IT finance function is responsible for
(and minimal direction from CIOs
and/or CFOs).
• The requirement for significant
amounts of IT data and IT analytics
— both financial and nonfinancial.
• The need to slice IT costs multiple
ways often requires additional tools
just for the IT finance function.
Fortunately, these ITFM tools are
becoming increasingly available.
However, properly explaining their
justification can be difficult.
ITFM tools can enable IT leaders
to have meaningful discussions with
business consumers about the cost,
consumption and value of IT-enabled
business services. Although tools
are not a panacea, they do allow IT
organizations to create a single version
of the truth regarding the cost of IT —
something that has traditionally not
been present in most organizations.
This improved view into IT costs
and consumption enables business
stakeholders to make more informed
decisions about where to invest in
IT. Often, ITFM tools are brought
into the organization to support
cost allocation and recovery efforts.
However, the potential exists to use
Figure 1 Potential Benefits of ITFM
IT Financial
Transparency and
Service Costing
Cost
Management/
Optimization
Improve Financial
Accuracy and
Forecasting
Improve IT's
Ability to Respond
to Business Needs
Align IT
Investments With
Business
Objectives
Achieve Better
Outcomes From
IT Investments
Improve the
Credibility of IT
Manage Demand
for IT More
Effectively
Improve Resource
Utilization
Source: Gartner (August 2011)
5. Issue 2 The Business-Centric CIO 5
ITFM tools for other areas (such as
budgeting and forecasting, as well as
vendor and contract management).
Assess ITFM Capabilities and Expand
Them Based on Potential Benefits
Each of the nine key focus areas
outlined in this research will add
value if done well by optimizing costs,
managing risk or enhancing revenue.
Next steps should include:
• Perform an objective assessment of
each of the nine key focus areas to
measure the overall performance,
regardless of whether the associated
activities are performed by ITFM.
• Do a gap analysis for each key
focus area, and identify where you
may need additional effort (people,
processes and technology) to
effectively deliver.
• Prioritize each key focus area based
on the requirements of the IT
organization and which areas will
most benefit the enterprise.
• Use this assessment to decide where
to enhance your ITFM capabilities,
and build a road map of where you
would like the IT finance function to
be in the next two to three years.
Expanding the role of the IT
finance function does not necessarily
mean taking work or responsibility
from previously established areas
(for example, PMO, procurement,
IT vendor management and IT asset
management). Rather, it means
ensuring that the right financial data is
available and effectively leveraged to
manage your organization.
Conclusion
Ensure that you get the basics right
first. If your IT finance team cannot
sufficiently plan, forecast or report on
IT based on how corporate finance
views IT expenses and capital, then
you will likely lose the confidence of
the CFO and spend too much time
explaining budget variances. If there
is a gap in any of the nine key focus
areas, then decide how you will fill it,
and determine how or whether the IT
finance function can assist.
Ensure that you gain a clear
understanding of the organization’s
priorities as it relates to the nine key
focus areas in order for ITFM to be
effectively leveraged. A great first step
is getting senior management (CIO or
CFO) buy-in to the right focus areas.
Don’t try to tackle all areas at once.
Use an iterative process, and build an
ITFM practice that meets the needs of
both IT and corporate finance, while
maximizing value to the enterprise.
Gartner RAS Core Research Note G00215700,
Jim McGittigan, 12 August 2011
Figure 2 IT Business Management: Attribute Maturity
Source: Gartner (August 2011)
Manage
Demand for IT
Invest in the
Right Areas
Improve IT
Financial
Visibility
Tools Can Help Here…
…but They
Won't Solve
All IT Issues.
Improve
IT/Business
Relationship
Provide IT
Governance
In a Box
Define Services
and Processes