Thavron maturing to consumption based models

Maturing to Consumption based Models
How to measure data maturity and readiness
Copyright 2016 Thavron Solutions, LLC

Potential Financial Impact
• 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
Copyright 2016 Thavron Solutions

Process/Business Impact
• 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
Copyright 2016 Thavron Solutions

Catalog &
Asset
Management
Service
Costing &
Billing
Product &
Project
Management
Supplier /
Vendor
Management
Service
Portfolio
A Framework for Business Service Success
Financial LifecycleProduct Lifecycle
™

Catalog &
Asset
Management
Service
Costing &
Bill of IT
Supplier /
Vendor
Management
Service
Portfolio
IT Financial Management - Legacy
Annual/Quarterly Actuals
Allocated Costs /low transparency
Manual Budgeting process
High Forecast variance

Oldest Methodology
IT $$
GL/Budget Data
Flat
Business
Allocations

Infrastructure Chargeback.
$$
GL/Budget Data
Asset, Operational and Maint.
Data
Labor/Project Data
Direct and Indirect
Charges mixed

Catalog &
Asset
Management
Service
Costing &
Bill of IT
Supplier /
Vendor
Management
Service
Portfolio
IT Financial Management
Monthly Actuals
Semi- Automated Budgeting process
Forecast variance

Service by Proxy
$$
GL/Budget Data
Data
Labor/Project Data
Service
Catalog

Consumption Based Chargeback
$$
GL/Budget Data
Data
Labor/Project Data
Service
Portfolio
Business
Value

Catalog &
Asset
Management
Service
Costing &
Bill of IT
Supplier /
Vendor
Management
Service
Portfolio
IT Financial Management
Allocated Costs/low transparency
Monthly Actuals
Infrastructure/TCO costs/transparency
Semi- Automated Budgeting process
Forecast variance
Rolling /monthly actuals
Business Service Prices
Rolling Budget/Forecast

Modeling Best Practices
• Design top down/ build bottom up
– Know your destination before you plan the route
• Validate Bottom Up

Types of data for a Consumption Based Model
• Service Cost Components:
– Labor
– Infrastructure
– Software
– Maintenance & Support
– Ongoing Development
– Depreciation
– Service Consumption Records

Where does the data come from?
• Finance System
• Depreciation Tracking
• CMDB
• Asset Management
• Storage Management System(s)
• Data Center Management
• Project Management/Tracking
• Invoice management system
• Ticketing System(s)
• Server Management Software
• VCenter or equivalent
• Cloud Provider Invoicing
• HRIS/Timekeeping
• Network Management System(s)
• License Management System(s)
• Discovery Systems

What does the process look like?
• Identify the area(s) you want to mature
• Identify and define the data fields you will need to make those
sections of the model consumption driven
• Get extracts from the potential data sources and map the data
fields
• Measure for data maturity/fit
• Pick appropriate data source and implement changes

Do I need to mature this?
Every allocation does not need to be consumption driven by detailed data

How Does the Data Fit Together?
• Not a direct linkage to Service in all data sources-
– Layered model / Cost Components that are assembled into Services
• Do need key field linkage between data sources within
components or Business Rules that link them together.

Putting the pieces together…
Type of TCO Critical Linkage
Application • Application to Logical Server
• Logical Server to Storage
• Development Time to
Application
• Server and Storage to
Datacenter
• Software to Application
• Software Maint to Application
• Databases to Application
• Support Tickets to Application

Mapping Source data to your Design
Storage Requirements Client Data File #1 Client Data File #2
Master Definition Source Field Source Field
Storage ID
Amount Engineered
A measurement of the amount of storage
engineered for allocation and utilization. Engineered Amount Engineered
Amount Allocated
A measurement of the amount of storage
that has been allotted for use. Allocated
Amount Utilized
A measurement of the amount of
allocated storage that is being used. In Use Utilized
Storage Type
The storage space, facility or zone;
physical or logical. Storage Type
Tier
The designated location within the
network hierarchy for the storage, such as
tier 1, 2 or 3. Tier Tier
Location The geographical location of storage. Location Region
Server Name The name of server used for storage. Server Server Name
Asset Number
A unique number used to identify the
asset. Asset ID

What to measure?
• Stability
• Completeness
• Correctness

Data Stability
• Column order and headers are
unchanging
• Values in a column are consistent
in meaning – no context sensitive
values
• Format of data is stable over time
and between data sources
– Automated versus hand entered

Data Completeness
• 80-90 % of data needed for
common linkages are present
• Are your required fields also
required data fields in source
system?

Data Correctness
• Effort to measure before
modeling begins almost never
worth the “win”
• Ownership belongs with Source
Data Owners
– Engage them early and share
reports/results frequently
– Build a partnership

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

What is Clean Enough to Build?
• Contains key fields needed to model
• Data has good Stability
• Data has reasonable Completeness
• Correctness will come with validation

Creating a Data Assessment Plan
• Coordinate with Source System owners/SMEs
• Extracts in raw format for assessment
• Careful measurement of Stability and completeness
• Calculation of maturity and readiness

Where are the sand traps?
• Data Samples can miss errors/problems
• Perception of “problem data” can slow
down your project
• Data Extracts change when you go to
launch
• System changes/updates/upgrades
impact extracts

CMDB Sand Traps
• Asset Classes not well defined
• Relationship Type usage
• Relationship Coverage
• Orphans
• Bad Relationships
• Circular Relationships
• Meta Tag Coverage

CMDB as mathematical graph

Visual analysis

Quick visual insights

Don’t be overwhelmed by information density

Make friends with your local data scientist

Quantitative Analysis of Relationships
Type
cmdb_ci_acc
cmdb_ci_aix_server
cmdb_ci_app_server_jboss
cmdb_ci_appl
cmdb_ci_application_software
cmdb_ci_circuit
cmdb_ci_cluster
cmdb_ci_comm
cmdb_ci_computer
cmdb_ci_computer_room
cmdb_ci_crac
cmdb_ci_datacenter
cmdb_ci_db_db2_instance
cmdb_ci_db_instance
cmdb_ci_db_mssql_instance
cmdb_ci_db_mysql_instance
cmdb_ci_db_ora_catalog
cmdb_ci_db_ora_instance
cmdb_ci_db_syb_instance
cmdb_ci_desktop_software
cmdb_ci_disk
cmdb_ci_dns_name
cmdb_ci_esx_server
cmdb_ci_file_system_nfs
cmdb_ci_hpux_server
cmdb_ci_infra_service
cmdb_ci_ip_address
cmdb_ci_ip_device
cmdb_ci_ip_network
cmdb_ci_ip_phone
cmdb_ci_ip_router
cmdb_ci_ip_switch
cmdb_ci_linux_server
cmdb_ci_msd
cmdb_ci_netgear
cmdb_ci_network_adapter
cmdb_ci_osx_server
cmdb_ci_pdu
cmdb_ci_peripheral
cmdb_ci_print_queue
cmdb_ci_printer
cmdb_ci_rack
cmdb_ci_server
cmdb_ci_service
cmdb_ci_snc_component
cmdb_ci_solaris_server
cmdb_ci_spkg
cmdb_ci_storage_server
cmdb_ci_unix_server
cmdb_ci_ups
cmdb_ci_ups_power_eq
cmdb_ci_vm
cmdb_ci_vmware_instance
cmdb_ci_vpn
cmdb_ci_web_service
cmdb_ci_web_site
cmdb_ci_win_cluster
cmdb_ci_win_cluster_resource
cmdb_ci_win_server
Connected by::Connects
Connects to::Connected by 1 56 6 1 2 1 7 10 53 ## 7 ## 9 1 2 14 14 6 62
Contains::Contained by ## 3 1 11 12 3 1 32 26 1 11 8 1 1 1 ##
Cools::Cooled By 6 27
DR provided by::Provides DR for 1 1
Defines resources for::Gets resources from 1 1
Depends on::Used by 5 ## 4 22 2 ## 1 ## 7 1 87 ## 15 2 2 2 12 ## ## 5 8 ## 2 57 53 13 1 6 5 2 ##
Exchanges data with::Exchanges data with 1 1
Hosted on::Hosts 1 4
Houses::Located in 23 4 3 1 3 1 2
IP Connection::IP Connection 1 1 3 5 3 41 29 ## 11 17 2 2 1 2 22 43
In Rack::Rack contains 1 3 2 10 34 18 17 1 8 20 68 ## ## 8 5 5 18 ## 85 6 ##
Located In::Contains Room 1 10 14 1 4 5
Located in::Houses 39 ## 25 3 11 4 1 3 25 ## 9 14 ## 1 ## 10
Managed by::Manages 32 1
Members::Member of 6 4 1 29 1 10 1 7 28 ## 1 4 65
Powers::Powered by 1 ## 2 22 1 1 ## 2 1 ## 65 2
Receives data from::Sends data to 6 2 3 17 1
Runs on::Runs 2 ## ## ## ## 2 4 4 8 ## 1 1 ##
Used by::Depends on 2 52 54 ## 1 2 ##
Used by::Uses
Virtualized by::Virtualizes 1 4

Heatmaps of Relationship and Tag Coverage

How long does all of this take?
• Identify the area(s) you want to mature – start point
• Identify and define the data fields you will need to make those
sections of the model consumption driven – 1-10 days
• Get extracts from the potential data sources and map the data
fields- 1-10 days
• Measure for data maturity/fit 1-5 days
• Pick appropriate data source and implement changes

IT Transformation: Maturity-Value Curve
IT Cost
Management
Internal
Transparency
External
Transparency
Demand
Management
Portfolio
Optimization
Value
Maturity
o Improve data quality
at the source
o Leverage assumptive
data to fill in gaps
o Determine TCO of
technology silos
o Compare costs to
industry peers
o Improve vendor
management
o Improve data quality
and completeness
o Determine TCO of IT
Business Capabilities
and Processes
o Analyze utilization
rates to identify
consolidation
opportunities
o Leverage cost
benchmarks to reduce
capability costs
o Begin to balance cost
with quality
o Implement
chargeback or show-
back via Bill of IT
o Communicate cost,
quality and value
trade-offs (levers)
o Work with business
leaders to determine
most cost-effective
Business Capability
and Application
Portfolio
o Justify or delay
investments based on
utilization and
expected ROI of IT
services
o Model demand for
products and
capabilities based on
forecast business
change or as a
reaction to changes
o Integrate accurate IT
costing into business
and product portfolio
planning cycles
o Cost-effectively
source IT (internally
or externally) based
on real-time business
demand
o Measure 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
o Restructure IT
Capability portfolio to
maximize business
value based on
changing business
needs
Value to IT (innovation)
Business Value (growth)

Discussion
Follow up questions?
Nan Braun
nbraun@thavronsolutions.com
(877) 462-6290 / http://thavron.com /@ThavronSol

Thavron maturing to consumption based models

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