2019 TBM Council Awards
Innovator of the Year
Up until 2017, global banking powerhouse Credit Suisse’s IT department was a bit of an island. IT wasn’t isolated from the rest of the organization, but it wasn’t particularly well integrated either. The main issue driving a wedge between IT and the business was IT’s focus on delivering products as opposed to services.
The IT infrastructure model was re-architected to offer clients end-to-end services instead of individual products. A key component of this effort was transforming IT’s financial management through the adoption of TBM and Apptio, which served as the foundation for a service-based financial management framework that automated IT budgeting and forecasting.
As a result, IT is now in a better position to make spending prioritization decisions, investment choices, and set service levels in by consulting with the business and IT. This closed-loop process aligns service demand to costs while enabling proactive management of IT’s finances.
Overall TBM Excellence
With over 280,000 employees, 9.1M military veterans receiving services, 167 hospitals, 1,400 community care centers, 53,000 VA-licensed healthcare providers in all 50 states, and an annual budget of $200B, the VA is, by any measure, a massive, sprawling organization. And, like most organizations of this size, understanding where its $4B in annual IT spending was going and the benefits the VA was getting in return, was elusive.
As with most IT organizations trying to get a handle on costs, Gaddis and his team relied on spreadsheets to track spending. They also employed activity-based costing (ABC) in an attempt to link IT costs to the services they were providing to veterans and the cost pools and general ledger entries accounting used to track their spending.
To change this dynamic, Gaddis went in search of a tool to automate the process. That is when he discovered Technology Business Management (TBM). Shortly thereafter, in 2018, the US Office of Management and Budget (OMB) mandated that TBM be used government-wide by 2022 to track and manage IT costs. That put the VA well ahead of the game. Because of their head start, they are now being looked to as a mentor for other agencies as they begin their TBM journey.
Financial Management Excellence
Like so many IT departments before them, the ability of First Citizens Bank’s IT organization to positively impact the business was being hampered by its inability to link business value to the dollars it was spending.
In search of a solution to using, the team sent technology finance consultant Robert Winchester to the 2014 TBM Conference in Miami. During the day he took part in keynotes, networked with fellow attendees, and attended sessions. By night, he was busy (somewhat ironically) working on the spreadsheets for the bank’s 2015 budget. That’s when he realized there was a better way.
Because of TBM’s ability to lift the lid on the black box of IT spending, Apptio is now IT’s system of record for all of IT’s finances. And, since Apptio continuously updates reports with new data, IT finance no longer has to spend days just populating reports to present to management. Since implementing Apptio, IT actuals have come within one percent of forecast for the past four years.
Cloud & Hybrid Excellence
For the last 150 years, Pearson has been at the forefront of helping people learn. With operations in 70 countries, Pearson’s 35,000 employees serve over 75 million learners from kindergarteners learning their ABCs to professionals engaging in ongoing development and training. Meeting the needs of such a diverse group of learners requires a lot of flexibility in how the company architects and provides its services. That is why Pearson has gone all-in on cloud and digital transformation.
Like most companies of Pearson’s size, cloud has become a go-to resource for expanding their technology footprint without investing millions of dollars in infrastructure, applications, and the people they would need to run and maintain it. And, like most companies that receive large cloud bills every month, they were at a loss to decipher them.
They have combined Apptio’s Cost Transparency and CCM modules to develop what they believe is the world’s first cloud RI balance sheet and P&L value calculator. This has had a major impact on overall spend: reducing month-on-month costs by a median of 7.5 percent. Instead of arguing over numbers and data, line of business owners can now see how their demands for technology, both past and present, are driving IT’s costs.
Apps & Services Excellence
As a leading global provider of location and mapping technology to some of the world’s most recognizable automotive and location-services brands, the time and money HERE IT spends on application development and product support is crucial to the company’s continued success. Understanding how this money translated into bottom-line dollars proved elusive.
By leveraging the insights provided by TBM, HERE was able to provide technology spending reports to each department that accurately reflected the true cost of the technology they consumed. The clarity these reports provided finally began to alleviate the ambiguity around IT’s numbers, while providing better oversight of HERE’s IT spend. This allowed line of business managers and the C-suite to focus on future business outcomes rather than past spending.
TBM helped HERE re-imagine IT by becoming the driving force for interdepartmental transformation. IT, Finance, and the boardroom are now aligning their previously separate focus, working closely together, and speaking a common language.
Vendor & Supplier Excellence
One of the biggest pain points in was vendor spend. PepsiCo uses hundreds of third-party suppliers to manage its operations. But with such a large global footprint, there can be a lot of missed opportunities to lower costs by optimizing this spend. Without the data and reporting to understand where their vendor dollars were going, it was a significant challenge to find areas—both geographic and service-related—where eliminating vendor overlap and increasing their engagement with strategic partners could lower costs.
Since implementing TBM, PepsiCo has been able to reallocate millions of IT dollars from run-the-business to grow-the-business initiatives. Through reporting, they work with the business to decide where those savings will be reinvested. Digitalization, eCommerce, business process automation, and updating communications and collaboration platforms are all top priorities.
As an added bonus, onboarding new vendors has become a point-and-click process; vendor billing validation takes hours instead of days or weeks; IT and the business now have proactive conversations about costs and whether or not the services being billed for were delivered as promised.
Business Value Realization Excellence
With the rise of mobile devices, apps, and high-speed networks, the days of branch-office visits and store-to-store comparison shopping are waning. In this environment, staying competitive means continually rethinking how to attract and retain customers, and enabling them to do business on their own terms. For State Farm, this was more challenging because IT, the business, and finance didn’t understand the IT cost structure or what was driving those costs. Then they implemented TBM and Apptio.
The Bill of IT is one part of State Farm’s TBM implementation, at the heart of which is Apptio’s Cost Transparency module. Cost Transparency lifts the veil on IT spending by showing how technology spend is connected from the general ledger, through IT’s services and infrastructure to the application layer – and ultimately to the service itself.
In the past three years, IT cut $130M in storage costs. And with further insights into infrastructure costs, consumption, utilization, and capacity, they delayed or eliminated the purchase of additional hardware, software and service contracts in multiple areas, saving both CapEx and OpEx dollars.