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CIOs embrace SaaS-based TBM to quantify IT’s value

Clint Boulton | Dec. 7, 2017
More CIOs are turning to Apptio’s analytics service to automate technology business management (TBM), a framework for aligning the value of IT services with the cost to produce them.

"Apptio put information in the hands of the people responsible for spending and budget," Imhoff says. “It enabled us to change the conversation with our businesses.” Imhoff says he cut over $20 million from IT expenses, which Maritz used to fund acquisitions and refresh a legacy platform. Imhoff followed the initial savings by trimming an additional 5 percent, or $3 million in IT costs, which he then reallocated for spending on cybersecurity.

"It's really great when you don't have to go to the CEO or the CFO and say, ‘I need an additional $3 million to bolster cybersecurity,’" Imhoff says. "And you can say, ‘I'll self-fund it.’"

 

Using TBM to swing the pendulum

In 2012, Chevron’s Amy Absher was feeling pretty good. Business was booming and the company was hiring across the board. Moreover, the Chevron general manager of technology, strategy and services had delivered over $1 billion in transformation value after winnowing applications from 14,000 to 5,000 and reducing the energy giant’s project portfolio by 30 percent.

But as it happens so often in the cyclical oil and gas sector, the pendulum swung the other way. The market turned and IT costs rocketed. Absher, acting on a tip from then Cisco CIO Rebecca Jacoby, elected to use Apptio to improve the transparency of IT costs and services consumed. “She painted a powerful picture of a management system to manage the upturns and downturns and give us transparency and a system of accountability,” Absher says of Jacoby.

Absher first installed Apptio in Chevron’s central IT unit, which governed large-scale utilities and ERP systems, before applying it to embedded IT groups at the edge, which were focused on generating innovation to support growing business demands. In 2014, Chevron built its first chargeback model to show the costs of IT services, hardware and software to the business unit in which they are used.

“Our biggest priority was improving transparency and being able to have more productive conversations about billing and recovery so people can understand the cost of what they were consuming,” Absher says. Eventually, Absher hopes Apptio will help Chevron analyze the costs of an entire service rather than simply the IT component.

 

Fiscal transparency through SaaS-based TBM

TBM is old hat for Greg Morrison, CIO of $20 billion Cox Enterprise Group, which operates automotive, cable and media businesses. In the 1990s, Morrison began using TBM in a prior role at Prudential, where he learned the importance of cost transparency while providing shared IT services to the business.

Morrison brought the same discipline with him to Cox, where he became CIO in 2002 and opted to build his own shared services model. TBM was manual and spreadsheet-based. He created a taxonomy to align value with IT services and worked through the challenges of allocating all of the costs associated with the service catalog.

 

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