"This is the first part of the IT financial management series. In this webinar, Charlie Curcio, IT CFO shares his experience in defining what it means to Run the Business of IT. On average companies spend 5% of the total operating budget on IT, increasing pressure on executives to reduce costs, communicate value and align IT investments with business priorities to drive a competitive advantage. Today, many high performing IT organizations are adopting Integrated IT Portfolio Analysis (IIPA) best practices to effectively Run the Business of IT. Developing a holistic data model and financial framework is key to driving transparency across disparate IT domains and providing accurate and reliable metrics to enhance decision making."

2. Agenda
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•
•

4. The IT Landscape
How is IT perceived in your organization?

5. Best Practice Disciplines
Running the Business of IT
Strategy
IT
Governance
Financial
Mgmt.
Resource
Mgmt.
BI & Metrics

6. Strategy
• Multi Year
Roadmap
• Business
Alignment
• Architectural
Blueprint
• Capital
Allocation
IT
Governance
• Program/
Project Mgmt.
• Strategic
Alignment
• Capacity
Mgmt.
• ROIs /
Lookbacks
• Risk Mgmt.
Resource
Mgmt.
• Tools
• Training
• Certification
BI &
Metrics
• Outcome
based
• Service Level
Agreements
• Ratios
• Benchmarks
• Dashboards &
Reports
Financial
Mgmt.
• Efficient and
Effective
• Smarter and
more focused
• Accountability
• Information
Mgmt.
• Transparency
Best Practice Disciplines
Drill Down

7. Keys to Financial Transparency
Change the conversations with the business
• Consistency and simplicity
• Actionable metrics and
scorecards
• Understanding of key
variable costs and service
offerings
• Understanding of fixed costs
and opportunities to
influence
• Increased variability of
expenses
• Informed decision making
• Proactively manage across
the entire IT Portfolio
• Enhanced ability to do
planning and forecasting
• Focus on providing insight
and analytics instead of
explaining the Chargeback
• Industry benchmarks
Goals Benefits

8. The IT House
Demystifying IT Financial Management
Maintenance&
Break/ Fix
Development
Projects(New /
Enhancement / L&R)
Services
Efficiency&
Performance
Tuning Projects
Applications
Infrastructure
Efficiency & Availability
Optimize
Create
Capacity

9. Polling Question
Select the answer that best describes your organization’s
IT Financial Management(ITFM) status
A. We have implemented an ITFM process and
tool
B. We have started to implement an ITFM process
and tool
C. We intend to start implementing an ITFM
process and software
D. We have no plans at this stage

10. Average 2012 IT Spend
By Applications, Infrastructure & IT Management
35%
55%
10%
Applications
Infrastructure
IT Management
Gartner
IT Metrics: IT Spending and Staffing Report, 2013

11. Gartner Defines Emerging Market
From IT PPM to Integrated IT Portfolio Analysis
•
•
•
•
UMT positioned
as Visionaries in
Gartner’s 2012
IIPA Magic
Quadrant

13. Data Management Strategy
Key Challenges

14. Application Side of the House
Average 2012 IT Spend - Cost Drivers for
Applications
35%
55%
10%
Applications
Infratsructure
IT Management
46%
54%
Gartner
IT Metrics: IT Spending and Staffing Report, 2013

15. Applications
Getting to the Next Level
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
 Integrated IT Portfolio Analysis
 Drive Value Creation
 Value Creation / Value Sustaining Ratio
 Drive Down Unit Cost and Create Capacity
 Better Integration with Infrastructure
 Application Rationalization
 Total Cost of Ownership (Run / Maintain)
 Decomplexing the Environment

16. Applications
The Building Blocks
Actionable Information
Portfolio Alignment/Capacity/# of Projects/Key Initiatives/
Development Life Cycle/Sourcing Ratio
Unit Cost/Projects on Time/Budget
The Right Data Elements
Employee Labor
Consultants/Software
Programs/Resources by project
Data Quality
Resource Utilization
Time Reporting – Is everyone reporting? Overtime?
Spend Buckets – New, Enhancements, Legal & Regulatory, Maintenance
Maximizing Accounting for SOP 98-1 – Well defined Phases
Project start / end dates

17. Infrastructure Side of the House
Average 2012 IT Spend - Cost Drivers for
Infrastructure
40%
21%
8%
12%
19%
Data Center End-User Computing
IT Service Desk Voice Network
Data Network
Gartner
IT Metrics: IT Spending and Staffing Report, 2013
35%
55%
10%
Applications
Infrastructure
IT Management

18. Infrastructure
“Running the Factory”- Today
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

19. Mainframe
Z/OS
Z/Linux
Distributed
App
Hosting
AIX
VM
Wintel
Storage
Distributed Tier 1
Distributed Tier 2
Distributed Tier 3
Output
Processing
Cut Sheet
Continuous Feed
Fiche
Comms
Personal Comm (email)
Citrix
Office Comm
Desktop
PC Asset
Blackberry
Metered Services
Infrastructure
Moving to the Next Level
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20. Keys to Data Management
Across all IT Domains





21. How important are those Data
Management





23. IT Executives Need a Management System
IIPA = ERP for IT
Enterprise resource planning (ERP)
systems integrate internal and
external management information
across an entire organization—
embracing finance/accounting,
manufacturing, sales and service,
customer relationship management,
etc. ERP systems automate this activity
with an integrated software
application. The purpose of ERP is to
facilitate the flow of information
between all business functions inside
the boundaries of the organization
and manage the connections to
outside stakeholders.[1]
Wikipedia (1) Bidgoli, Hossein, (2004). The Internet Encyclopedia, Volume
1, John Wiley & Sons, Inc. p. 707

24. Building an Effective IIPA Solution
Approach & Outcomes
• Industrial strength,
repeatable and scalable
• Overcome the obstacles
around people, process and
technology
• Reporting capabilities
• Metrics and insights
• IT Dashboard
• Build an IT Asset Inventory
• Develop Transformation
Roadmaps
• Enhance financial
transparency
• Improve Chargebacks
• Scenario Analysis
Approach Outcomes

25. The IT Financial Maturity Curve

26. Engage the IT
Finance Team
Develop a Data
Strategy Framework
Create a “Heat
Map”
Prioritize the Pain
Points
Develop an Action
Plan
Getting Started
A Phased Approach Works Best
Data Definitions
Consistency
Business Cases Cost
Management
Application
Portfolio
Management
Too Many
Spreadsheets
Reporting
Service/Infra-
structure Charge
backs
Budgeting/
Forecasting

27. Getting Started
A Phased Approach Works Best
• Develop Standard Template
• Set Cost Thresholds
• Review at Governance Committee
Business
Cases
• Develop Service Catalog
• Map Unit Costs
• Create Shadow Billing
Service
Chargeback
• Set Acceptable Ranges
• Require Variance Explanations
• Introduce “Sweep the Saves” Program
Forecasting
Engage the IT
Finance Team
Develop a Data
Strategy Framework
Create a “Heat
Map”
Prioritize the Pain
Points
Develop an Action
Plan

28. Increase the
strategic
value of IT
Maximize
Value
Creation/
Sustaining
Ratio
Sustained
Efficiency &
Effectiveness
Transparency
Drive
Revenue &
Earnings
Growth
A High
Performing
IT
Organization
What’s the Prize?

29. Call to Action…
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30. What should I do Next?
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31. Demystifying IT Financial Management
Register for next webcasts in the Series
www.umt.com

32. Questions & Answers