Organisations who have implemented Technology Business Management (TBM) and Apptio quite quickly can arrive at the “where has all the money gone” question? . At this point stakeholders can become sceptical, untrusting or even hostile (?!) when it becomes clear that the Apptio cost model isn’t showing all of the incurred spend at EVERY model layer?
Stakeholders, particularly in the Finance function, can become very focussed on the successful allocation of all spend from “bottom to top”; – I’ve often been asked “How does Apptio and TBM deliver value if I cannot see all the spend?” The answer lies in proving that poor data quality is not an inhibitor to actionable insight.
The Ungoverned Spend concept
So, we developed the concept of “Ungoverned” spend. We really wanted to challenge perceptions around missing actual spend from the cost analysis model (aka “model breakage”) and put data quality into the spotlight – in line with the challenges being levied by stakeholders. We believe the best approach is to draw stark attention to the money not being allocated and frame this fallout as money being spent but not understood, hence the use of the word “Ungoverned” – this is deliberately provocative, IT and the Business is being challenged to justify every £/$/€.
We decided to introduce a dedicated object, categorisation and reporting to expose these fallout costs. We started by focussing on the major TBM Technology objects – IT Towers, Servers, Desktop, Apps/Systems and Networks. We then created a unique object table that allowed fallout money within each of these categories to be consolidated into Ungoverned services. These services can be used to drive reporting through the service catalogue, putting into clear contrast the cost of understood and misunderstood services. The result is that Executives responsible for consuming the IT services and bearing their costs can now clearly see where there are cost allocation and analysis gaps, how material they are and decide what action needs taken.
Expose
By exposing this uncontrolled spend your Cost Management team are able to engage the right people to help plug the model fallout gaps, provide better quality data and also improve your cost allocation methods. Typically, once these issues are highlighted Executives want to act quickly. We’ve seen reductions in “Ungoverned spend” of 50% within 3 months. Also, previously sceptical TBM stakeholders start to understand that data quality is a journey, and that actionable insights even without all of the IT incurred spend assigned all the way to the top of the Apptio cost model.
This process drives one of our key mantras when helping clients deliver a TBM ecosystem: Significant business value and improved cost management can be achieved without 100% perfect data: 50% actionable is better than 100% unactionable..
I wish you luck in your own IT Cost Management journey, and if you want any more info on what ITSS can deliver please get in touch.
Simon Voisey is a TBM Consulting Partner at ITSS Limited
ITSS Limited provides IT Cost Management consultancy, Technology Business Management (TBM) advisory and implementation services including and is an Apptio Partner.
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