Achieving IT Cost Optimization and Business Intelligence – A Financial Management for IT Services Solution Seminar (4 hours) Charles Williams, Principal
KEDAR Information Technologies, Inc.
The swiftness of the recent economic downturn has caught many companies flat-footed – they typically have a growth plan, but not a survival plan. Management reacts by reducing costs to conserve cash. But ramping back on production, supply, and sales is a time-consuming process, and the need to respond is often immediate. For the CIO, that means deep budget cuts and the need for a structured process to determine quickly and accurately how to:
• Translate internal and external demands for IT services into changes in IT workload
• Validate that the budget — current and proposed — is adequate to support internal and external demands for IT services
• Measure the effective application of IT staff skills and energy
Many CIOs address these questions from personnel costs only. They achieve a percent cut or actual cost target based on operating expenses and head count. Their due diligence is composed of subjective organizational rankings of personnel by job criticality and skills needed. Unfortunately, this approach is conjectural, and does not directly determine:
• Do I have an effective way to quantify how a business change affects IT workload?
• Do I have sufficient resources to support internal and external demands for "belt-tightening?”
• What if the proposed budget reduction does not allow for enough personnel to satisfy the business demand for IT services at expected or required service levels?
Fortunately, the Financial Management guidelines and best practices for IT Services documented in the ITIL framework don’t require an implementation of all disciplines. This means that you can take advantage of IT Financial Management best practices now, even if you have not yet (or only recently) initiated ITIL. How does an IT organization get away from reactive, unscientific guesswork? One way is to implement instead the Information Technology Infrastructure Library (ITIL) framework’s IT Financial Management practices to predict current and future keep-the-lights-on activities and costs, and the impact of change? Effectively implementing the ITIL framework’s IT Financial Management disciplines requires a capacity based planning model approach that (1) aligns IT workload activities to business needs, (2) defines IT workload drivers and related activity cost, and (3) provides the capability to quickly and accurately define current costs, and to estimate the impact of change. This session will describe this new Information Technology (IT) cost modeling solution.
Managing Technology Costs During Major Transitions Seminar (4 hours) Denis Picard, Managing Director
Alvarez & Marsal Technology Asset Management Services, LLC
The objective of this seminar is to provide participants with the language, tools and techniques to effectively manage IT costs during major transitions such as divestitures, mergers & acquisitions and bankruptcy. Senior executives and IT finance professionals face significant challenges during these major transitions, including unfamiliar legal requirements, non-recurring costs, difficulty maintaining service levels during the transition period, and the need to execute transformative change under severe time constraints. This discussion will cover a broad range of topics, including:
• Negotiating and managing Transition Service Agreements
• Cost considerations, including technology agreements and licenses
• Managing technology asset transfers, including software, hardware, and telecommunications
• Avoiding "stranded costs”
– Operating costs
– Transition costs
• Other specific topics of interest to participants anticipating (or participating in) a divestiture, acquisition or bankruptcy
Chargeback Implementation for a Cloud Hosting Company Workshop (4 hours)) Vinit Sharma, Senior Consultant
VMware UK Limited
This workshop aims to demonstrate a proof of concept for a fictional Cloud IT service provider offering a virtual platform to its customers. There are many hosting companies that provide IT services for organizations and their business models must utilize charging models that are accurate and transparent in order to be successful. The aims of this workshop are to illustrate an implementation methodology using various tools, questions and software. A combination of theory and hands on experience will be possible through an interactive workshop style, utilizing tools and software to run through a short proof of concept for a fictional virtual hosting provider.
Asset Management Best Practices for Information Technology Seminar (3 hours) John Fulton, Director of Product Management, CA, Inc.
Chris Evanoff, Prinicipal, Soltec, Inc.
Chalapathi Kotnana, IT Management Consultant, Booz Allen Hamilton
Ensuring a Successful IT Asset Management Program
Learn about the common pitfalls many organizations face when implementing an IT Asset Management (ITAM) program. This session will cover the best practices around avoiding these common pitfalls to ensure a successful ITAM program best positioned to mature and optimize asset investment while mitigating risk.
Integrating Procure-to-Pay Best Practices with Technology: This session addresses the principles and benefits of today’s leading best practices for the procure-to-pay (P2P) process as well as specific technology enablers to achieve world-class procurement and disbursement performance. Procure-to-pay refers to the business processes that cover activities of requesting (requisitioning), purchasing, receiving, paying for and accounting for goods and services. Incorporating technology enablers in conjunction with business practice changes will dramatically reduce procure-to-pay costs, while minimizing the investment and significantly improving ROI. Whether your company has begun the process of technology selection or already selected a product, careful consideration needs to be given to evaluating existing practices with the identification and adaptation of proven best business practices currently utilized across many industries.
IT Investment Analysis using Financial & Non-Financial Techniques: All of the IT key stakeholders, such as business unit leaders, IT executives, CIOs, CFOs and board members who make significant investment in IT need to leverage financial and non-financial techniques and frameworks to evaluate IT investments to receive high returns while deploying scarce resources. Justification of IT investments is not as straightforward as any other business investments. Benefits are apparent on a personal basis. However, measuring the value of IT investments contributed to the bottom-line is often not measured. The ROI of this presentation enables you to understand IT investment analysis rationale, the various financial and non-financial techniques, identification of appropriate techniques, and other qualitative techniques to evaluate the investments. You will gain the ability to apply these techniques with little homework. At a minimum, you will be able to acquire insight and financial acumen to quantify and communicate the value derived from IT investments. You also will be introduced to Val IT Framework and Investment Management processes.
Service Catalogs and the Business-IT Alliance Workshop (3 hours) Eugene Lukac, Specialist Leader
Deloitte Consulting LLP
IT organizations often face a painful dilemma. On the one hand, they are pressured to reduce costs to satisfy corporate mandates. On the other hand, they are pressured to expand services to keep up with the growing reliance on information technology. The choice between unhappy corporate executives and frustrated business managers is no choice at all. Fortunately some organizations have found a way out of this dilemma. By making explicit the business value of IT activities, they have been able to change the conversation from cost-reduction to value-acquisition. And they have transformed the perception of IT from cash drainer to value provider, thereby putting IT on the same footing as most other business units.
A key instrument of the transformation has been the IT "service catalog,” listing in business terms the services that IT is willing to provide to the business, and the unit price of each. As a result of using the service catalog as the foundation for communicating with its customers, IT organizations have strengthened the business-IT alliance and earned new appreciation for the value they provide to the business. This highly interactive session will cover:
• The IT value chain: mapping IT investments to shareholder value
• The various ways IT contributes to the business
• Defining the business-oriented service catalog
• Constructing a service catalog (illustrated with real-life examples)
• Implications for IT: designing IT from the outside in
• Enlisting business support in managing IT costs
• Service level agreements in the context of service catalogs
Accelerate Delivery of IT Financial Management Initiatives with Agile Project Management Tools Seminar (3 hours) Jason Tanner, Senior Chargeback Consultant
Agile Project Management is a variant of iterative life cycle where deliverables are submitted in stages. The difference between Agile and iterative development is that the delivery time in Agile tools is in weeks rather than months. Agile Project Management tools provide a growing number of organizations with speed and flexibility to deliver business value faster. Through continuous inspection and adaptation, collaboration, prioritization of work by business value, timeboxing and leveraging the power of teams, Agile Project Management tools may be applied to any financial project. This seminar introduces the values, principles and techniques to begin using Agile Project Management tools for IT Financial Management initiatives. The seminar includes discussion, interactive exercises and the tools and templates to get started after the conference.
Trends in Tools and Disciplines for IT Financial Planning and Analysis Seminar (4 hours) Bob Simko, Executive Director and Brian Jeffery, Managing Director
International Technology Group
IT Spending Trends: This session will review the state of IT expenditure more than a year into the current recession. It will look at where organizations are cutting and, in some cases, increasing expenditure, and will examine spending patterns by areas of technology and IT operations. The session will also review the outlook for short-term as well as long-term IT investment.
New Trends and Approaches in Budgeting: Economic pressures have caused a growing number of businesses and public sector organizations to review their processes and tools for budgeting, forecasting and planning. This session will outline current trends and debates in this area, and will discuss how budgeting processes are changing. The extent of moves away from spreadsheet-based techniques and adoption of more sophisticated Business Performance Management (BPM) tools will be covered.
Information Economics – New Trends and Opportunities in Business Intelligence: Business Intelligence (BI) refers to skills, processes, technologies, applications and practices used to support decision-making. BI technologies provide historical, current, and predictive views of business operations. Declining costs for BI tools are opening up new applications, and making high-performance solutions increasingly affordable. This session will examine changes in the BI tools and applications, and will outline new opportunities to exploit the value of better information for bottom-line gains in business in general, and finance in particular. Trends will be illustrated by the results of new ITG research on changing BI demand patterns in large and midsize organizations.
Trends in Metrics for Cost-Benefit Analysis: This session will review recent trends in the use of Return on Investment (ROI), Total Cost of Ownership (TCO), Balanced Scorecards and other IT cost and benefit measurement techniques. User experiences with these will be discussed, and the strengths and weaknesses of different approaches will be outlined. The session will conclude with recommendations as to how users should decide which metrics, or mixes of metrics are appropriate for their own requirements.
The Changing Role of IT Chargeback & Cost Allocation Solutions Seminar (4 hour) Robert Mischianti, Vice President
Whether you are using an IT developed or off-the-shelf package, the role of your solution for IT Chargeback and Cost Allocation is being pressed to change and expand. Several different forces, including demand for better visibility, virtualization, cloud computing and overall market conditions are creating a demand for expanded functionality within these applications. Many traditional IT Chargeback systems were built for cost recovery. Now, users require a more robust tool that will play an expanded role as a decision support tool. New requirements include better visibility into costs, expanded metrics, integration with budgeting and forecasting and more. Many IT finance departments are getting bogged down augmenting their existing application with manual processes to meet new requirements. Spreadsheet and desktop database applications are being overused to support critical IT financial processes.
What to Measure and How to Measure IT Workshop (4 hours) Michael Bitterman, Founder
IT Performance Management Group
Business Intelligence, Business Process Management, Portfolio Management, Customer Relationship Management, Earned Value Analysis, Balanced Scorecard and on and on and on. These are all great tools now available to the IT professional for analyzing and reporting on process and performance. However, much like a builder with all the necessary tools, he can’t build the house without a set of plans. Or, better said, he can build a house, but it may not turn out to be the house you had in mind. At this workshop, you will learn how to determine and select the "right” set of measures for your organization in order to utilize the tools that have been made available. Without an understanding of "what” to measure, most of these tools will simply allow you to more quickly and elegantly, come to the wrong conclusions.
Integrated Service Financial Management for Financial Managers Workshop (3 hours) Steve Middeldorp, President
This workshop will deliver a practical guide to incorporating financial management processes into the service management structure of the IT group. It will take you through the best practices in building a robust model to determine true cost of services delivered and show you how to equitably relate those costs to the end-user. It will focus on the use of the methodology to derive performance metrics and market comparative data, both of which form key information required by CIOs. The workshop will cover:
• Building strong and understandable budget submissions linked to demand for services
• Developing IT costing and pricing strategies to best suit the organization
• A low maintenance approach to Activity Based Costing and Budgeting
• Building activity catalogues (what IT does) and service catalogues (what IT delivers) with the activity catalogue being central for costing, performance metrics and time sheet systems
• Understanding and managing the effort required for a successful implementation and ongoing management of a commercial approach to financial management of the IT function
• ITIL: working with good service financial management (pricing your Service Catalogue, applying a financial profile to your CMDB, and more)
• The role of service pricing in project ROI, KPIs for IT group performance, governance process assessments and as a common language between IT and the end-user
• Incorporating specialized IT software tools into the budget and financial management processes (ClearCost, SAS vs. bespoke Excel/Access)
Best practice dictates that IT financial management, including costing, pricing and chargeback, must be seen as a service management function and not just a job for finance. With this knowledge, steps can be taken to manage unit cost and prices, while maintaining high quality. This adds great economic value to your customers and the entire corporation. This workshop will be structured to provide you with the knowledge to begin developing a very effective costing, pricing, and planning infrastructure for your IT organization. Not only will you get advice and case study examples from this workshop, but you will have the opportunity to gain knowledge that will enable you to begin an implementation. The workshop will be very interactive, so come ready to discuss, learn and develop effective cost management solutions for improving your service delivery.
Quick, Easy and Effective Results for Quantifying IT Value using ABC/M Workshop (3 hours) Andrew Muras, Senior Manager
BAE Systems Analytical Solutions
CIO Magazine recently asked whether IT organizations were prepared to provide a quantitative view of their value by explaining and defending their costs, why they were spent and how they benefited the business. Those IT organizations using activity based analysis processes are usually able to answer those questions quickly and simply.
Many consider activity based costing & management (ABC/M) as solely a tool for financial analysis and costing. However, when used correctly, ABC/M provides a suite of tools and techniques that serve as the backbone for much of what you need to quantify value and "run IT like a business.” ABC/M is most effective when used as an operational tool for everything from defining and pricing services and chargebacks, to developing metrics and scorecards, to defining a continuing improvement program. Integrating these business processes through ABC/M will not only help determine your success, but also improve your ongoing relationships with upper management, clients and customers, as you can quickly answer just about any business question they pose.
Through a carefully designed program of lecture and hands-on case study exercises, this workshop provides both the theory and practical experience for rapid and effective implementation of ABC/M to help define the value of your organization. The objective for this workshop is simple: learn what practices truly work to give you actionable results quickly; how and where you should start; what’s meaningful to your customers as well as operational managers; linking efforts synergistically. Participants will get experience with actual ABC/M software and analytical techniques during the workshop and will have full use of the software for their future implementations.
Each participant is asked to bring a wireless laptop for accessing the free ABC/M software tool. In addition, the speaker will be raffling off copies of his recently published book, Process Improvement and Performance Management Made Simple. Go to www.simpleprocessmgmt.com for more information about the book.
Map of This Conference: How the Topics All Fit Together Workshop (3 hours) N. Dean Meyer, President
ITFMA’s program of four conferences offers a wide assortment of topics over the next three days. To get the most out of your conference experience, you'll want to focus on the sessions that best address your most pressing issues. This workshop begins with a questionnaire that helps you pin-point what challenges you'd like to focus on during the conference. Then, it will lay out all the IT finance and governance processes -- and most of the conference topics -- all on one page. This "Big Picture" will help you sort out which of these processes (and which sessions) are most critical to your particular concerns; how all the processes fit together into a total system of governance; and where the highest-payoff next step is within your own IT finance strategy.