THE WORLD OF
IT FINANCIAL MANAGEMENT
Conferences, Workshops and Seminars
June 25-29, 2007
Mirage Hotel & Casino • Las Vegas, NV
Other Las Vegas program agendas:
Conference Registration and
IT Financial Management Basics for CEOs, CIOs and Controllers Seminar (4 hours)
Charles Johnson, President & CEO, CNJohnson & Associates and
Penny Collen, Director, PL Collen & Associates
An Overview of IT Financial Management. Every enterprise experiencing significant IT expenditures needs to adopt a variety of critical financial disciplines in the effective financial management of their IT organization. Strategic planning, capital budgeting, project planning, project evaluation, project tracking, expense budgeting, expense reporting, activity-based cost management, product and service pricing, chargeback, resource planning, asset management, benchmarking, and balanced scorecard are discussed as essential elements to IT financial management.
IT Finance and Budgeting Roles and Responsibilities. Universities have been educating their students about corporate financial management for decades, but the typical college graduate has no idea what IT financial management is all about. This session discusses how IT finance differs from corporate finance. The typical IT finance and budgeting organization and the responsibilities of its personnel are described. Experience a typical day in the life of an IT finance practitioner and learn about the most common IT budgeting and cost accounting concepts.
IT Financial Terminology and Concepts. This session compares and contrasts financial accounting and managerial accounting. Many of the fundamental cost accounting terms are defined and discussed. The concept of cost allocation is explained in terms of its role in financial reporting and analysis.
IT Cost Measurements and Techniques. This session describes the various types of IT costs required for financial planning, controlling, pricing, evaluation, and decision-making, (e.g., resource costs, activity-based costs, product (business unit) costs, decision-making costs, etc.). Examples of how to compute these various costs will be illustrated.
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Cost Determination, Rate Setting, and Cost Allocation Plans for State Government Information Technology Agencies (4 hours)
Kenneth Hoffman, Principal
Kenneth F. Hoffman, Inc.
Basics of Internal Service Funds, State Government Chargeback Policies, OMB Circular A-87 and the ASMB C-10 Guidelines. Introduction to the fundamental accountancy and enabling legislation for state government proprietary funds for central services, state policy choices for the recovery of costs for billed central services, and brief review of the annual Federal statewide central services cost allocation plan negotiation process and its related regulations, cost principles, and cognizant agency guidance.
Determining the Costs of Information Technology Services. Consideration of model procedures and formats for the annual prospective and retrospective determination of information technology costs for particular services, the use of such information in the rate setting and cost recovery process, comparing actual costs of particular services with their actual and imputed revenues, and the role of cost determination models in the statewide central service cost allocation plan.
Federal Review of Information Technology Cost Allocation Plans and Related Billing Issues. Technical issues arising from billing Federally-assisted customer agencies on a prospective basis through the use of unit billing rates, reconciliation of retained earnings under OMB Circular A-87, returning the Federal share of "excess" retained earnings, issues with regard to capital replacement and outlay, depreciation, unallowable costs, non-operating transfers, service level agreements, discounts and surcharges, and related billing problems.
Recent Administrative Appeals and Cases. Review of the appellate procedures available under 45 CFR Part 16 to state agencies seeking relief from adverse determinations of the Division of Cost Allocation, and consideration of several recent decisions of the U.S. Department of Health and Human Services Departmental Appeals Board involving statewide central services agencies, retained earnings, return of profits to the Federal government, procedural error, the Administrative Procedures Act, billing rates and internal service funds.
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Top Ten Reports for Proving Your Value to Senior Management Seminar (4 hours)
Bill Hufschmidt, President and Professional Metrics Consultant
Development Support Center, Inc.
Anything can be done cheaper. But will it be done better and will it really be done at lower cost? Practical examples of metrics show business partners the linkage between IT and the enterprise. This is a collage of real reports that IT departments have used to prove multi-million dollar value and to ride the off-shoring wave.
Introduction of the Ten Dimensional Integrated Software Metrics Model. Find out how to address the key business questions of productivity, quality, cost, value and six other comparisons being missed by IT professionals today. With the introduction of the attendees, this seminar is customized based on their input and their objectives.
Estimating with Metrics, Overlooked Productivity and Quality Reporting. Do you use historical, hysterical or political estimating? See how you can estimate any project in two minutes, sight unseen, with a guarantee, as early in the life cycle as a "gleam in the boss’s eye.” Rack and stack, true quality and other examples of real reports used at real companies are discussed.
Maintenance and Staffing Metrics. Hear how to address increased time in maintenance. Are you overstaffed, understaffed or properly staffed? Hear how to "prove it.”
Proactive Insight Metrics, Doing Things Right and Doing the Right Things. Learn how to quantify: mission criticality, IT alignment and progress toward company goals, factoring in constantly changing business conditions like process maturity.
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Buffet Lunch (Not available to family/guests)
Implementing TCO for Applications (TCOA) Seminar (3 hours)
Stephen Curulla, Senior Vice President
Bank of America
In 2003, Bank of America initiated a project to implement a TCO reporting, forecasting, and chargeback process for applications (TCOA). It was to address both the data center hosting cost and the programming support cost in order to arrive at the total cost to run applications. The system was brought online in 2004, but that was when the real work began. The resulting system highlighted the need for improvement in many supporting processes including asset and inventory management, change controls, ABC costing, and demand and capacity forecasting. The speaker gives an overview of the multi-generational approach to building the tool as well as improving the supporting data and processes. The presentation is a discussion about best practices and challenges to expect. Also discussed are how TCOA forced changes on supporting data sources and processes, and how the original vision for TCOA had to be tweaked to react to changes in those supporting processes. Specific topics include:
• Goals and requirements
• Critical components of the process
• Integrating legacy data sources
• Developing a processing engine & reporting tools
• Defining roles & responsibilities for data providers & data users
• Communication and training
• Automating manual processes
• Standardizing monthly inputs & processing
• Addressing new applications & retired applications
• Volume forecasting
• Dealing with organizational change
• Dealing with changes to ABC methodologies
• Integrating with the corporate budgeting system
• Integrating with customer & product profitability systems
• Integrating with performance metrics
• Integrating technology forecasting with customer transaction forecasting
• Standardization of ABC methodologies
• Addressing infrastructure applications & resources
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Applied Information Economics: How To Measure Anything But Only What You Need To Workshop (3 Hours)
Doug Hubbard, President
Hubbard Decision Research
This workshop is an overview of the Applied Information Economics (AIE) methodology. The participants will learn how to measure virtually anything including risk and other common "intangibles”. The methods have been applied to measurement problems in business, government and the military. Furthermore, participants will learn how to use this information to optimize IT investments. The objective of the workshop is to familiarize the attendees with the basic concepts behind Applied Information Economics including how to formulate intangibles as measurables, how to think of risk like an actuary, how to assess odds and probabilities, how to look at IT portfolios from a risk/return point-of-view, how to measure just about anything, and how to tell what you should be measuring. Specific topics include:
• Introduction to Applied Information Economics & Measurement
• Understanding measurement & risk
• Calibrated probability estimates
• Monte Carlo simulations
• Findings to date: how AIE changes decisions
• Advanced concepts: beyond risk/return analysis
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The Role of the Service Manager Seminar (3 hours)
Mart Rovers, President
InterProm USA Corporation
With the increasing focus on aligning IT services and business services, organizations may determine that the existing technology-based organizational structures may no longer fit the needs of the customer. The introduction of ITIL-based best practices for process improvement to execute and optimize the delivery of quality IT services is growing in significance. With little past experience optimizing IT processes using ITIL best practices, introducing service-oriented technology architectures, or institutionalizing a service-culture in the IT organization, managers can find the IT service and business service alignment process frustrating. The speaker will provide guidance on how to raise awareness, to successfully plan, organize, implement and manage a service-oriented IT culture support, and to enforce business/IT alignment initiatives. He will provide dos and don’ts regarding such alignment efforts, from the introduction of new roles in the IT environment, such as the role of the service manager, up through the organizational structure considerations. He will share the details of the service manager’s responsibilities, address sample scenarios of improvement-upon-improvement implementations, and share a useful IT organization structure to manage your people, processes, and technology. Key learning objectives include:
• Balance your technology, organization, and process improvement initiatives equally
• Assess your current process architecture against those ITIL best practices that are most relevant to your organization by using the to-be-delivered services as your business drivers
• Agree on a roadmap to enhance your IT service-supporting tools and process architectures
• Take the iterative route when enhancing the alignment of IT to the business.
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IT Financial Trends and Strategies for CEOs, CIOs and Controllers Seminar (4 hours)
Brian Jeffery, Managing Director, International Technology Group and
Bob Simko, Executive Director, International Technology Group
The Changing World of IT Finance. Changes in focus and priorities in IT finance are discussed. Particular attention is paid to shifts in emphasis from back-office transaction processing towards distribution and exploitation of financial information, intranet-based self-service tools, Business Performance Management (BPM) and other functional areas. Changing skill set requirements are also outlined. The implications of these shifts for financial IT professionals are explored.
Financial Application Software Trends. Current trends in selection and deployment of financial application software are examined. Subjects covered include when existing systems should be upgraded or replaced, integrated systems versus "best of breed” approaches, and changes in technologies and implementation practices. Leading vendor offerings are reviewed, and the implications of industry consolidation are discussed.
New Tools and Practices for Planning, Forecasting and Budgeting. A growing number of organizations are moving beyond conventional spreadsheet-based techniques to new approaches to planning, forecasting and budgeting. But spreadsheets remain popular with end users. How should organizations deal with this situation? Potential drawbacks to and benefits of using spreadsheets are examined, and trends in user practices, tools and technologies are reviewed. Practical recommendations are given as to how users can employ spreadsheets as well as new tools to increase the effectiveness of planning, forecasting and budgeting in their own organizations.
Unsuccessful IT Strategies and Lessons Learned. This session reviews overall industry experiences with IT success and failure, and presents case studies of unsuccessful IT strategies. It discusses common reasons for IT project failure, and outlines commonalties between organizations whose IT strategies have yielded disappointing and occasionally catastrophic results. The session concludes with lessons learned, and with practical recommendations as to how users can maximize odds of success and minimize risks of failure.
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Asset Management: Value and Practical Experiences (4 hours)
Penny Collen, Senior Consultant, IBM Corporation,
Charles Johnson, President and CEO, CNJohnson & Associates,
Jeffrey Lockenvitz, I.S. Controller, United Parcel Service, and
Gary Pereyo, Senior Consultant, IBM Corporation
IT Asset Management The Key to IT Financial Management. This session discusses the important role IT Asset Management (ITAM) plays in Total IT Financial Management. ITAM is critical to several IT financial functions. We will explore the various interactions ITAM has to these functions.
Financial Perspective on Asset Management. Asset Management today seems to be taking on a life of it's own. No longer just an inventory tool, Asset Management is rolled together with Configuration Management, Change Management, and other disciplines. Don't let the bells and whistles get in the way of the original purpose: better financial management. This discussion focuses on the data and processes necessary to support the financial aspects of Asset Management.
Buying Software Products. Making a new software purchase is not a big deal when buying a few copies of Microsoft office. However, buying a new Chargeback, Assets Management, or Security package can be a rather daunting experience. This session describes some common sense and some rather unusual methods that have been employed for selecting a software vendor. Anyone who has been involved in a software product selection or those who fear they may be involved in such a project will find this session very interesting.
Case Study in Centralized IT Asset Management. United Parcel Service recently centralizing its IT Asset Management processes and data. This session reviews the challenges encountered by the project team due to a large and complex distributed infrastructure. Shared with you are the lessons learned when getting started as well as the formula for data, process and organization that got phase one off the ground. A roadmap to effective configuration management is reviewed too.
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Performance Optimization for the Public Sector IT Organization Seminar (4 hours)
Doug Webster, Senior Manager, Christopher Dedera, Senior Manager, Chuck Joesten, Senior Manager, and George DelPrete, Director, Grant Thornton LLP
Managing IT performance is challenging enough, but add in the complexities found at the Federal, State and Local Government and Higher Education levels and the task becomes daunting. Budgeting, appropriations, and year-end spending all make the challenge in the Public Sector more difficult. This seminar explores some of the methods and techniques that have been used successfully to improve IT performance.
Managing IT Performance. Increasing budget pressures requires IT organizations to focus more on performance management. The focus on budgets and limited availability of financial data makes managing IT performance increasingly challenging. This session explores commercial performance management techniques and their applicability to your environment. In addition, the results and lessons learned from actual implementation will be discussed. Participants will come away with practical ideas on managing IT performance.
IT Organizational Design. CIOs continue to make standardization and consolidation one of their top priorities. Organizational design offers IT organizations additional opportunities for more efficient utilization of expenditures and delivery of services. This session will explore trends in IT organizational design and some of the various options available. The key learning points focus on industry trends and how to maximize efficiency through an improved organizational structure.
ABCs of IT Shared Services. Shared Services is an increasingly popular approach to improving cost effectiveness in the delivery of IT services. However, determining the costs of services to be charged, and justifying those costs in a way that is convincing to users and encourages efficient use of resources are challenges to many organizations. This session will explore how Activity Based Costing can be used to establish fees charged in an IT Shared Services environment and encourage more cost effective use of IT services.
The Role of Change Management. The failure of projects in general in meeting expectations has been cited to be as high as 70%. Failures in ERP implementation have been estimated at 50%. Many of these failures stem not from inadequate consideration of technical matters, but from a failure to understand and address the organizational and individual behavioral aspects of change. This presentation provides a new framework for understanding the role of change management in any large project, and provides insights into how to target change management initiatives to the specific organizational need.
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Buffet Lunch (Not available to family/guests)
Integrated Performance Management and Process Improvement for IT Workshop (3 hours)
Andrew Muras, Vice President
BAE Systems Analytical Solutions
Over the past several years, IT systems and hardware solutions have multiplied exponentially. Today, IT implementation and support costs usually comprise one of the most expensive elements in an organization. And here is where management gets concerned: What is IT really providing? How should we measure and improve performance? How do we control costs? Should we outsource? Unfortunately, upper management’s priorities are often conflicting – they want lower costs, while at the same time desiring sophisticated business solutions and up-to-date IT infrastructure. Effective performance management, coupled with process improvement, helps address these issues – since management of the IT environment is, first and foremost, a process – with different tasks, relationships and resource requirements. These processes, along with overall strategies and metric systems must be quantified and then linked together to proactively manage in today’s environment, and then to communicate results to your customers. This interactive workshop uses case study examples to show you where to begin, including FastTrack approaches for implementing the two most effective tools for performance management and process improvement in IT. Specific topics include:
• Elements and key steps of effective performance management
• Using the basic tools in performance management: balanced scorecard and activity analysis
• Tips for successfully implementing a top-down/bottom-up approach
• Linking measurement systems, cost drivers and process improvement
• Developing service level agreements and unit costs
• Benchmarking internally and with external service providers
In addition, each participant receives a free easy-to-use FastTrack software package to help analyze your IT processes and products and develop effective measures.
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IT Procurement and Asset Management Tools and Techniques Workshop (3 hours)
Paula Ausano, Managing Partner, Paularry Partners and
Larry Graham, Managing Partner, Paularry Partners
Implementing IT Procurement Best Practices – The Work to be Done. This part of the workshop focuses on the how to, the benefits, and the roadblocks to overcome in the implementation of IT procurement. In true workshop fashion, we will examine the tools and techniques used by best practice procurement organizations to improve and sustain their value as an important company asset. We will look at tools from policies and procedures to vendor scorecards as well as position descriptions, procurement marketing materials for the company as a whole, plus internal and company-wide training programs. We will conclude with both the organizational and financial results achieved.
Putting the Building Blocks Together for the IT Asset Management Program that is Best for Your Company. This part of the workshop will dive into the typical state of asset management in most companies and will surface with the painful acknowledgement that asset management offers considerable value to the management and control of costs, planning and budgeting, service level agreements, help desk support, contract management and the management of IT in a dynamic and highly competitive world. We will examine the necessary steps to be taken in a carefully planned way to design, implement and entice cooperation for a company-wide value proposition through asset management. We will conclude with the opportunities offered by this initiative and the value that companies have achieved.
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Building a Service Catalog Workshop (3 hours)
Sid Finehirsh, President, The CMX Group Inc. and
Norman Dee, Senior Consultant, The CMX Group Inc.
"Running IT as a Business” and "IT/Business Alignment” are central themes today, challenging IT organizations to articulate the services they provide, the value of these services, and, how well these services represent the needs of the business. Increasingly, organizations are crafting service catalogs – often a daunting task – in response to these demands. Service catalogs are central to Service Level Management. They are perhaps the best vehicle for linking business needs to services provided, providing cost transparency, and improving efficiency by influencing demand. This workshop will discuss best practices in Service Level Management, challenges faced in building a service catalog, options and approaches, contents of a service catalog, linkage with Financial Management and chargeback, and IT/process teams involved. The process of building and populating a service catalog will be walked through using real life examples. The workshop topics include:
• Best practices of Service Level Management and service catalogs
- Top-down vs. bottom-up
- Number of service families
- Change control
• Definition and components of a service catalog
- Purpose of the catalog
- Service catalog configuration
- Service level agreements
- Service costing, pricing, terms and conditions
• Service Catalog Maturity Model
• Linkages with Financial Management and Capacity Management Process
• Measuring success – KPI’s and process improvement
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