Presentation from State of Iowa's Cost Transparency Journey at ITFM Week 2014

April 18, 2023

Effective Cost Transparency from Imperfect DataTodd Tucker – TBM Council/Apptio

Kevin Teets – Apptio

Deb Krueger – State of Iowa

© 2014 Apptio, All rights reserved.2


The Importance of Why


“Why” Questions in IT?

Why is IT so expensive?

Why can’t we approve that additional investment?

Why are we spending so much on maintaining what we have…and so little on innovation?

Why does it cost more for IT to provide a

server than for Amazon to rent us one?

(And WHY does it take so long?)

Why do we keep adding

more infrastructure?

Why do we have so many applications?

Why do we need so much tier 1 storage?


Business Capabilities

Business Services

TechnologyServices

Application Services

Platform Services

Infrastructure Services

Projects

Resources

Fina

nce

View

IT V

iew

Busi

ness

Vie

w

Cost Pools

General Ledger (Chart of Accounts)

Cost Model

Business Capabilities

BusinessServices

TechnologyServices

Resources

Value Chain Model

Why? How? What? Our Value Chain…


IT Cost Transparency is not about

What does IT cost? It’s about…

WHY does IT cost what it does?

– and –

HOW can we use our money and other resources to create MORE VALUE?

Transparency Every Business Needs For Fact-Based Decisions

© 2014 Apptio, All rights reserved7“We knew more visibility would enable a change in culture and facilitate more accountability. Every CIO should have the level of transparency that enables action.”

HAROLD BOUTIN, Senior Vice President of IT Strategy and Effectiveness, Equifax

A P P L I C A T I O N S

What does it cost to provide each product and service?

S E R V I C E S B U S I N E S S U N I T S

L A B O RV E N D O R S

S P E N D D A T A Q U A L I T Y110010011001010110

P R O J E C T S

I T T O W E R S

What are the costs and KPIs of our key business disciplines?

Who is consuming how much of what?

What Questions Can You Answer with Transparency?

A P P L I C A T I O N S A N D S E R V I C E S B U S I N E S S U N I T S

What is driving the costs of our top 10 apps? What are project vs. run costs for these apps? What are cost levers for reducing cost of this app?

APPLICATIONS

Which cloud services are we spending most on? What is our cost per vendor for this service? How do our IaaS costs compare to Amazon’s?

SERVICES

What is our investment level per BU? What does it cost to deliver these apps to this BU? Where do we spend the most per employee?

BUSINESS UNITS

How much are we investing for innovation? How are we performing against project KPIs? Which projects are exceeding planned resources?

PROJECTS

What is driving our run costs? What is our cost per GB of tier 1 storage vs. peers? Are we trending toward greater cost-efficiency?

IT TOWER

What types of vendors are we spending most on? Are we leveraging preferred providers? How are we doing against spend targets?

VENDORS

Which costs are within our control? Where are largest sources of plan variance? What is driving plan variance?

SPEND

What is driving labor costs by role, location? How are we doing against our staffing plan? Where are we using our staff?

LABOR

Where are our cost blind spots? Which data from what systems don’t line up? Which data is getting stale?

DATA QUALITY

F O U N D A T I O N

110010011001010110

© 2014 Apptio, All rights reserved7

FINANCEITEXECS

TOWER, APP &SERVICE OWNERS

BUSINESS

Where and When Would Better Cost Transparency Have An Impact For You?


Questions from the business Initiative (M&A, ERP migration…) Business Case Infra choices by app teams Requests for capacity

Quarterly Business Reviews Annual IT and Business Planning Project Portfolio Prioritization Exec / Leadership Meetings Capital Review Board Demand Planning

ANNUAL AND QUARTER

Plan variance analysis Management reporting on

progress against targets

MONTHLY AD HOC


The Business Value of Transparency

Clorox Co. has promoted CIO Ralph Loura to senior vice president and added him to the company’s executive committee.

“We’re a 100-year-old company andfor the first time IT is represented onthe executive committee directly,” hesaid.

One way Mr. Loura has been able to help shift the thinking about IT at Clorox is by using a model of financial transparency and fiscal discipline known as technology business management.

– Rachel King, Wall Street Journalhttp://bit.ly/WSJClorox20140426

Ralph LouraSVP and CIO

The Clorox Company


What Does This Have to Do with Data?

Plan CapEx/OpEx Run/Grow/Transform Fixed/Variable Location/Regions Month/Quarter/Year

Cost Centers Accounts

General Ledger Line Item Detail

B R E A K O U T S

Standard IT Cost Categories

Application 1 Application 2Application 3 Application 4

Application & Integration Delivery ServicesHosting Services Professional Services

Client Computing

Communication & CollaborationConnectivity End-user Support

Records Management Business-Driven Initiatives Infrastructure InitiativesProcess Initiatives Compliance Initiatives

Your Applications Technology Services End User Services Project Services

COST TRANSPARENCY: APPLICATIONS AND SERVICES

Design & Develop Buy, Build & Deliver Market & Sell Service Customer Shared Services

BUSINESS CAPABILITIES

Business Unit 1 Business Unit 2 Business Unit 3 Business Unit 4COST TRANSPARENCY: BUSINESS UNITS

= Peer Benchmarks Available

Hardware Software Internal Labor External Labor Facilities/Overhead Outside Service

FOUNDATIONApptio TBM Unified Model™(ATUM™)

IT TOWERS & SUB-TOWERS

COST POOLS

DataCenter

ComputeIT

OperationsVoice

NetworkDeliveryServices

Security &Compliance

UserServices

DataNetwork

Storage ApplicationIT

Management

COST TRANSPARENCY: FOUNDATION

Wintel ServersLinux ServersUnix Servers

Locations

Mainframe

Tier 1Tier 2Tier 3Tier 4

Office LANDC LAN

WANInternet

MAN

Voice premiseWide Area Voice

Call Center

Project MgntClient Mgmt

PCsMobile DeviceService DeskField Service

App DevApp SupportQA (Testing)Middleware

Software Lic.

IT Mgmt & AdminIT Finance

IT Vendor Mgmt

Ops CenterService Mgmt

SecurityCompliance

Disaster Recov.Architecture


Data and Allocation Methods (Example)

Hardware Software Internal Labor External Labor Facilities/Overhead Outside Service

FOUNDATIONApptio TBM Unified Model™(ATUM™)

IT TOWERS & SUB-TOWERS

COST POOLS

DataCenter

ComputeIT

OperationsVoice

NetworkDeliveryServices

Security &Compliance

UserServices

DataNetwork

Storage ApplicationIT

Management

FOUNDATION

= Peer Benchmarks Available

WintelLinuxUnix

Locations

Mainframe

Tier 1Tier 2Tier 3Tier 4

Office LANDC LAN

WANInternet

MAN

Voice premiseVoice WANCall Center

Project MgntClient Mgmt

WorkstationMobile DeviceService DeskField Service

DevelopmentSupport

QA (Testing)Middleware

Software Lic.

IT Mgmt & AdminIT Finance

IT Vendor Arch.

Ops CenterService Mgnt

SecurityCompliance

Disaster Recov.

Sub-Tower Composition by Cost PoolUsed to configure mappings & allocations from your unique GL

Linux Hardware: Dev, Test & Prod Servers, Internal Storage… Linux Software: Operating System, Virtualization… Linux Labor: Engineering, Tech Support

Unit Metrics Per physical server, per logical server, per CPU, per CPU Core

Sub-Tower to Application AllocationAllocation Data Good: App & server team estimates (top 20 apps) Better: Server list with supported apps (e.g. top 20 apps) Best: Server performance by app ID

Allocation Methods Assumptive: Appx % of all LINUX used by each app; or Data: 1:1 relationship of server to app; or Data: 1-many relationship, weight by avg. CPU usage

Linux

Challenges of Creating Cost TransparencyTRIGGERS

Month end close Forecasts Project financial QBRs Ad hoc questions

MANIPULATE DATA

Clean and manipulate Create joins and mapping Find data problems

110010011001010110

3

BUILDREPORTS

Create pivots Build graphs Find data problems

5

MAINTAINCOST MODEL

Build vLookups Debug Formulas Find data problems

4VERSIONCONTROL!

ORGCHANGE!

UpdateOwn CostSpreadsheets

DATASOURCECHANGE!

VALIDATE/CLARIFY6

Timing and categorizations What cost went where? Why is that in MY costs?

FINANCE

High:$3.8m

Low:$180k

DATAOWNERS

High:$225k

Low:$18k

DEPARTMENT OWNERS

High:$108k

Low:$11k

ITEXECUTIVES

High:$130k

Low:$11k

PROVIDE DATA

Extract Validate

2110010011001

Explain Fill gaps

PUBLISH REPORTS

Trick Excel into makingwaterfall charts

Annotate and distribute

7

REQUESTDATA

1 Prompt IT and corporate for data extracts

ANSWER QUESTIONS9

Answer requires more granularity or different slices

Answer requires more dats (may become a “study”)

ASK QUESTIONS8

Why did costs. KPIs change? What does this include? I need to see this slices by… What it…?

?

The cost of staff time spent on manual IT cost analysis shows wide range of breadth, scope across Global 2000 IT orgs


Which Comes First: Transparency or Good Data?

“There's no better way to focus and prioritize your cleaning up data like assigning costs to it. If you know that your ‘unknown’ is costing you a lot of money each month, you‘ll choose do something about it.”

– Lance WarnerTBM ArchitectFirst American Financial

Award for Business Transformation: First American FinancialTBM Conference 2013

April 18, 2023

Cost Transparency at State of Iowa


Mission: Provide Iowans unified, comprehensive, value-driven administrative services

Responsible for infrastructure IT services to Executive branch agencies

Goal of reducing the cost of government by 15%

Consolidation of executive branch IT infrastructure functions is in focus

Federal law requires all services sold to agencies be at a net zero recovery

State agencies could approve/disapprove of certain rates charged by DAS-ITE

Department of Management oversees rate setting, determines if rate changes are allowable

IT has proven more difficult for users of financial information to understand

Why Cost Transparency at State of Iowa

April 18, 2023

Working with Imperfect Data


Introduction

1. TBM ADVISORS –MISSION STATEMENT

2. WHY AM I TALKING ABOUT DATA QUALITY?

3. WHAT YOU WILLGET OUT OF TODAY’S PRESENTATION?


Challenges

Don’t want to start TBMbecause of poor data quality

Do not have confidence in the level of data quality to defend the allocations within the Apptio model

START NOW!“A journey of a thousand miles beginswith a single step.”– Lao-tsu, The Way of Lao-tsu – Chinese philosopher (604 BC – 531 BC)

EMBRACE FAILURE!“Ever tried? Ever failed? No matter, try again,fail again, fail better.”– Samuel Beckett – Irish author, dramatist, novelist in France (1906 – 1989)


Apptio Data Quality Dimensions – Defined

MAINTAINABILITYA measure of the degree to which data can be accessed and used, and the degree to which data can be updated, maintained, and managed.

UNIQUENESS A measure of the number of distinct or unique values within a field.

COMPLETENESSA measure of the count and percentage of the fields that contain a value. Example: A server Operating System has a value in 90 out of 100 records, Data Quality Completeness = 90%.

VALIDITYA measure of the values within the data set compared to a setof allowed valid values. Example: Test all values in OS to a master set of valid values to ensure there are no outliers.

FREQUENCYDISTRIBUTION

The distribution of unique values within a field by count and percentage. For those values with a low frequency, consider dropping them and changing to another comparable value.

APPTIOON DEMAND


Data Quality Ecosystem

Data Governance

Ownership (TBMO)

Data Advisor

Data Sources

Data Stewards

Change Management

Automation & ADM

Monitoring / Measurement

Data Quality


Data Governance Organizational Model

OFFICE OF THE CIOE

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pon

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B

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S

tra

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hip

Str

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ads

Dat

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Str

ate

gy

Pol

icie

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Tac

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nic

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P

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Ow

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ip

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Sys

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Da

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Ste

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cont

rol a

nd d

ata

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Data Governance Program

TBM Steering CommitteeTBM Office

CROSS FUNCTIONAL WORKGROUP

DATA STEWARDS

OwnershipPolicy


Data Advisor

Data Advisor defines the data that you need to

build out each component within

Apptio, effectively acting as the Master Data set

for each source.


Data Quality Integration into Change Management

Change Management

• Maintainability• Uniqueness• Completeness• Validity• Frequency Distribution


Apptio Adaptive Data Management

DISPARATE RAW DATA

• Data checks• Parse, filter• De-dupe

• Create• Change• Join

• Auto-discover sourcedata relationships

• Map source tomodel objects

• Visualize relationships

VALIDATEAND CLEANSE

RELATEENRICH

RULES-BASED TRANSFORMATION

DATA INFERENCE

MODELS & ANALYSES

EXTRACT

Connectors(Cloud or On-Prem)

CORRELATED MAPPED DATA• Continuously adapts

to changing data and analytics needs

• Data chain of custody preserved and documented

• Less time on data prep, more time on analysis and decisions

DATA QUALITY DIMENSIONS


Data Mapper

Data Advisor Master Data fields that

support our Out of the Box content

Customer data that is mapped to Master Data which enables

the fastest configuration

possible


Data Foundations

Data Strategy

Data Governance

Source Systems

Data Quality Dimensions

Adaptive Data Management

Data Quality Index

Tra

nspa

renc

y

Ownership

Apps

GL

Completeness

Servers

Maintainabilty

Labor

Validity

Frequency Distribution

= DQ Ave % * Impact $$


Data Quality Workflow


Data Quality Dimensions – Dashboard

Drill into any KPI for additional

detail


Data Quality Dimensions – Maintainability

Answer 3 questions

to evaluate

score


Data Quality Dimensions – Uniqueness

Total number of duplicate records


Data Quality Dimensions – Completeness

# blanks per column


Data Quality Dimensions – Completeness

Slice into each column

to discover the rows causing

the errors

Export out for remediation

Row count is the same as # blanks

above


Data Quality Dimensions – Validity

First – configure Settings

Invalid cells are based

on values set in Settings


Data Quality Dimensions – Validity Settings

Instructions

Values that are new and

have not been assigned


Data Quality Dimensions – Validity Settings

Assign “Valid” or “Invalid”

as appropriate. These values serve as the

“Master” lookup values

Change values and click

Save before moving on


Data Quality Dimensions – Validity

# Invalid values per

column

Compare against

expected values


Data Quality Dimensions – Frequency Distribution

Instructions and overview of calculation



Review Threshold

Row number

Set Threshold

Value



Adjust slicer settings and

insert Threshold Rows KPI to review items for inspection


Data Quality Maturity

April 18, 2023

Data Quality Journey at The State of Iowa


Data comes from many different and varied systems

HRIS, general ledger system, MS Project, eDAS, etc.

Buy in is important!

Culture change comes from executive decision that transparency is important

Transparency cuts both ways:

view into financial data, which can be powerful and useful for asking for rate increases

shines a flashlight onto data quality (or lack thereof…)

Many stakeholders can have strong opinions about the data

Don’t wait to begin transparency efforts due to data quality

Data Quality Is a Sensitive Subject


Explained that financial data isn't 'perfect' and gets better with everyone's help

Managers have responsibility to review financial information

Managers ask for help where numbers disagree with their 'gut' feelings

Sometimes the financial data shows:

something that might have been forgotten or…

the financial data and/or allocations need to be adjusted

Iterative process – no financial report is considered above question

Roadmap to Improve Data Quality


Semi-annual inventory of servers, ports, racks

Ease the burden of reporting in ledger to having the costing tool (Apptio) provide the costing analysis

Allow billing to have additional 5 days each month to perform

trend analysis

review additions/deletions to prior month's file

Build good relationships with technicians, so coding changes can be made

Restrict access to 'master' data files

Bring in software to build a CMDB (implementing ServiceNow)

Monthly reconciliations to billing files and ledger to assure pass-through costs are recovered

Outcomes to Date

April 18, 2023

Building Trust in Our Data


Steps to Improve Trust in the Data

Beta test new models or major changes

Be transparent about data quality Account for every dollar Ensure report consumers

understand: how the costs were allocated how to interpret the reports what changes they can make

Provide drill downs in your reporting

April 18, 2023

Where To Learn More


Apptio Resource Center

Top 5 Reasons for Avoiding IT Cost Transparency (May 6 Webcast)http://bit.ly/apptiomaywebinar

Key Considerations in Data Model Whitepaperhttp://bit.ly/apptiokcdmwp

Case Studies:AutoTrader Group (http://bit.ly/apptioatg2014)

CME Group (http://bit.ly/apptiocmeg2014)

Freddie Mac (http://bit.ly/apptiofreddie2014)

Product Info:Cost Transparency Foundation (http://bit.ly/apptioctfds)

Source Data Guide (http://bit.ly/apptiosdrg201404)

http://bit.ly/apptiomaywebinar

http://bit.ly/apptiomaywebinar

http://bit.ly/apptiokcdmwp

http://bit.ly/apptiokcdmwp

http://bit.ly/apptioatg2014

http://bit.ly/apptioatg2014

http://bit.ly/apptiocmeg2014

http://bit.ly/apptiocmeg2014

http://bit.ly/apptiofreddie2014

http://bit.ly/apptiofreddie2014

http://bit.ly/apptioctfds



http://bit.ly/apptiosdrg201404




TBM Council

TBM Conference in Miami

Workgroups CXO peer groups for vertical

industries: FSI, Insurance, Health, CME, Energy, High-Tech

CFO of IT, Planning & Strategy, and Enterprise Architecture

TBM Book

TBM Index

LinkedIn Forum(http://bit.ly/TBMGenMembers) www.TBMCouncil.org

http://bit.ly/TBMGenMembers



http://www.tbmcouncil.org/

TBM Conf 2014 Miami – fountain blue

2014

MiamiTBMconference.org

October 28-30

53

Thank You!

Todd [email protected]

Kevin [email protected]

[email protected] Apptio.com