What all do you get by using Bill of IT?  How has it benefited your business/company?  Gathering info..

+@Sarah Meldrum

For us, implementing Bill of IT was probably the most beneficial Apptio module as we use the output to charge our businesses i.e. if they want the detail behind the charges, they have to use BoIT to see it. We were charging the businesses for IT well before we implemented BoIT but the transparency behind this was not great and the Finance team were producing 300+ manual reports each month to try and help the businesses understand what they have been charged for.

After implementing BoIT, those manual reports were decommissioned (we have about 10 left), as the businesses can self-serve their IT reporting through Apptio, and the Finance team have more time to do more value-add activities. It changed the conversation from 'WHAT are we being charged for' to 'HOW can we manage the charges' - which was a big win for us.. 

In saying this, I believe it's most successful when you implement a chargeback approach rather than just showback - we find the businesses will react if they are actually paying for something.

@Mark Salib - This is great information! We are currently in the midst of fully implementing the Bill of IT but aren't quite to the threshold we want to get to. At what point or transparency percentage did you fully adopt the Bill of IT? About 50% of our costs are considered "Various Applications" at the moment and we want to get to 80% direct allocations before adopting the BoIT.

Each different section of our business is paying for IT services and get background information if they ask for it.. but many still consider the costs "business as usual" and think they have no control. Ideally we can show them, through the BoIT, that they can (partly) control the costs!

We were lucky in that we were already charging 100% of IT costs out to the Business prior to implementing Bill of IT so our implementation was more about transparency, automation and self-service rather than changing the dynamics of how/what IT charges.

However, we are charging out based on Business consumption of "widgets" (IT Services e.g. storage, compute, networks) rather than Business products/capabilities (e.g. applications). This is something that we are looking at changing in the near future but we will have a similar issue to what you mentioned where some charges can be specifically linked to an application and others can't be.

I suspect that we will end up in a hybrid situation where we will charge based on applications where we can identify these and then continue charging for the IT Services for the remainder so that we still charge out 100% of IT costs. 

In any case, I'd recommend adopting sooner rather than later - we found that showing the unallocated amounts to the business is a great way to encourage clean up and get better quality data. Also, adding levers to each charge will allow the business to know exactly how they can control the costs e.g. number of licences for an application and/or how frequently the application is used.

@Mark Salib I agree BoiT seems like it would be the single most beneficial module....You said you've been charging the business before it.  Could you elaborate on that?  What advice would you give to someone not even doing showback at this point?  How did you get the support from upper management?

Thanks!

As it was explained to me, the cost of IT services provided for the company are "peanut butter" spread across the organization based on revenue. IE: the higher the department revenue, the higher their cost of IT. This is obviously not a best practice and we are working to attain that 80% direct cost threshold. Upper management has been somewhat aligned with this role, and they understand that IT costs need to be represented with better transparency.

@Sarah Meldrum I would at least try to get a conversation started where IT and associated costs are looked at with more scrutiny. These costs can be used to make better business decisions, if we can provide those decision makers with accurate spending habits of the business.

Hi @Sarah Meldrum - our charge process is as follows..

We charge our Businesses for their consumption of IT based on three things:

1. Labour: all IT staff have a rate which they charge and they complete timesheets to indicate who should be charged for their time. The rate is 'all inclusive' (remuneration + overheads) and is set per team / location / employee grade i.e. staff in the same team, same location and with the same grade will have the same rate. Labour can then either charge their time to:
   • Business i.e. they are working on a projects - these are 'real' charges directly out to the business
   • Services i.e. they are working internally on IT Services - these are not charged out to the business but their cost forms part of the Service rates (below)
2. Services: our IT department has 300+ specific services they provide to our businesses (e.g. Storage, Compute Networks, Laptops, Phones) and each one of these has a set price which we charge to the business based on their consumption. Each month, our Service Owners send us consumption data to tell us exactly what the business is consuming for that month and this enables us to do a simple Price x Quantity charge to the Business for all the IT services. 
3. Passthroughs: These are items which the IT department pays for and then just charges directly out to the Business which requested it e.g. software licenses or external consultants.

With all of the above, our aim is to charge out 100% of IT costs to the business so that IT is left with a net nil position at the end of each year. The rates (labour & services) are set at the beginning of the year so that the business can forecast their IT charges and it keeps things stable (rather than charging a variable amount each month based on cost).

Given that we had all of this already pre-Apptio, our Bill of IT implementation was more about transparency, automation and self-service rather than changing the dynamics of how/what IT charges. 

As for moving to a show/charge model, I guess it depends on the desired outcome - for us, we started the chargeback approach so that the Business could share in the accountability for the IT costs of the organisation. While some costs are unavoidable e.g. networks, security; there's a lot of variable costs which the business can control - especially as we continue to see the trend towards the 'as a Service' model where 3rd parties are providing IT services e.g. Cloud. Also, our IT department doesn't make any income - so we wanted the cost to be allocated to an income generating part of the organisation.

Hope this helps and good luck with your journey

Thank you @Mark Salib!  That is hugely helpful.  I am a member of IT and only dedicate about 10% of my time to TBM.  We're still quite immature in our path but we have to start somewhere.  We are just now trying to identify and validate where our spend goes, however, I also want to stay aware of what we want our future state to look like so we can begin creating the necessary processes now.

Hi@Mark Salib, I echo @Sarah Meldrum - hugely helpful!  I heard that Bill of IT helps you set rates, but it seems like you could set them on your own.  Just wanted to get your input on that part as well.  (Not knocking Bill of IT by any means, just collecting info.) 

Hi @Jenny Franklin.  We set rates through our forecast process..

• Labor Rates = Total forecasted cost of labour (per team / location / grade combination) divided by forecasted timesheet hours
• Service Rates =  Total forecasted cost of each service / forecast consumption units

This is actually done in CT by running our financial forecast (Cost Centres and GL accounts from IT Planning) through our CT model. This gives us the total forecasted cost of labour and services which is then used to calculate the respective rates. Note that we don't always use the calculated rate - we can strategically price if we want.

Bill of IT then shows the Business 'charge' Forecast using the rates so that our Businesses can see what they will be charged based on the forecast.

Hi

What is unclear to me is what functionality the Bill of IT module actually provides that you could not replicate in Cost Transparency? We are using Cost Transparency to create the TCO of our products/services and while the actual charging of IT Costs to the business are done utside of Apptio we have loaded the relevant details into Apptio and created a report in CT that shows the details (applications, people, servers etc) behind the summarised charges received by the business.

Do I still need to build out the Bill of IT and if so what are the advantages (the Out of the Box reports are not so interesting to me as they can be produced as a cusomized report in CT)?

Absolutely @Chris Barnes - you could simply create custom reports in CT instead of having a separate module.

Our reasons for having separate modules are:

1. Different target users - the Business has access to BoIT to see their charges but they don't have access to CT (they don't need to know what the underlying costs are - just what they are charged)
2. Redaction - Business users only need to see the charges to their own divisions and not across the entire organisation so we have Row Level Security applied in BoIT but we don't need this in CT 
3. Impact to calculation times - having separate modules means that the calculation times are separate - this keeps our CT environment lean as it already has a long calc time and means our 'time to market' for BoIT is much faster. There's no additional work required either as datasets required in both CT and BoIT can be automatically copied across using Datalink.
4. User Experience - targeted reports / home page makes it easier for users to find information and know what they are looking at (separation of Cost and Charge). Worth mentioning that while we initially tried the OOTB BoIT module, we eventually rebuilt our own module from scratch -  I recently posted about our new BoIT Home Page which makes it simple for Business users to find what they need. 
5. Future proofing - expanding BoIT for Shadow IT expenses or EBM or other Business reporting can be easily done and remains separate from CT

I consider Bill of IT a customer-facing "retail" view of IT services and Cost Transparency as an internal-facing "wholesale" view of the same.

Bill of IT also provides a separate controlled environment.

If your company is more showback and finds Cost Transparency meets the needs for showing costs to customers, Bill of IT is unnecessary.

If your company is a chargeback shop or requires a separate environment to permit customers to view their costs, Bill of IT is a fantastic option.

This may be deleted  but we created our own version of Bills of IT as the Apptio one didn't provide us with the level and format of information which we required to showback the tech costs

haha we did the same

HUGE Thank You to everyone for this great info!!