Hello fellow Apptio CT users! 

I just had a session with @Jenny Goodwin and we were discussing reports broken out by Business Unit. I asked if showing those numbers to your actual business users/partners was generally deemed a good or bad idea. Jenny said it all depends on the organization. So, I am reaching out to TBM Connect to hear from my peers on this- when reviewing your IT spend broken out by business unit in Apptio:

-Do you show these breakouts to the actual business units/leaders? 

-If so, was there a "shift" in how to initially present such transparency to them? 

-How was the reaction to the being presented with visuals on total IT spend for a specific BU? (i.e. if Design is over spending or consuming most of the budget, how did those conversations go?)

Thanks!

Allison

IT has always been a black box to our business partners - they've always wanted to know 'why does IT cost so much?'.  In that vein, it was a good thing - full transparency and visibility.  Also good for folks to see that technology isn't free!  It's expensive - and if you're supporting a bunch of old, legacy infrastructure, it's even more expensive (given the high risk of failure and the resulting impact/s to the enterprise and potentially your company's brand). It's cool to be able to show people - to zero in on those particular situations - change behaviors - give them options - show them (as an example) that it's better to go distributed than mainframe - or it's better to share a box or array then have your own.  People finally see the "why" - AND they see that 'oh it's not just IT, it's us, too, and the decisions we make.'  They have just as much skin in the game as IT.  Definitely helps level the playing field and provides the ability to work together for the good of the company.

Hey Allison,

I would agree that it depends on the structure of your organisation and what you're trying to achieve.

We're an infrastructure provider to the rest of the organisation. We operate as a legal entity in our own right, so our primary goal at the minute is to increase the maturity of our relationship as a service provider. We've been extremely strict in defining fixed unit prices per service, which by default is the only detail we want to share. We want our business consumers to focus on the things they can control: their choice of service options, and their level of consumption of them. We'll take responsibility for ensuring our unit prices are competitive and provide value for money.

However, it's never quite that straightforward! There are discrete cases where we've provided a level of breakdown in order to defend the unit prices. This tends to be by IT Resource Tower, however our model is in the early stages of maturity which restricts our comfort in sharing any of the infrastructure TCO detail. There was also another interesting case where one of our Business Units was being audited with regards to Transfer Pricing. In that case we had to explain how we applied Transfer Pricing margin to our charges, but that was more of a conceptual explanation as opposed to a specific breakdown by Service.

If you are specifically looking to achieve cost reduction in partnership with your Business Units, then there can be a definite benefit to sharing much greater levels of detail. The more detail that you provide, the more they have to work with. Eventually you'll find colleagues in the BU who become fluent in interpreting and acting upon Apptio data and achieving real cost take-out. They will (set out to) challenge the output, which can be time-consuming and difficult, but ultimately leads to improvements in accuracy. These types of people will be the people you want to translate Apptio data for the Business Leaders.

A couple of things I've learnt in cases where I have released increasing levels of detail to Business Units:

• It is vital to educate the BUs before, during and after releasing detailed breakdowns
• Drip-feeding levels of transparency helps to ensure the recipients understand the data, and prevents overwhelming them with masses of data
• It is much more useful if detail is grouped meaningfully - eg: by application
• It is more effective to release detail that you know the BU can act upon - these tend to be 'directly' consumed items (eg: servers linked to apps, contracts directly linked to apps) rather than 'indirect' items (eg: depreciation for servers, contracts for IT Mgmt)
• Where challenged on output, make improvements and demonstrate that these have been made to help increase trust, however don't be afraid of defending your current position - especially when you identify people who are specifically 'hunting' for immaterial inaccuracies.

Sorry - that ended up longer than I intended but hope it helps!

Steven

Love this: "Eventually you'll find colleagues in the BU who become fluent in interpreting and acting upon Apptio data and achieving real cost take-out. They will (set out to) challenge the output, which can be time-consuming and difficult, but ultimately leads to improvements in accuracy. These types of people will be the people you want to translate Apptio data for the Business Leaders."  YES!  And SO important to work WITH the business partners vs just springing stuff on them - it's a partnership for the greater good of the company as a whole.

@Diane Johnson

Thanks for proving me right Apptio Community! ;-) --that Allison would get great fellow customer input out here on community.@Jenny Franklin @Steven Young

And I am sure there will be more to come Allison...  in fact, I'm tagging a few Elite Certified TBMAs off the top of my head because of their extensive experience, activism on community and in some cases blog posts on the topic of adoption.

  @Julie Batty  @Ericka Norman Srikanth Satakopan @Richard Coronado @Eric Self

Allison, you can read their and other Elite's blog post on the Wall of Fame - ETBMA17. I think you'll find many of interest.  Enjoy! :-)

I was just about to ping Julie to get on here!

I am here just reading through everything first - I'm not as fast as everyone else

You're smart - I just jumped in feet first - the other responses including yours have been more beneficial for sure!

Allison,

As you know, your corporate culture will necessarily have the strongest impact on your decision on what to do.  For us, business units indeed craved clear info on IT costs, however when we presented information it created a mildly adversarial relationship with our Finance group because the business units wanted to use our data as a weapon in conversations. (yikes!) But that's our culture at the moment. Truth be told, we did a poor job of keeping our finance team engaged in our TBM work, and suffered the consequences. (that's a separate topic)

At the TBM Conference I heard Conor Long speak on the topic of "How to Build a TBM Practice & Reinvent What Matters". He talked about the importance of asking questions of business units and stakeholders regarding what they wanted to see ... and in very specific terms.  Like "Would it be helpful for you to see the number of devices being used by your organization?" "What if I could break that down by employee role... would that be helpful?"  "What would make it more useful to you?"  It sounds like such obvious advice when I write it, but it was a terrific reminder that I don't always know the problems or issues the business units are trying to solve, and asking questions will help me deliver the best value versus providing transparency only.

Final thought, someone once asked me:

"Are we building a report that will foster a data admiration exercise?

Why not build a report that is a call to action instead."

Just by the fact that you're asking questions here on community, I have every confidence you've probably already got this question resolved! Best of luck to you.

Great comments @Jenny Franklin and @Steven Young!  I know that this is a question that @Chrystie Lambert has been thinking about a lot lately.

You can also restrict report access for your business users so that they have a carefully curated, limited view. They can then follow up with the TBMO or a Business Relationship Manager if they have further questions.  @Kyle Sellner and @Elizabeth Lewis could talk more about that.

another great comment @Eric Self!

Allison Lindberg,

This conversation is the fundamental in TBM Cost Transparency, But after many lessons learned here is how you may want to tailor the conversation:

1. Talk about the TBM Supply Chain (Page 11) of the TBM Book by Todd Tucker. Meaning what are the drivers towards the cost of each Business Unit and how you can support "Insight" to the levers to fine tune supply and demand of IT. 

2. Don't focus on the Business Unit, rather focus on the function that the Business Unit provides to the to generate revenue (Revenue/Profit is the North Star). If Business Unit "XXXXX001" is Marketing talk about the Function of Marketing and the technology they are consuming to carry out that function. If you can get to a unit cost of providing a service to a function even better. Here is an example I've used to help the conversation...My company is in Healthcare and we generate revenue through Claims. Our Claims Department utilizes A-B-C Technologies to process claims that generate revenue. Now based on our Modeling let's say each claim costs .70 cents to process. What I would say is this.

               A. Here are the drivers of the .70 cents per claim.

               B. Here are the levers downstream in the supply chain to help reduce these costs (Applications,                       Infrastructure, Labor Resources...etc)

3. Lastly, never start the conversation with....this is what you're costing IT. 

Hope this helps!

@Jenny Goodwin

I've seen this from both sides, at Cancer Research UK Business Units wasn't included and in general didn't really give us what we needed so an interpretation of BUs was being introduced to show back costs to each directorate instead (I left before this kicked off). With regards to reporting back their costs there was more of a hybrid approach when reporting back to the business, costs were taken out of Apptio and then worked on in spread sheets - hence why BUs was being introduced with the view of being able to do this in one central area and to expose holes in the data.

At RBS, Business Units breakouts seem to be an integral part in how Apptio and the reports/data is presented or shown back to the business - that's the impression I'm getting (this is my 2nd week in). Apptio & TCO seems central to the ways of working at RBS and helps to drive decisions and discussions - in some instances Apptio has become the first port of call even if not specifically related.

From a personal experience and reading use cases on community, having reports breaking out the costs by BU can sometimes lead to competitive behaviour which then drives the increase of data accuracy. an example from RBS is that the model is an 100% allocated model so if the data being provided is not accurate or missing then a BU may see their costs increasing/decreasing and this prompts a conversation with the TBMO

I agree with Steven in regards to drip-feeding the information to start off with, for me this is a key as too much information can scare people aware or raise too many questions at once. Along with this could look to complete regular reviews with the BUs to ensure they understand the month on month trends, cover off any differences/variances, able to review how their costs are made up - basically get them owning the data as this will always lead to better information and more accurate reports leading to defendable show/chargeback to the business.

Once I have a better understanding on how things are done here at RBS I will ensure to come back to this feed and give you an update - fabulous question by the way

I *heart* all of you.  Thank you as always for sharing your experiences and incredibly valuable input with a recent newcomer to Apptio and TBM and thereby the entire community.  :-)

Good questions and comments.  I like to think about what actions will the BUs be able to take with the data given to them.  I.e. do they feel like they can make impactful changes to them with the information.  I really like the idea that @Michel Brassart had with instead of just providing dashboards they send out actionable emails to individuals with suggestions on things they can change and impact.  The concept was put in at a individual level on things like IT usage of services, but I think pulled up to a BU level is interesting as well.  A report as a report doesn't help much if the end-user can't 1) understand it correctly 2) use it to make the right decisions. Interestingly, we had very internal IT focused BU reports set-up so IT BUs couldn't see each other's data. Eventually we did away with the walls from IT BUs seeing each other's data in order to provide the feeling of more transparency that allowed the BUs to talk about best practices and (most impactful I think initially) standardization around some processes that each used internally or shared. Kind of like Application rationalization there was a bit of process rationalization around why we had 10 ways to accomplish the same kinds of things.

For the BU engagement, what we did as part of the budget discussion was to share with them what I call a business advice package. In this set of slides, we were showing opportunity for them to save big money by adopting different practices. e.g. looking at number of PC per user, we had some business units with 1.4 PC per person. So in the advice package we showed the opportunity and put the question "does your business need this many PC to operate? this is costing you this much extra". We did this for all the services. Another example is around call center, " you have a 20 agents call center in this location for that many calls, could you not consolidate this activity to your larger call centers. Having a small call center force to declare this site mission critical and cost you X with all the redundancy that is required (including network double path, power, facilities, etc...). We also showed low utilization applications in non critical processes... or could you not drive more adoption of Skype over regular phone, this could save you...

This was very well received and switched the budget discussion from a traditional IT you are too expensive to IT can you help us with our consumption. We took this opportunity to provide a number of proposals on application transformation showing the investment required to modernize and consolidate multiple overlapping solutions with the associated savings in operating cost shifting a lot of resources from run the business to modernize the business.

We are not yet at a point that we are sharing the insights with the business yet through Apptio. Our goal is to be able to do it soon once we have ensured that we as IT are on the same page in terms of our Application and Service TCO and identify the levers that will optimize the cost and identify areas of savings that we can take back to the business to be able reinvest in areas of business growth and opportunities. Have seen the swing from total non-transparency to business of IT spend to complete transparency of IT spend and being transparent with full understanding of what the costs mean to avoid any mis-interpretation or ambiguity.

In Todd Tucker's book "The Four Value Conversation CIO's must have with their Businesses" I specifically like the examples provided from Harvard Business Review :

"It turns out that transparency leads to faster service and higher customer satisfaction. According to research at the Harvard Business School, when diners and cooks can see each other, customer satisfaction goes up by 17 percent, and the food is served 13 percent faster. An open kitchen is an example of operational transparency because it reveals operating processes to customers."

"More astonishing is the effect of cost transparency. In similar research by Harvard Business School, researchers found that online retailer Everlane generated 44 percent more sales by revealing the cost composition of a product (a wallet). The mere act of disclosing the costs, along with the price — even when doing resulted in a healthy profit margin — improved sales. According to the researchers, “revealing costs on competitively-priced products, managers can improve consumer attraction to the brand, and in turn, sales.”

Transparency is the way to go but ensure clarity, simplicity and defensibility on the numbers.