Using Excel sheets to calculate costs is "messy", this is why you need Apptio [Q+A]

Colin Rowland, VP EMEA at Apptio sheds light on what separates Apptio from the competition, and why your business needs Apptio. With IT costs becoming more complex with each month that passes, it is paramount that the C-suite of executives have a clear picture of the costs.

Can you outline what sets Apptio apart from the competition?

The main competitor to our “Technology Business Management" (TBM) approach to IT cost transparency is actually Excel spreadsheets, but that’s comparing apples to oranges. Specifically, Apptio differentiates itself from existing competitors by giving CIOs, CFOs and the rest of the C-Suite a comprehensive overview of IT costs and the ability to manage the business of IT. This is more valuable than ever as new technologies like cloud are revolutionising the way businesses operate because they make IT budgeting more complex.

Many companies still use Excel sheets to try to calculate these costs which is messy, inefficient, and can take months to do. Prior to Apptio, there was a huge need in the market for a solution that allowed IT leaders to:

  • Understand costs and KPIs to drive more value with the business
  • Compare their IT costs to those of industry peers
  • Understand how IT utilisation and performance correlate to IT costs
  • Automate, centralise, and simplify IT budgeting, forecasting and plan management
  • Operationalise their showback or chargeback processes to optimise IT investments

Through Apptio’s TBM applications and industry standard cost model (ATUM), we have helped the IT organisation optimise costs, rationalise application portfolios, accelerate service management and execute cloud-first strategies. For example, by implementing our Cost Transparency application, Nationwide expects to save between £6 and £8 million by optimising its spend. More than 250 customers worldwide, including over a third of the Fortune 100, leverage the TBM methodology to manage the complexity of modern IT.

How do you think the ways people address TBM have changed?

The growth of the non-profit TBM Council is certainly a testament to value of the TBM discipline. Apptio serves as the Technical Advisor to the Council alongside board members including CIOs from Microsoft, Cisco, ExxonMobil, and many more. More than 1,700 of the world’s most innovative IT leaders are members.

The recent European TBM Summit in London was attended by more than 200 IT, finance and business executives including executive speakers from some of the world’s largest brands including Bank of America Merrill Lynch, Cox Automotive, CME Group, Goldman Sachs, and Nationwide Building Society. The Summit showcased how TBM has become a highly regarded market category with established industry standards that demonstrably helps organisations to align IT with business goals.

What has Apptio done to address these changes?

Apptio puts CIOs and other IT leaders at the heart of the decision processes within their organisation so they can run IT like a business while simultaneously focusing on ‘change the business’ innovation. Apptio has developed a solution that integrates fragmented, imperfect data from financial and technology systems through a sophisticated platform and user-friendly applications. As a result, IT leaders are better able to understand and communicate the cost of running their IT organisation to their business partners.

Apptio’s ATUM model also helps CIOs to take full advantage of TBM’s capabilities by standardising IT cost and data models. By consolidating spend across the business, IT leaders are also able to make more informed decisions, identify volume discount opportunities, ease vendor management, align spend to portfolio strategy, and arm themselves for negotiations.

What are the biggest mistakes businesses make when tackling TBM?

What I hear the most from our customers is that they realised they should have taken the time to implement TBM as widely as possible across their organisations and to ensure executive sponsorship. Whether their objective is to get transparency, rationalise applications, cut costs, or to fund future IT innovation, for the best results, businesses need to take the time and get the basic framework set right from the start.

The biggest day-to-day concern raised by IT organisations considering embarking on a journey is focused on data quality. Businesses often believe that IT costs are very opaque and that their IT data is unclear or worthless. In reality, technology leaders can get the insights with the data they have today – in its less-than-perfect current state. Apptio delivers Adaptive Data Management which consists of three key capabilities: collection of source data, enrichment of raw data, and correlation of disparate data. These capabilities are designed to extract value from the data you already have by turning it into information. We call this Garbage In, Gospel Out and it really is an eye-opener.

What is most important is not the quality of data, but having the sufficient volume of it to make meaningful decisions. When we created our suite of TBM applications, we built in capabilities for cleaning and refining raw data. As a result, there’s no need to let imperfect or incomplete data bog down the adoption of TBM. For many of our customers, Apptio’s approach to TBM became the motivating factor that finally removed data remediation projects as a hurdle to better decision making in IT.

Where do you see the industry going in the next few years?

Cloud is playing a massive role in the transformation of the industry, while simultaneously adding additional complexity to IT. Outsourcing and on-premise software were once the only game in town, but now, because of scale and efficiency, hybrid services are becoming the end-point for many. More organisations will start looking at using cloud providers and outsourcers while managing IT in-house. This requires the sophistication of an approach like TBM to create a highly-visible win for the business; old approaches will just not cut it.

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