This document discusses improving financial transparency for IT infrastructure costs. It begins with an agenda and overview of key challenges. Infrastructure typically lacks transparency due to its shared service model. The document then discusses creating a service catalog, service costing models, and capacity planning challenges. It emphasizes the need for collaboration between IT and business units on capacity planning. Finally, it discusses optimizing costs, managing consumption, creating a "bill of IT", and running IT like a business to improve transparency and allow informed decision making.

2. Agenda
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•
•
•
•
•

3. Running the Business of IT
Key Challenges

4. The IT House
Demystifying IT Financial Management
Maintenance&
Break/ Fix
Development
Projects(New /
Enhancement / L&R)
Services
Efficiency&
Performance
Tuning Projects
Applications
Infrastructure
Efficiency & Availability
Optimize
Create
Capacity
Today’s Focus

5. Infrastructure Side of the House
Average 2012 IT Spend - Cost Drivers for
Infrastructure
40%
21%
8%
12%
19%
Data Center End-User Computing
IT Service Desk Voice Network
Data Network
Gartner
IT Metrics: IT Spending and Staffing Report, 2013
35%
55%
10%
Applications
Infrastructure
IT Management

6. Polling Question 1
How much of your IT Spend is allocated to Infrastructure?
A. Less than 40% 16%
B. Between 40% and 60% 66%
C. More than 60% 12%
D. We currently don’t track this 4%

7. Applications vs. Infrastructure
Why is infrastructure perceived as the “black hole”?
Applications
• Usually decentralized and
customer facing providing more
natural transparency
• Business stakeholders tend to
understand the applications they
are building and using
Infrastructure
• Typically a Shared Service where
expenses are leveraged across the
enterprise creating less
transparency
• Minimal Finance team
involvement leading to lack of
cost accounting discipline
• More moving parts making the
billing process more complicated
and sometimes inconsistent

8. The Infrastructure Conundrum
You only hear from the customer when something
goes wrong
Systems must perform to SLAs
Cost must be minimal
Complexity affects everything
External benchmarking is often incomplete

9. 




Infrastructure
Driving Value while increasing Transparency

10. Reaffirm Your Shared Service Model
What is the value and what do you get?
Value to the
Company
• Standardization
• Leverage Vendor Pricing &
Technology
• Cost Management
• Integration of Services
• Risk Management
• Auditable Process
What Customers
Get
• Operational Maintenance
• Production & Change Management
• Incident & Problem Management
• Service Restoration
• Hardware, Software, Facilities,
Network, Other Expenses
• Monitoring
• Asset & Configuration Management

11. Mainframe
Z/OS
Z/Linux
Distributed
App
Hosting
AIX
VM
Wintel
Storage
Distributed Tier 1
Distributed Tier 2
Distributed Tier 3
Output
Processing
Cut Sheet
Continuous Feed
Fiche
Communications
Personal Comm (email)
Citrix
Office Comm
Desktop
PC Asset
Blackberry
Metered Services
Create a meaningful Service Catalog





12. Service Costing & Unit Rates
Total
Projected
Billable Units
OH
Indirect
Expense
Direct
Expense
Rate
/ = Usage
Charge
back
x =

13. Matrix View of Costs
Service Consumption Costs by Application

14. Polling Question 2
Do you currently have a Service Catalog?
A. Yes, without Tiered Service Levels 23%
B. Yes, with Tiered Service Levels 39%
C. No 37%

15. Capacity Planning Challenges
Demand on
Infrastructure
continues to increase
• Volume on existing Application
continues to grow with increasing
number of records year over year
• New and enhanced applications are
driving increase infrastructure
resource requirements
• Growth is unchallenged
Ability to Influence
Growth is limited
• Capacity requirements on existing
Applications are typically derived
through “projections based on
current trends”
• New Application volumes are often
“SWAGs”
• Limited interaction with the business
stakeholders or IT application
managers

16. 

Historical Trends By Service
Distributed Web (Actual vs. Planned CPUs)

17. 


Distributed Web Growth Forecast
Business Unit Breakdown
27%
54 CPU’s
Americas
MidRange VMware Wintel
42%
84 CPU’s
31%
62 CPU’s
78
TB’s SAN
202 CPU’s
StorageTotal CPU’s
33%
55 CPU’s
EMEA
MidRange VMware Wintel
40%
66 CPU’s
27%
45 CPU’s
55
TB’s SAN
167 CPU’s
StorageTotal CPU’s
80%
38 CPU’s
APAC
MidRange VMware Wintel
15%
7 CPU’s
5%
2 CPU’s
15
TB’s SAN
57 CPU’s
StorageTotal CPU’s

18. 7%
51* CPU’s
CPU & SAN Capacity Growth by Platform
729*
CPU’s
102* TB’s
SAN
Total
Forecast
MidRange
33%
237* CPU’s
VMware
60%
441* CPU’s
Wintel


Total CPU’s
574* Additional
CPU Growth
155 CPU
Growth Trend
Distributed Web Growth Forecast
Enterprise Infrastructure

19. 1,224
CPU’s
334 TB’s
SAN
Total
Forecast
Amer:
138 TB’s
41%
APAC:
94 TB’s
28%
EMEA:
102 TB’s
31%
Distributed CPU’s
SAN Storage


Distributed Web Growth Forecast
All Lines of Business

20. 



Capacity Requests by Application

21. CPU Demand by Application



22. Polling Question 3
How mature is your Capacity Planning process?
A. Capacity Planning is the responsibility of the
Infrastructure team
B. Capacity Planning is a collaborative effort between the
business unit and infrastructure team
C. We currently do not have a formal Capacity Planning
process

23. A Partnership
Understanding both sides of the story
Volume Unit Cost
Optimize
Cost
Tuning &
Efficiency
Utilization
Service
Levels

24. Optimizing Service Costs
Key levers / techniques for IT
Sourcing
Services
Vendor
Management
Performance
Tuning
Increasing
the variability
of cost
Benchmark to
develop
credibility

25. Manage Volume & Lower Costs
Key levers / techniques for the Business
Cloud / SaaS – Increase time to value and variablize
costs
Tele-presence – Reduce Travel and increase
quality of communication
BYOD / VDI – Reduce equipment cost while
providing flexibility

26. Rate / Volume Discussions
Reduce costs & increase capacity
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

27. TCO

28. Total Cost of Ownership
Understanding build vs. operate costs
Maintenance
Maintenance
Maintenance
$70k
30k
$15k
$35k
$20k
$60k
$35k
$20k 



29. Creating a Bill of IT
Make it simple and easy to understand



May-13 Actual (YTD) Budget (YTD) Variance ($) Variance (%)
Applications 32,111,948$ 166,596,147$ 158,421,942$ 8,174,205$ 5.16%
New Development 9,921,345$ 59,528,070$ 56,602,244$ 2,925,826$ 5.17%
Enhancement 7,953,456$ 39,767,280$ 42,930,045$ (3,162,765)$ -7.37%
Maintenance 12,943,693$ 58,246,619$ 50,100,332$ 8,146,287$ 16.26%
Legal & Regulatory 1,293,454$ 9,054,178$ 8,789,321$ 264,857$ 3.01%
Infrastructure 53,589,203$ 294,740,617$ 241,151,414$ 53,589,203$ 22.22%
Strategy & Management 1,500,034$ 7,500,170$ 8,000,000$ (499,830)$ -6.25%
Total 87,201,185$ 468,836,933$ 407,573,356$ 61,263,578$ 15.03%
Bill of IT
Americas - May 2013
35%
63%
2%
Applications Infrastructure Strategy & Management
5.16%
22.22%
-6.25%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
$-
$50
$100
$150
$200
$250
$300
$350
Applications Infrastructure Strategy &
Management
Variance
CostiinMillions($)
Actual YTD Budget YTD Varaiance(%)
May-13 Actual (YTD) Budget (YTD) Variance ($) Variance (%)
Applications 32,111,948$ 166,596,147$ 158,421,942$ 8,174,205$ 5.16%
New Development 9,921,345$ 59,528,070$ 56,602,244$ 2,925,826$ 5.17%
Enhancement 7,953,456$ 39,767,280$ 42,930,045$ (3,162,765)$ -7.37%
Maintenance 12,943,693$ 58,246,619$ 50,100,332$ 8,146,287$ 16.26%
Legal & Regulatory 1,293,454$ 9,054,178$ 8,789,321$ 264,857$ 3.01%
Infrastructure 53,589,203$ 294,740,617$ 241,151,414$ 53,589,203$ 22.22%
Strategy & Management 1,500,034$ 7,500,170$ 8,000,000$ (499,830)$ -6.25%
Total 87,201,185$ 468,836,933$ 407,573,356$ 61,263,578$ 15.03%
Bill of IT
Americas - May 2013
35%
63%
2%
Applications Infrastructure Strategy & Management
5.16%
22.22%
-6.25%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
$-
$50
$100
$150
$200
$250
$300
$350
Applications Infrastructure Strategy &
Management
Variance
CostiinMillions($)
Actual YTD Budget YTD Varaiance(%)
May-13 Actual (YTD) Budget (YTD) Variance ($) Variance (%)
Applications 32,111,948$ 166,596,147$ 158,421,942$ 8,174,205$ 5.16%
New Development 9,921,345$ 59,528,070$ 56,602,244$ 2,925,826$ 5.17%
Enhancement 7,953,456$ 39,767,280$ 42,930,045$ (3,162,765)$ -7.37%
Maintenance 12,943,693$ 58,246,619$ 50,100,332$ 8,146,287$ 16.26%
Legal & Regulatory 1,293,454$ 9,054,178$ 8,789,321$ 264,857$ 3.01%
Infrastructure 53,589,203$ 294,740,617$ 241,151,414$ 53,589,203$ 22.22%
Strategy & Management 1,500,034$ 7,500,170$ 8,000,000$ (499,830)$ -6.25%
Total 87,201,185$ 468,836,933$ 407,573,356$ 61,263,578$ 15.03%
Bill of IT
Americas - May 2013
35%
63%
2%
Applications Infrastructure Strategy & Management
5.16%
22.22%
-6.25%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
$-
$50
$100
$150
$200
$250
$300
$350
Applications Infrastructure Strategy &
Management
Variance
CostiinMillions($)
Actual YTD Budget YTD Varaiance(%)

30. Polling Question 4
Do you currently build a Bill of IT to chargeback to the
Business?
A. Yes 48%
B. No 51%

31. Run the Business of IT
You must improve Financial Transparency
• Cost
• Consumption
• Plan vs. Actual
Share Data &
Collaborate
• Be connected – to AD and Business
• Talk in Understandable language
• Strive for Credibility
Create a “Service
Mentality”
• Understand options
• Understand Fixed vs. Variable cost
• TCO
Allow businesses
to make informed
decisions

32. Call to Action…
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33. Questions & Answers