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IBM ApptioThe IT planning and budgeting season is a difficult time for IT Finance as they build budgets using a mix of spreadsheets and CPM tools. Without the right solutions, IT Finance is in an unhealthy state with limited visibility, poor stewardship, and conservatism.
Let’s look at the primary cause of IT planning pain: spreadsheets.
Spreadsheets are excellent tools for data manipulation. But they aren’t purpose-built for IT planning or other IT financial management (ITFM) processes. Your IT planning process is too valuable to be handicapped with the limitations of spreadsheets.
Push a square (spreadsheet) peg into a round (corporate performance management) hole and you are resigned to high-touch, time-consuming IT planning. That’s not a burden for more straightforward shared services that roll-up into corporate finance like HR or legal. But IT budgets, with their complex cost models and composite costs for services, need a heavy dose of customizations to make them ready for corporate finance.
CPM tools are built for Corporate Finance. We needed a tool for the way we manage our business and run our IT budget. Now we can track new projects or initiatives that could have never been budgeted before, with individual line items, vendors, and services called out.
James LaPlaine
former CIO of AOL
Spreadsheet-based planning solutions compound manual data-entry errors and bake in miscommunications between cost center owners. And that’s just for the annual plan. A forecast cadence adds a multiple to the number of errors. Building annual IT plans in spreadsheets may be something to endure (what doesn’t kill you, etc.), but only the most dedicated masochist wants to replicate the process four times a year for quarterly forecasts.
The business needs IT planning to fuel innovation and deliver digital transformation. Spreadsheets aren’t fit for this (IT planning) purpose.
It’s time for IT to get its own dedicated planning tool.
You can’t afford to wait
Every day without the right planning tool you are falling short. With a dedicated IT planning solution, you:
Stop wrangling spreadsheets
Most organizations build their IT budgeting solution with a series of linked worksheets. They start off simple and grow complicated over time. An elaborate work-of-art-in-Excel budgeting solution is impressive; finance analysts are (rightly) proud of the way they build their IT budgeting solutions in spreadsheets. But that same finance analyst is the one point of failure. When an organization depends on a singular finance analyst to maintain, build and administer their solution, they are one hiring change (a good finance analyst is hard to find) from being left in the lurch.
End IT planning without context
Spreadsheets aren’t layered with IT context. IT Finance teams need finance-to-IT mappings that flex (but not break) in the face of operational changes. Building this mapping in static spreadsheets requires a manual reset after every operational change. (This presupposes that infrastructure and operations (I&O) teams keep IT finance abreast of when those changes happen. Not an assumption you want to rely on.)
Eliminate manual errors
Manual uploads and verification, add risk to the planning process. Accurate budget variance analysis needs automated data pulls from financial and operational that IT finance analysts trust. If the process isn’t automated, the process isn’t fully trusted.
Avoid governance free planning
There aren’t any governance processes around a spreadsheet. You can lock and unlock a worksheet but IT planning is a collective effort—locking down access is a barrier to entry. Loading data and submitting the all-up IT plan to corporate finance is the least time-consuming parts of the process. The process really slows down with the never-ending cycle of cost center budget submissions and approvals. Shepherding people through the process eats through work cycles and gives more chances for the whole process to go sideways. Spreadsheets can’t enforce version control on submitted plans. Spreadsheets do not track submitted (then rejected, then submitted again) cost center plans. Version control for spreadsheets usually means a dedicated folder in a cost center owners mailbox. You deserve better than that.
Initially, we invested in Apptio IT Planning for the huge time savings we knew we’d achieve. But it has also changed the conversations we’re having with the business and fostered better, more collaborative relationships with budget owners.
Stephanie Rendon
Director of Finance, CHRISTUS Health
Remove overly conservative planning
Cost center owners have a budget number they need to hit (or get close to). And they need to track close to it when actuals start showing up in the general ledger.
When the planning process isn’t trusted, cost center owners “plan” accordingly. Budget padding, cost center owners adding a buffer to their budget, is more a process issue than a budgeting one. When cost center owners see spreadsheets as an unreliable tool for IT planning, they take the necessary steps to protect themselves—tying up funds that could otherwise be used to fuel innovation or pay off technical debt.
Stop stakeholder disengagement
Planning with spreadsheets is a grind. It takes too long and bakes in too many manual touch-points that bake in errors. Low confidence in the process makes planning a grin-and-bare-it exercise in compliance rather than an opportunity to pivot your operational and capital budgets to your IT strategic plans.
Required capabilities for an IT planning solution:
- Build IT budgets and multi-year plans.
- Granular planning–vendor, assets, labor, cloud.
- Manage IT variance by integrating GL and CPMAdjust and update monthly/quarterly forecast.
- Perform scenario planning & what-if -analysis.
- Show impact of depreciation/amortization on capital expenditures.
Apptio IT Financial Management Foundation is the only product that offers collaborative budgeting, forecasting, variance analysis, and multi-year planning purpose-built for IT. It connects to existing ERP, GL, and chart of accounts solutions such as SAP Financials, Oracle Financials, and NetSuite. Apptio does this via a powerful, purpose-built IT cost modeling engine, which organizes disparate data and applies industry-standard cost allocation rules to provide comprehensive views of fully-burdened costs in terms the business understands.
In a survey of Apptio customers, the challenges of spreadsheet-derived planning solutions were clear and familiar. Time-consuming spreadsheets (84%), lack of IT context (52%), and difficulty of use (52%) heightened frustration with the whole planning process and lowered the ability to drive strategic value from the process. Notably, the range of issues with previous solutions had a multitude of secondary challenges. Whatever the solution, someone (somewhere) had a gripe with it.
In a follow-up survey of Apptio customers who had purchased and deployed Apptio IT Financial Management Foundation, the key driver for adoption was that it was a purpose-built solution for IT (64%) and that it automated the planning process (55%). Organizations, when shown an alternative to manually-update spreadsheets, embrace a planning tool that both elevates the ease of the process and the value of its output.
»Download these assets to plan budgets & forecasts that align with business priorities and quickly adjust to changes:
