Optimizing cloud costs in financial services

Increased alignment and financial agility

According to Kasamale, prior to implementing Apptio, The Standard struggled to dynamically size opportunities for shifting spending to strategic areas. “It was hard for us to hold off spending in one area in order to prioritize another,” he admits. “The leadership team didn’t have enough insights on discretionary spending capacity to drive more efficient prioritization of funds across IT functions or portfolios, and this caused portfolio budget overages for several years.”

To shift their focus accordingly, Apptio introduced The Standard to a standardized cost model alongside investment, project, product, labor, and planning tools. The new model has enabled The Standard’s IT Finance team to focus 80% of their time on analysis, decision support, forecasting, and insights. Apptio has also enabled the leadership team to more confidently shift funding to accomplish objectives and more consistently achieve financial targets in recent years.

“The quality of financial plan segmentation and insights raised the bar for budget analytics and storytelling,” Kasamale says. “They had never seen anything like this before. The level of maturity of our financial planning process and feedback on our results has been off the charts since we deployed Apptio.”

More control over cloud spending

The Standard also uses Cloudability to increase visibility into cloud spending, a rapidly growing area of spending driven primarily by digital transformation and core infrastructure services. This has given the company’s product and application leaders valuable insight that has helped them make better decisions about cloud purchases and drive accountability.

According to Kasamale, the company’s Azure footprint had increased by five times in three years. However, using Cloudability to sort through actionable Azure rightsizing opportunities uncovered potential savings, leading to changes in the company’s cloud environments which are projected to reduce the company’s cloud spend in 2023 by 10%—and 2024 looks even better.

“The biggest payoff is to the trajectory for 2024,” Kasamale shares. “We were facing a 30% increase in organic Azure growth in a year and we also renegotiated rates with Microsoft. With all the optimizations that we have done to date, coupled with decisions that have influenced changes to data architecture, we are on track to absorb the effects of organic growth and are better positioned to negotiate our purchasing renewal.”

Better resource and program management

Digital transformation is and will continue to be part of The Standard’s business strategy. But managing delivery teams working on transformation initiatives was challenging, given the organization’s holding company structure and centralized delivery approach.

“Our development teams are dispersed,” says Kaarina Bourquin, Senior Director, IT Strategy and Portfolio at The Standard. “While we do Agile delivery, we also do waterfall. We need tools and processes that can provide operational insights, regardless of delivery methodology.”

Bourquin added that it was important for teams to find a common language among delivery methodologies. The teams needed to see what they were being asked to do both now and in the future to understand where to invest from a capabilities standpoint and to deliver the work in an optimized way.

“We have a mixture of dedicated and shared teams,” she says. “We have multiple portfolios across multiple lines of business. We must figure out capacity and sequencing across this mix and plan the work that needs to get done, which includes portfolio investment, operations, and maintenance. Visibility is important to us.”

From an operational perspective, then, the organization needed a better way to manage its strategy-to-value-delivery lifecycle, taking into consideration both product-oriented work and project-oriented work, to ensure business leaders worked collaboratively despite the organizational complexity.

This was one of the main reasons the company looked at Targetprocess. The other had a lot to do with the COVID-19 pandemic.

“We were scrambling to figure out how to do big room planning virtually,” Bourquin recalls. “How do we take these exercises, which are heavily in-person centric, and move them to a virtual environment?”

According to Bourquin, they implemented Targetprocess to help them align team workstreams to business priorities. In turn, this created transparency, helped identify risks or impediments, and ultimately gave the team visibility into consolidated workflows that showed them the information about active or completed projects including status, stakeholders, relevant dependencies, committed work, and progress.

“Our say-do ratio—what we as an IT organization say we will do versus what we actually deliver—is important,” Bourquin explains. “Targetprocess has definitely made it easier for us to consistently measure that.” The say-do ratio increased by 20%, an improvement that goes beyond delivering more; it revolves around shared visibility into commitments, enabling the team to efficiently manage distractions and achieve tasks faster.

Allocating resources and tracking the status of work are only two of the benefits the company has received so far. Bourquin says they also have started to use Targetprocess to maintain a list of strategic initiatives, as a tool to help them add new ideas to the portfolio funnel, and to create requests for resource assignments.

“Strategic portfolio management is a big focus for us right now,” she declares. “This is where I see the value of Targetprocess increasing for us. When I think about planning for enterprise, portfolios, programs, or projects, I think about Targetprocess.”

Next steps and advice to others

When asked about advice for others who may be in the early stages of their TBM journey, Kasamale’s answer is straightforward, “Don’t wait. You can get started quickly just with agile budget reporting and spending segmentation while using the core foundational components of Apptio. And that will help your leaders understand how to shift budget from run to funding grow-and-transform initiatives.”

From fully integrating strategic portfolio management to establishing complete chargeback capabilities, The Standard considers the IBM solutions to be an instrumental platform for the organization and is looking for applications to help drive significant business results in the future.

“The IBM solutions have been indispensable tools for helping our IT leaders solve pressing issues around transparency, financial agility, and transformation,” Kasamale says. “There are so many challenges IT leaders must navigate today—not being able to understand or tell their financial story to the business area should not be one of them.”

The Standard (link resides outside of ibm.com) is a leading provider of financial products and services, including group and individual insurance offerings, retirement plans and services, and individual annuities.

Founded and headquartered in Portland, Oregon, the company has been helping people achieve financial well-being and peace of mind for 117 years.