Executive summary
With technology costs buried in the P&L statements of hundreds of separate business entities, IT planning was a complex process at dentsu. Implementing Apptio helped the central finance team streamline and simplify the process, centralize costs, and deliver data-driven insights that enabled company leaders to make better budgeting decisions.
Company overview
Dentsu is a global media and advertising group with 71,000 employees across 145 countries. Headquartered in Tokyo, Japan, the company offers services that include communications strategy through digital creative execution, media planning and buying, sports marketing and content creation, brand tracking, and marketing analytics.
The challenge
Dentsu’s growth strategy through the 2010’s, underpinned by mergers and acquisition resulted in a distributed technology estate that lacked efficiency, had a lot of technical debt, and was costly to manage. In addition, each business entity that made up the company had its own finance operation, responsible for tracking budgets within the central organization.
To achieve scale, dentsu needed to create a different operating model for IT planning, underpinned by common platforms. The company’s IT leaders began consolidating and rationalizing the technology estate, but the organization retained a distributed operating model.
Outside of the centrally managed IT functions, the company’s financial information was fragmented. Technology costs were buried in hundreds of P&L statements globally, meaning the centralized technology organization had limited understanding of costs, services, value or usage.
Without a centralized view of costs, IT planning was done using spreadsheets; Excel templates were circulated to local finance teams, which each business entity used to submit a tech budget request.
“We really had to chase information,” said Steve Brenton, finance analyst and TBM specialist at dentsu. “Trying to understand the different technology costs in all the markets and explain what was behind the numbers was always challenging.”
Brenton added that the company’s spreadsheet-based process was time-consuming and labor-intensive because the team manually had to resolve version control issues and correct errors, as well as seek out explanations for budget requests – the process could take as long as five months to reach the global budget review step.
In 2018, dentsu decided it was time to make a change. The company was continuing to thrive and needed a more scalable, streamlined IT planning process to support business growth globally.
The solution
The company looked at Apptio and several other financial software products to replace spreadsheets for IT planning. According to Brenton, Apptio was ultimately selected over the others because it was easy to use and was the only product specifically focused on technology finance.
Apptio was implemented in July 2018 and the dentsu finance team launched Apptio to end users at the end of August that year, with budget presentations for the following year based on Apptio with full supporting detail.
The results
Simplified budgeting and forecasting saves three months
After implementing Apptio, the budgeting and forecasting process became much easier. The business entities no longer had to enter data into a spreadsheet and then submit it to the central finance team — they now put everything into Apptio. With the centralization of all data using the Apptio platform, there was no longer a need for the central team to chase information or to resolve version control problems.
Simplifying the process has enabled the central finance team to improve efficiency and productivity and given them more time to actually manage the budget.
“It’s three months faster than our old process,” Brenton said. “Instead of waiting months, we now get a solid view of the technology budget a few weeks before submission, and having that ability has given us the flexibility to manage our technology spend globally. For example, Apptio enables us to see if one market is struggling with extra costs coming in; we can look at the budgets in other geographies to see what adjustments can be made to help out the region.”
Brenton added, “As far as our budgeting processes, Apptio is a massive improvement and overall has helped us increase our levels of governance. We can now do full management of our forecast instead of just chase account codes and what’s gone up and what’s gone down, which we could never do before. Apptio ultimately enables the whole budgeting and forecasting process for tech, in an informed, rather than reactive manner.”
Increased visibility
At the heart of many improvements, Brenton said, is the increased visibility the Apptio platform gives them. “That is clearly at the top of the list,” he said. “Visibility is huge.”
He added that visibility was something missing under the company’s previous process, and that limited the finance team’s ability to manage variance and influence the budget. Before Apptio, there was a small number of tech accounts in the general ledger with no detail — the finance team could see where one account goes up and another one goes down, but they had no context to conduct any meaningful variance analysis.
Now, everything is in Apptio, and the team has context behind the data. They can see spend broken out by technology, region, and major service lines (platforms, security, HR, etc.), and that gives them insight to make decisions.
“It’s all about the visibility enabling people to make decisions before the budgets and forecasts are locked in,” said Brenton. “Just being able to see the costs that are out there helps us find areas where we can take cost out or drive business cases for new tools or standardized tools. That’s been a big win with Apptio.”
Improved team communications
After implementing Apptio, the company has been able to bring finance and tech teams closer together. Brenton attributes much of that to the centralized nature of the Apptio platform.
“Having a consistent platform for gathering data, we’ve been able to see which markets are quite mature and which markets are maybe a bit less mature, and that’s allowed some of the finance teams to reach out, understand, and mend any broken fences or just pull people together,” he said. “Now tech and finance work hand in hand for budgeting which means we have better controls on spending but also greater opportunity to dedicate budget to areas which need strategic support .”
Summary
Brenton explained that Apptio has not only improved the company’s IT planning process but also simplified the workflow, enabling the central finance team to bring structure and organization to what had historically been a rather difficult challenge. There is more connectedness between finance teams now, and they are getting the insights they need to have data-driven, collaborative conversations that are having a real impact on the business.
“It’s the visibility and consistency that allows us to properly budget and forecast,” he said. “Without it, we would still be just chasing the numbers, going behind the submissions. Being able to see what is going on across the network and have a standard approach is our ambition in every area of the organization – with Apptio, we have proved what is possible.”
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