Making Data Driven Decisions around Technology Investments with Apptio & ServiceNow

We are excited to announce a deeper integration combining Apptio’s best-in-class Technology Business Management with ServiceNow’s industry-leading IT operational data. Apptio’s certified Technology Business Management solution delivers improved cost transparency, planning & forecasting, governance, alignment of costs and value with the business, and creates a near-real time cost model powered by financial and operational data (including from ServiceNow) to help customers make quicker trusted technology investment decisions.

For technology leaders in today’s dynamic marketplace, making the best investment decisions hinges on a couple of key questions:

• What are my total costs of ownership (TCO) of applications including hardware, software, cloud services, labor, etc.? How utilized are my applications?
• What redundancy exists for these applications and what opportunities exist to reduce my application footprint?
• Is public cloud always cheaper than on-premises/private cloud from a TCO perspective
• What % of my tech budget is based on “run”? How do I get insights to drive more innovation?
• Am I delivering ROI against the business case for my technology investments?
• How do I drive continuous planning and forecasting of my tech budget to meet the changing needs of my business?
• Are business leaders aligned on technology investments?
• Do I understand the impact on OpEx, CapEx for every technology investment?

These immediately reveal the most complicated challenges for technology leaders today, which include maintaining an accurate understanding of the topology of your IT investments (i.e., what do you have deployed, where is it, how are IT assets utilized, applications, and how does it interact with, relate to, or depend on other investments?), and knowing the total costs of your entire investment portfolio, including all the drivers, and being able to calculate the return on these investments. With multi-national organizations supporting tens of thousands of workers (many of them now remote), along with a wholesale transition from capital intensive datacenters to monthly variable operating cloud spend, and the labor shift from waterfall (project based) development to agile (product based) methodologies, to say the landscape is dynamic and complex would be an understatement. The wealth of operational data available in ServiceNow can transform cost models built on assumptions into models built on actual consumption. For this reason, many of our joint customers have asked us for a deeper integration.

For Example: Apptio can use ServiceNow’s ticket data, combined with the labor data from the General Ledger, to disaggregate what % of the spend of labor is going into supporting a windows environment vs. cloud services vs. specific applications. Apptio leverages the CMDB data to understand the application/infrastructure components and can allocate the costs leveraging ServiceNow CMDB data. Apptio looks at the inventory of IT assets in ServiceNow and is able to co-relate that to the financial records from General Ledger structures. Through this seamless integration, organizations can now maintain a near real-time understanding of costs associated with their evolving topology, provide real time insights into the spend of applications and infrastructure, and provide real time decisioning to decommission applications – i.e. reducing 25% of the long tail of redundant applications. For example, an organization can decommission a data center or an application, or move a workload from on-premises to cloud on Friday and have those changes reflected in the corporate cost distribution in Apptio and ServiceNow dashboards on Monday. Customer feedback has been very positive, and we are now excited to continue sharing this innovation with everyone!

Bringing Together Industry Standards

ServiceNow has built its business on a deep understanding of the operational services and workflows that drive business outcomes for their customers. This knowledge is underpinned by the physical assets that comprise these solutions and how they interact with each other. The mapping of business methodology to the technical side of the CMDB (Configuration Management Database) is at the heart of ServiceNow’s Auto Discovery toolsets and Common Services Data Model (CSDM). So, while both the ServiceNow CSDM and CMDB platforms provide best-in-class operational integrity for customers, they still lack accuracy and financial integrity. This is where the Apptio integration closes the gap.

Apptio created the Technology Business Management (TBM) category 15+ years ago to help business leaders make smarter technology investment decisions. The solution scales and manages data requirements of the largest organizations in the world and accommodates allocation strategies through the model (to any level of sophistication). These allocation strategies can be assumptive or consumptive.

• Assumptive allocations mean leveraging industry benchmarking and best practices to provide pricing, percentages, etc. for moving costs from one layer (e.g. financial layer to infrastructure layer) of the TBM model to the next. The benefit of this approach is that it is easier to get started with and get to a model which will frame the big picture of technology spend in an organized structure. The downside is that since the model is based on assumptions, there will always be deltas relative to the actual numbers.
• Consumptive allocations are based on actual assets, invoices, consumption, utilization, etc. This methodology can provide more robust allocations based on data. Using the ServiceNow Auto Discovery tools to populate IT data and connecting CSDM and CMDB to TBM solves this problem by marrying near real-time operational data (e.g., what is deployed? where is it? who owns it? what is its utilization, etc.) with industry-leading IT cost modeling software that provides financial costing integrity. Apptio also consumes data directly from SaaS vendors and public cloud providers to drive consumptive allocations. With ServiceNow and Apptio, a big part of the cost model can be consumptive (vs. assumptive), hence providing more fine-grained decision making into the tech spend.

Bi-Directional Connections

The heart of this integration comes in the form of ServiceNow-specific connectors created by Apptio for our Datalink service, which is Apptio’s proprietary solution to incorporate customer data from hundreds of source systems.

The ingress connectors are designed to work with specific ServiceNow datasets and map that information directly into the appropriate tables within Apptio. It proactively identifies the valuable (field level) information in these datasets and mirrors the inter relationships between infra/app & services, as discovered by ServiceNow. This interconnectedness allows the costs to be modeled based on consumptive, data-driven relationships thereby creating a more trustworthy, timely, and defensible total cost of ownership.

We have released 2 egress connectors which push financial costing data from Apptio back into ServiceNow. They are available as a certified solution in the ServiceNow marketplace. It effectively closes the loop by taking advantage of the operational data sourced by the ingress connectors to create a very detailed cost model with continuous updates. This information is then used to inform the fully burdened cost structure of the top applications & services, which can then be pushed back to ServiceNow and presented in their native dashboards. The cost structures are detailed with breakouts for associated hardware, software, labor, and other spend with full supporting details available in Apptio. With this new level of bi-directional integration, we enable a ServiceNow user to not only see their operational data and metrics for an application or service, but now they will also have the supporting financial costing metrics.

Making Trusted Technology Decisions

As the pace of business continues to accelerate and all organizations are becoming truly digital, making the right technology investment decisions today can play a big role in your organization’s success in the coming months and years. The ability to easily integrate the operational data in ServiceNow with the financial management capabilities of Apptio has proven to be a winning combination for customers. We continue to look for innovative ways to drive continued transparency and optimization to ensure customers can take full advantage of their investments.

Better Together

Accelerate technology spend management and service management with Apptio & ServiceNow’s joint approach to managing the work and business of IT.

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