Company overview
The Massachusetts Mutual Insurance Company (MassMutual) is a financial services and life insurance company headquartered in Springfield, Massachusetts. With a core value of people helping people, MassMutual offers a broad portfolio of life insurance, retirement, and investment products to help customers protect their families and achieve their financial goals. Founded in 1851, the company has grown into one of the leading organizations in its industry, with $39 billion in sales and $1 trillion of life insurance protection in force.
The challenge
MassMutual’s goal is to provide protection and investment services that are second to none, meeting people wherever they are and delivering seamless customer experiences through its omnichannel strategy. Because of the importance of technology in achieving this objective, one of MassMutual’s biggest challenges was getting more visibility into its tech spend.
“We had spreadsheets and some rudimentary processes,” said Olga Timofeyeva Vogt, Strategic Finance Business Partner and Head of Technology Business Management (TBM) at MassMutual. “But tech spend was still like a black box to the business. There was very little detail behind the numbers, and business leaders needed to understand what they were spending on technology. More importantly, they needed to see the value technology provides, how it helps them achieve business outcomes.”
The solution
To address this challenge, MassMutual sought a solution that would eliminate the need for spreadsheets and offer more functionality to help manage the company’s tech spend. This resulted in the implementation of IBM Apptio Costing & Planning (formerly ApptioOne Plus), the leading solution for Technology Business Management.
The results
Apptio, an IBM company, has helped MassMutual achieve many value-based outcomes. It all started, according to Timofeyeva Vogt, with Apptio’s ability to provide in-depth insight into technology costs. “Cost transparency is by far the most valuable Apptio capability for our processes,” she said.
By leveraging the Apptio TBM Unified Model (ATUM), the industry-leading framework for collecting and allocating costs, MassMutual was able to see a detailed breakdown of the company’s tech spend, consumption rates, and value to the organization. This provided much more information than was ever possible using spreadsheets and gave business leaders critical insight into spend and value delivered.
Timofeyeva-Vogt said, “Apptio gave us an opportunity to understand the total cost of ownership for projects, applications, and services the technology organization delivers to the business. And it provided a consumption-based allocation framework, so each business line could understand the cost structure that underpins the technology footprint and see exactly what it pays for the different applications used to run its business, as well as the cost of shared services and the agreed-upon allocation methodology.”
This insight provides valuable input into strategic decisions. By having a clear understanding of TCO, MassMutual can determine unit cost for products and adjust pricing as needed. The company also can evaluate the potential success of buying or selling lines of business. And leaders have vital data for assessing M&A opportunities, including crafting Transition Service Agreements (TSA) for ongoing services and support. “Apptio is now part of every decision that involves technology,” Timofeyeva-Vogt said.
For example, the company sold one business line a few years ago that, at the time, represented one-third of the company’s revenue. Apptio enabled MassMutual’s leaders to understand the systems and services in scope for the divestiture and the direct and shared costs. The information was valuable during due diligence phase, helping identify shared and stranded expenses, determine pricing, and eliminate $60 million in direct expenses on day one of the deal closing. “Apptio was instrumental throughout the deal,” said TimofeyevaVogt.
Apptio now has become fully adopted across all parts of MassMutual and is used almost daily by the TBM team to help the business. Whether it is a request for information that will help make application rationalization decisions, help restructure or optimize tech costs, provide insight for product pricing, or supply data for investment and divestment deals or for launching new products or channels, Apptio is firmly placed within the company and seen as a key part of driving success for the organization.
“There are always questions from either the tech community, business community, product teams, or actuaries,” Timofeyeva-Vogt said. “I use Apptio almost every day, and it gives me data immediately at my fingertips. So, the speed to market it provides, if you will, is invaluable.”
Next steps
MassMutual has more planned for Apptio in the future, according to Timofeyeva-Vogt. “We want to refine our consumption-based allocation models and take our framework to the next level,” she said. “We want to add additional data sources and use cases and refine our cost drivers, so the business has even better information from which to make decisions. This includes rolling-in Cloudability as our FinOps team matures. And we want to explore how the Apptio toolset can help us do a better job of capacity planning as our labor force becomes more diverse and our list of competing priorities grows.”
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See more of MassMutual’s story
MassMutual Gains Complete Transparency into Their Technology Spending
Apptio helped MassMutual gain complete transparency into their technology spending and the value it provided.
MassMutual Saves $60M in M&A Costs with IBM Apptio Costing & Planning
MassMutual leveraged Apptio, an IBM company, to gain tech cost visibility and eliminate $60 million in expenses during the sale of a line of business.
MassMutual Leverages IBM Apptio to Make Data-Driven Technology Decisions
MassMutual leverages IBM Apptio almost every single day to make data-driven technology decisions faster and increase the speed to market.
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