1

Introduction:
CIOs that define their relevance with uptime
stats and SLAs lack credibility with their C-suite
1 SPEND
SURPRISES

peers. Justifying your presence with operational 4

metrics identifies you as the face of just
another cost center—with no value-add to
a business conversation.
Seats in the C-suite belong to leaders who
measure their impact on the bottom line—if
CIOs don’t quantify their value in language
non-techies understand, they won’t be invited 2 LABOR
SHACKLES
to the table.
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Here are 7 killers of CIO credibility and what
you can do to avoid them.

3 BEDLAM
INFRASTRUCTURE

8 4 SPRAWL
CLOUD

10
5 PROJECT
RENEGADES
12

6 APPLICATION
EXCESS
14

7 UNCHECKED
CONSUMPTION
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 1 SPEND
SURPRISES

Overspend is discovered in the last month of

the quarter, leading to emergency cuts in other
areas such as innovation initiatives.
Inadvertent underspend leads to technical debt
and subsequent unwise budget reductions.

Why does this happen:

• Finance-centric variance reports lack

IT context.

• Poor line-of-sight to actual costs hides

budget variance until it’s too late.

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1 PROACTIVELY MANAGE “Our budget variance is more predictable than in prior
planning periods, before we used Apptio. For example,
SPEND TO BUDGET last year our variance on software and hardware
repair and maintenance costs was 9% off from budget,
while this year we are trending at 4%. The granularity at
which we can budget and review our actuals prevents
Best Practice: planning misses.”

ELIMINATE OVERSPEND SURPRISES AND Linda Schmitz, Sr. Director, Financial Planning & Analysis
UNDERSPEND CLAWBACKS
• Manage variance in the context of major areas of IT spend
like software, hardware, and internal/external labor.

• Identify spending trends and the specific line items and cost
center owners that are driving variances.
• Monitor OpEx and CapEx variance and your mix of fixed
versus variable costs.
Caesars Entertainment success with Apptio
• Reduced annual budget variance by 55%
• $500K annual savings from datacenter
consolidation

• Automated manual processes to increase rate and

fidelity of reporting

• Optimized infra footprint before provisioning net-

new infra

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 2 LABOR
SHACKLES

High-cost labor locked up on low-value projects,

while low-cost labor yields low productivity.
Inefficient legacy apps and infra hoard more
than their share of DevOps labor, starving
strategic projects of resources.

Why does this happen:

• Labor costs reported without context of roles,

location, or headcount.

• Poor visibility into fully-burdened labor costs

and unit rates by department, location,
contract, etc.

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“Now we can see across teams, who’s working more,
MAKE INFORMED who’s working less, who could use some help. We can
STAFFING DECISIONS drill into that data, slice and dice to see what our most
labor intensive processes are, what steps to improve to
make the process more efficient.”

Best Practice: Gunther Schultz, VP Business Operations

AVOID HEADCOUNT ALLOCATIONS THAT DON’T

ALIGN TO BUSINESS PRIORITIES
• Manage hiring of internal and external labor against plan. Fannie Mae success with Apptio
• Re-configured teams and tasks in
• Understand and compare average monthly cost of staff
business operations
across geographies and role types.
• Closer collaboration with the business
• Identify outliers to responsibly shift internal/external labor mix
on investment
or change hiring plans.
• Retired orphaned infrastructure

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 3 INFRASTRUCTURE
BEDLAM

Brittle, legacy infrastructure puts your business

at risk.
Overprovisioned infrastructure locks up capital
that could be better used elsewhere.

Why does this happen:

• Costs reported without understanding cost

drivers or volumes.

• App owners don’t understand how

infrastructure costs drive their app TCO.

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“Cost optimization initiatives have resulted in lowering
UNDERSTAND operating costs for some services, offsetting the
INFRA COSTS AND TRENDS expense of standing up new capabilities. With the
knowledge and insight of where consumption costs
are driving up operating expense, business units can
now make informed decisions to help guide investment
Best Practice: towards new service initiatives or improved service levels.”

Rolf Oswald, AVP of Progam Management Office

REDUCE WASTE FROM OVERPURCHASE AND
UNDERUSE
• See what’s driving infrastructure costs across network,
compute, storage, and data center assets.
Great-West Life success with Apptio
• Monitor how much infrastructure cost goes to
• Saved $7M annually on infrastructure and $4M
supporting applications.
annually through application rationalization
• Understand how infrastructure costs break down across
• Eliminated over 500 spreadsheets
internal and external labor, software, hardware, and facility/
power costs. • Reduced TBM analyst time dedicated to preparing
and reviewing results by 50%

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 4 CLOUD
SPRAWL

Cloud OpEx spending accelerates without

warning, leading to resource constraints.
TCO analysis paralysis hinders migration from
legacy to cloud.

Why does this happen:

• Cloud costs are scattered due to

purchasing sprawl.

• Public cloud bills are hard to decipher and

omit indirect costs.

• Niche cloud cost reporting lacks

context of broader IT business.

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“Apptio is crucial to managing our migration to cloud.
PRIORITIZE PUBLIC CLOUD Our strategy in the past relied on internal data centers.
DECISIONS We still own two big data centers but we are now
looking to write those off as well, saving about €50
million. We started that program two months ago and
the only way to accelerate that was based on the data
Best Practice: from Apptio.”

José Silva, VP, IT Shared Services

REIGN IN UNCHECKED SPRAWL AND
RUNAWAY COSTS
• View all your public cloud costs across providers in one
place.

• Monitor public cloud spend and trends by service type, such
as compute, storage, and network.
• Know which departments are consuming cloud services to
proactively manage spend.
Unilever success with Apptio
• Escalated cloud migration, with projected
savings of €50 million
• Right-sized perceptions of legacy costs

• Cut spend in half by reducing projects from 650

in 2015 to 33 focused project areas today

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 5 PROJECT
RENEGADES

IT green-lights projects based on dubious

priorities such as “whoever screams the loudest.”
Projects exceed planned staffing and budget
levels, requiring rebalance and reallocation of
project resources.

Why does this happen:

• Disjointed reporting of labor, vendor, and

ongoing run costs obscures the true total
cost of projects.

• Fuzzy connection between projects and the

business strategies they support or business
units that benefit yields poor accountability
for costs.

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5 ALIGN PROJECT RESOURCES “We went from clumsy conversations about whether we
had the right numbers to value conversations about
TO BUSINESS PRIORITIES what services they needed and which they didn’t.”

Lisa Stalter, Senior Director, IT Planning & Governance

Best Practice:

STOP BASING PROJECT INVESTMENT DECISIONS

ON GUESSWORK Cox Enterprises success with Apptio
• Incorporated ongoing run costs into project
• Provide trade-offs to the business to better align project and
application investments to business initiatives. funding decisions by the business

• Moved 60% of back-office workloads to

• In business terms, explain where project costs are going
across each BU. public cloud

• Rationalized 150 contingent labor contracts to 5

• Quantify how much IT spend is going toward run costs versus
growth investments and projects. key managed services partners

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 6 APPLICATION
EXCESS

Over time, the business accumulates multiple

applications with overlapping business
capabilities.
Business stakeholders do not trust app TCO
calculations and procure their own shadow IT.

Why does this happen:

• IT quantifies costs in infrastructure terms the

business can’t assign value to.

• App TCO analysis is ad hoc and

point-in-time.

• IT and business stakeholders don’t align to

app TCO calculations.

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“Now we can talk to our C-suite about pulling
RIGHTSIZE YOUR applications out of our environment that don’t have
APP PORTFOLIO a place. Not pulling them out haphazardly, but being
very thoughtful and provocative about which ones that
we actually go and touch.”

Best Practice: Bennetta Raby, System Director, IM Strategy &

Performance Improvement

RETIRE HIGH-COST/LOW-VALUE APPS AND

REPURPOSE SAVINGS
• Quantify the business value your applications deliver by tying
cost to business drivers (e.g. cost per web visitor, order, etc.). Christus Health success with Apptio
• Tied $60M growth in app spend to increased
• Know the cost of top applications by run versus dev,
demand for operating resources
infrastructure, and projects.
• Mapped 1,200 apps to the TBM Taxonomy
• Show how BUs are consuming each application, along with
the associated costs. • Assigned a dollar value to nine major service
categories specific to IT

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 7 UNCHECKED
CONSUMPTION

Business units consume IT services like they’re free,

unlimited resources.
BUs do not understand or trust the allocation of IT
costs—and resent their lack of choices.

Why does this happen:

• BUs don’t know their ongoing IT run costs and

technology investments.

• IT costs are shown at technical levels, not in

language the business understands.

• Simplistic allocation methods hide levers to

change BU share of costs.

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“I had been, without having a name for it, trying to
DRIVE SHARED ACCOUNTABILITY create a TBM mindset at Maritz—a business approach
FOR IT COSTS to IT, in which it’s easy to show how consumption drives
cost. We tried to do it ourselves using spreadsheets.
We had thousands and thousands of rows of data and
it would take us days to get data out of the system.
Best Practice: Now our businesses draw a straight line between their
consumption and their cost.”
PREVENT THE BUSINESS FROM CONSUMING
Gerry Imhoff, CIO
TECHNOLOGY LIKE IT’S FREE:
• In business language, explain what each BU is getting for its
dollars and what they can do to impact bottom line costs.

• Align IT projects and investments to business initiatives
and sponsors.
• Identify cost outliers by benchmarking IT spend per
employee across BUs.
Maritz success with Apptio
• Embedded TBM into the service culture, moving
from cost center to business problem solvers
• Reduced IT spend by nearly 40%, meeting the cost
reduction mandate of $18 million

• Automated cost transparency, eliminating

MOASS.xls (the Mother of All Spreadsheets)

• Self-funded $4M in new technology imperatives

over 2 years

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 Summary:
With more pressure than ever on IT organizations
to build trusted relationships with their non-IT
stakeholders and every IT investment under an ROI
microscope, CIOs need to get started today with
Technology Business Management. Hundreds of
respected enterprises—including Hewlett Packard
Enterprise, Nationwide Building Society, CHRISTUS
Health, RBS, Cargill, Allstate, BCP, and Clorox—
are using Apptio Cost Transparency to gain full
visibility into IT costs, drive shared accountability,
and partner with the business to prioritize high
value activities that drive growth.

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“The greatest benefit of Apptio that I saw
in my prior career and that I’ve seen here
at KeyBank is that it takes the mystery out
of IT cost and really gets to a business
conversation.”
Amy Brady, CIO

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