Management

Run IT Like a Business with Apptio

Apptio’s software gives businesses a better grasp of their IT spending and areas for efficiency.

CIOs and technology managers are learning to better manage their IT costs and their return on investment with the help of a software modeling tool created by Apptio, a Bellevue, Wash.-based firm that delivers on-demand applications used to analyze IT costs as they relate to companies’ bottom lines.

Founded in early 2007, the company’s Technology Business Management subscription service creates customer infrastructure models and then produces dashboards and reports that customers can use to monitor ongoing costs; model the cost of making changes, such as moving from an in-house to a hosted e-mail system; and improve transparency for CIOs, says Chris Pick, chief marketing officer at Apptio.

“When we talked to CIOs, one of the top items on their plates was finding a way to run IT more like a business,” Pick says. “Technology business management is a toolset for the CIO. Even in the worst economic market, we’ve had explosive growth because we are helping CIOs understand their cost structure.”

IT Insight

Delivered via a software as a service platform, Apptio TBM provides best-of-breed applications as an integrated suite. Apptio’s application focuses on methodologies to manage the cost, quality and value of IT services. With CIOs increasingly looking to transform their organizations from technology cost centers to internal service providers, Apptio’s tool helps managers consider new solutions and spotlight areas for cost reduction. For example, delivering IT services, such as e-mail and access to marketing engines, in the framework of a supply chain can lead to reduced costs and improved IT quality, Pick says.

Using the TBM Service Costing solution ultimately helps CIOs better understand the costs associated with delivering IT services so they can feel more confident discussing with CEOs how their departments make IT investments, Pick says. By managing costs, CIOs can improve efficiency and the quality of IT services without affecting service levels at their company, he adds.a

Apptio’s Service Quality and Utilization and IT Benchmarking software gives CIOs more transparency into the costs of IT services. The software enables organizations to quantify the financial impact of business decisions and to identify areas for cost optimization, Pick says. “They want to understand the capital expense that IT is costing.”

Lead by Example

While providing IT financial management strategies to its clients, Apptio has implemented several technologies to make its 115-employee shop run more efficiently. The company uses Aruba wireless networks, Barracuda Networks security tools and Active Directory implementation in its effort to optimize IT costs.

Deploying a wireless LAN enables Apptio to manage its mobile workforce and gives employees secure access to the network with relative ease. Having an automatic wireless connection makes employees more efficient at their jobs, says Herman Knief, director of IT operations at Apptio. “The Aruba wireless network creates a seamless work environment,” Kneif says. “It’s one less thing that our field personnel have to worry about. Aruba is there and reliable, so [employees] can focus on their jobs.”

Knief says using Barracuda Networks for spam and virus protection is a “good, reliable business move” because the software can work effectively in both a large corporate enterprise or small business environment.

Apptio’s Barrcuda spam and virus solution protects e-mail servers from spam, viruses, spoofing, phishing and spyware attacks. “It’s not going to be a forklift upgrade,” Knief says. “We look for clusterable, scalable ways to grow with the company.”

Deploying Microsoft Active Directory, which provides a central location for system administrators to store information about users and assign access rights, creates a simple framework. Implementing a single sign-in for user access can benefit businesses ranging from small companies with a handful of users all the way to global companies with thousands of users, Knief says.

“Active Directory simplifies the process because it provides single sign-in for folks,” Knief says. “Our capabilities are enhanced, and it allows us to be more efficient.”

Demonstrate Value

Using technology to run a business is only one part of the equation, Pick says. IT leaders cannot rely on calculating costs on spreadsheets. They must focus on providing value to their customers, look for ways to drive down the cost of operations and increase the value of the IT department’s role in the business, he says.

“There are companies that want to understand the cost of ownership,” Pick says. “They are looking to get the best return on their investments.”

Five Tips for Better IT Planning

Keep your goals simple when adopting an IT organizational plan. When starting out, companies should consider a single-use case, such as implementing Active Directory, instead of trying to tackle too many IT solutions, says Chris Pick, chief marketing officer at Apptio. “You don’t want to be too aspirational and have really lofty visions,” Pick says.
Organizations should train staff members to ensure that technology is viewed as a business component. Combining a business-oriented approach with technology expertise will lead to more efficient operations. “Make sure the staff knows technology-speak and business-speak,” Pick recommends.
Because business leaders can rely on outside vendors to purchase IT services, communication within the business is critical, says Herman Knief, director of IT operations at Apptio. CIOs should establish relationships with CEOs so they understand the costs associated with delivering IT services.
To achieve a more organized IT plan, CIOs need to break down costs for each IT service within a company. By tracking and allocating IT costs, a company will see where spending is being applied within IT, and a cost breakdown will help a company understand where employees are interacting with IT.
Determine the skill sets of your CIO and the processes used to calculate, manage and communicate the cost of IT services, Knief recommends. CIOs who have the ability to track and understand how much it costs to deliver IT services to the business will provide a solid foundation for IT planning. A CIO whose skill set combines technology with business savvy will help a company that is looking to align their business and technology needs.

Rick Dahms