IT Chargeback -- Bridging the Gap between IT and Business

 
Thu, 02/04/2010 - 13:00 — Anonymous

A Blue Line Solution on the IBM Cognos stack

 
The problem:
Nothing is more frustrating than managing IT chargebacks. Business Users struggle to understand them – and IT struggles to explain the true costs of application projects and IT infrastructure. To resolve this disconnect, Blue Line Planning has built a Performance Management Application for IT chargeback on the robust and reliable software stack of IBM. This combination eliminates the risk of dealing with a small software company and managing unfamiliar infrastructure – and yet still provides the best of breed functionality that this business problem requires.
Using a series of dashboards and drill through reports, this application allows IT to quickly and easily set up all their IT projects and programs and provide detailed costing information – including estimating new applications, upgrades, etc. Business users can then – by themselves -- dive into their IT costs and
 
 
 
 
 
 
 
 
see all expenses at irrefutable levels of detail.
The 4 Big Savings:
1.    Effort: by giving direct access to the business users, IT does’t have to put people in the middle to dig up costs, explain allocations, and basically act like finance analysts instead of as IT managers
2.    Synergy: by having all your projects and costs across your
entire “IT business” you can see common issues, consolidate expenses, and otherwise link together projects to save money
3.    Expectations: as businesses look at new projects or adding/ upgrading applications, they rarely understand the true costs. This solution quickly produces accurate proposals on what their entire  IT costs will be – from acquiring the hardware, to managing the project, to long term operating costs.
4.    Application Migrations: Many applications get long in the tooth and cost much more than they should – but the business users won’t part with them and don’t understand that IT can cut their costs dramatically by moving them into the cloud or migrating them to a larger platform.
 
The functional components of this solution are the IBM Cognos TM1 analytic engine and the IBM Cognos 8BI business intelligence platform. However, for predictability and reliability, Blue Line underlies these – as necessary for your environment – with the entire backbone of IBM infrastructure software components:
 
·         Tivoli for compliance, security, etc
·         Clearcase for change management
·         Filenet for document management and workflow
Logical Design:
The Blue Line solution for IT chargeback starts with a full up TM1 model for ABC. Using a multicube approach, the system abstracts “slowly moving” data – such as rates, time periods, currencies and assets, from the “dynamic” data which is constantly being recalculated in real time – such as allocations, depreciation, etc.
Fundamentally, underneath the covers, the system contains a fully functioning Activity-Based Costing (ABC) system – so you can get as detailed as you need to with expenses and expense drivers; as well as constantly tracking and recalculating expenses as drivers change. This includes a number of allocation methods, including recursive allocations where expenses are passed back and forth to departments until they are fully allocated out. This is critical for organizations that have cost centers that have to be fully allocated back to the organization.
In addition, the application contains specialized functionality for handling Cloud and SaaS computing. This allows you to mix and match both premises based computing as well as hosted models – as well as model the short and long term costs of transitioning existing systems and applications to Cloud models.
 
 
Modeling
IT Chargeback is more than just capturing costs, allocating them, and providing visibility to the businesses. One of the key missing elements which the Blue Line solution addresses is modeling. At any point new projects can be created to model various scenarios – without actually committing them to the overall expense model. This will provide not only multiple options to a business when looking at projects and solutions, but it will allow constant reoptimization of overall expenses.
This provides a dynamic capability for IT to look across the entire portfolio to look for specific savings or to find ways to cut costs to meet budget targets.
Integration with ERP
Blue Line has extensive experience integrating the Cognos stack with ERP vendors ranging from SAP, Oracle, and Microsoft, to specialized industry systems. Further, IBM provides adaptors – out of the box – for many systems. Bottom Line – the IT Chargeback system not only integrates with your source systems; but will allow your users to drill all the way back to them to see actual values such as invoices, purchase orders, or any other available data.
Dashboards
A first class analytic system requires a first class interface for its users. As a
 
result, Blue Line delivers the IT Chargeback system with a prebuilt dashboard and a comprehensive set of reports. This will eliminate the constant creation of reports and allow complete on-demand visibility to expenses by users.
 
Technical Architecture
Blue Line uses ONLY IBM technology in its solution. This ensures that from security, to lifecycle management, to server and client software requirements you are dealing with the same industry standard, bulletproof components that you are used to. As a result you can manage the solution with the same people and infrastructure you have today.
What Blue Line provides are an extensive set of models, dimensions, cubes, business rules, reports, and other objects that are created using the IBM stack. All these are provided in a means that allows them to be versioned so they can be maintained. Further, the underlying design of these objects allows them to be customized to individual organizational needs without breaking the overall solution. The only custom code are API interfaces that Blue Line uses for integration or compliance.
This approach provides you with best of breed functionality – but eliminates your risk of dealing with a small software vendor.
Who is Blue Line?
Blue Line was founded in 2005 by former financial and software executives committed to delivering ‘best in class’ performance management solutions. In just under five years, Blue Line has implemented over 400 Planning, Financial Consolidation, Business Intelligence & Data Warehouses to over 130 Global 1,000 clients such as Pfizer, Disney, AIG, Primerica, MetLife, HealthNet, Genentech, and many, many others. Also, as a result of our deep experience, and our unique skills in software development and design, Blue Line offers 3 packaged solutions based 100% on the IBM Software stack:
  • Integrated Forecasting, Planning and Dashboards for Healthcare Providers
  • ABC for IT Chargeback
  • Compliance Dashboard