©2019 by Align Financials

Businessman

Showback / Bill of IT

Reducing costs while investing in new initiatives that align with business goals is a complex challenge. And most IT infrastructure is not designed to work in a continuous, cohesive process.  As such, they fail to provide insights into why and where budgets are allocated and spent.

Even mature, experienced companies struggle to identify ‘Actual’ costs that exist within daily business operations. This makes it challenging to allocate and defend costs assigned out to other business units.

As such, there is a ‘rock’ that sits inside SG&A that is constantly scrutinized.  Unfortunately most tools are so arduous to implement that the return is not always worth the investment.   That's where Align can help: by leveraging ServiceNow, we enable our customers to address this challenge and confidently map costs to consumers and achieve cost-effective, defensible, showback.

CASE STUDY: Showback / Bill of IT

Align's customer understood that it needed to first establish a financial blueprint that spanned the expanses of the enterprise to capture all manner of relevant financial data.  From production line output to service-related costs of IT, the customer required a robust modeling solution that could enable their office of the CIO to align investments with business goals, while weighing operational performance against budgets, adjusting capital planning accordingly. Beyond modeling, the customer also required a solution that could track the total cost to deliver and maintain services provided both internally to product development, and externally toward delivered products and services. To achieve total cost transparency, the customer needed a means to track utilization, usage, and operational performance metrics to provide a measure of value or ROI. Costs, budgets, performance metrics, and changes to data points needed to be tracked over time to identify trends and the impact of changes to underlying cost drivers- helping management address key drivers in escalating costs to improve planning.

 

THE SOLUTION: Leverage ServiceNow’s Iterative Cost Tracking Model to Deliver a Defensible Bill of IT to Each Business Unit

Align’s support for the customer began with the task of identifying cost-drivers across all unique and segregated business units. We then calibrated and implemented a preliminary financial model, built on activity-based costing principles, that would allow for the nuanced interpretation and synthesis of financial data to make it ‘business-friendly’ for managers of all statures to use. The combination of our expertise and the extensible capabilities of ServiceNow enabled the IT Finance team to attain clear visibility, including all cost driving factors related to internal operations as well as customer-facing costs that result in delivered products and services. We collaborated with the customer to develop a model that was rich in content and scalable to afford continued modification and growth. The Align solution combines elements of activity-based costing, business intelligence, operational monitoring, and performance dashboards to deliver best-in-class financial intelligence to empower leadership to act with conviction and make required tactical and strategic decisions.

 

THE RESULT: Costs Were Mapped to Each Business Unit and IT Was No Longer a ‘Rock’ in SG&A but rather a 'Zero-cost' business unit

The customer was able to achieve greater visibility and transparency related to costs spanning the entire enterprise, enabling leadership to recognize and manage ROI with pinpoint accuracy for individual projects, programs, and business units. Moreover, the customer was able to benefit from continuous improvement of processes, with the model evolving over multiple calibrations and iterations of data inputs. The resulting solution at once gave the customer a means to genuinely track and report on cost-driving factors, while offering sophisticated analysis tools and resources to extrapolate cost instances for precise reporting and follow-up action.