About cookies on this site Our websites require some cookies to function properly (required). In addition, other cookies may be used with your consent to analyze site usage, improve the user experience and for advertising. For more information, please review your options. By visiting our website, you agree to our processing of information as described in IBM’sprivacy statement. To provide a smooth navigation, your cookie preferences will be shared across the IBM web domains listed here.
Digital transformation with Apptio
Deploying Technology Business Management (TBM) model at IBM
Intentional hybrid cloud adoption leads to successful transformation and continuous innovation. With this objective in mind, the Chief Information Officer (CIO) at IBM initiated an effort to comprehensively analyze business costs and spending optimization. This initiative aimed to reallocate the IT budget toward transforming the hybrid cloud environment. Previously, when the CIO encountered a cost challenge, it made decisions from a financial perspective. By taking an evenly peanut butter spread approach, the organization risked making business decisions without having the broader picture.
The CIO organization relied on multiple data sources and tools to have complete visibility on how resources aligned to initiatives, objectives and key results. The organization pulled ledger data and could tie out with great accuracy but missed visibility to the overall finance, IT and business view. To make the right decisions, the CIO needed information and details to invest in high-priority initiatives like application modernization, rather than investing in stranded assets and lower priority applications.
The challenge called for a solution that could provide insights into the overall USD 2.5 billion IT stack and help address the following:
- lack of alignment between IT and business goals
- lack of IT spending transparency to make impactful decisions
- opaque total cost of ownership (TCO)1 to run applications and on-premises data centers
- public cloud sprawl and increased transformation costs
- optimize spend
1 Application TCO includes software licenses and expenses, labor cost for development and support, infrastructure, infrastructure labor support and data center lease expense.
The CIO organization selected Apptio® to transform IBM’s hybrid cloud environment and deploy the Technology Business Management (TBM) model. The journey started in 2021 with a proof of concept (POC). The scope included the Apptio Costing (formerly ApptioOne) (link resides outside of ibm.com) implementation in the US with a primary focus on its CIO Hybrid Cloud Platform organization. The initial scope included USD 1.5 billion of IT cost. The POC results provided justification to expand the scope and include the remaining USD 1 billion of IT cost to deliver a global view of the CIO IT cost.
IBM acquired Apptio in August 2023. This gave the CIO a unique opportunity to scale the Apptio initiative that started in 2021, adopt the Apptio integrated suite and showcase its impact in an enterprise environment by being Client Zero. The Apptio integrated suite included Targetprocess (link resides outside of ibm.com) and the Apptio Planning (link resides outside of ibm.com) capability available in the existing Apptio Costing model.
The augmented Apptio initiative increased cost transparency and enabled the CIO organization with application TCO2 visibility by supporting data-driven decisions based on true costs of applications and real time business insights.
2Application TCO includes software licenses and expenses, labor cost for development and support, infrastructure, infrastructure labor support and data center lease expense.
Apptio Costing provided cost transparency and data to analyze, optimize and plan IT spend by providing insights into existing pieces of information (e.g., general ledger, vendor data, human resources data) to determine applications’ TCO, identify stranded or IT cost waste and execute IT benchmarking to improve productivity.
Targetprocess provided an enterprise agile planning view and the ability to perform portfolio and resource management. It facilitated strategic planning by having visibility on how resources align to initiatives, objectives and key results. Additionally, it helped understanding the cost and value associated to the initiatives.
Apptio Planning offered an integrated labor resource planning and budgeting view, information primarily used by the finance and business operations teams.
The foundation behind the products is TBM, a framework that offers stream lenses into different views and creates a common language amongst those views. The financial, IT and business views help cross-functional teams to obtain information related to their business units and display data by cost pools, towers and solutions, respectively.
The cost and consumption transparency achieved through the Apptio integrated suite has enabled the identification of key optimization opportunities. The Apptio transformation journey has also provided insights to:
- Application TCO3 data
- Stranded IT cost
- Third-party software expenses
Insights and application TCO data have helped rationalize the CIO portfolio, make more informed decisions about applications criticality, consumption and spend. It has also helped reinvest in transformation initiatives and establish performance optimization targets.
3Application TCO includes software licenses and expenses, labor cost for development and support, infrastructure, infrastructure labor support and data center lease expense.
- Leverage strategic solutions to further optimize productivity through automation and AI. Strategic integrations include IBM Instana®, IBM Turbonomic®, IBM watsonx™ and ServiceNow (link resides outside ibm.com).
- Expand the enterprise business management model across IBM.4
- Expand the Apptio integrated suite deployment by including Cloudability (link resides outside ibm.com) for cloud cost management and optimization. This cloud financial management platform improves visibility, optimization, governance and more across cloud environments. The platform currently supports multiple cloud services providers, including Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform and Oracle Cloud Infrastructure. IBM Cloud® support is lined up for the second half of this year.
Cloudability assists teams managing cloud services cost across multiple providers and attaining the maximum value out of the cloud. It is not about reducing cloud usage but optimizing cloud services and resources (e.g., workloads). The information gathered by the tool also helps with decision-making by providing insights into the resources or capacity required to achieve optimization and avoid performance issues.
The CIO organization has deployed Cloudability for the IBM Software organization and is currently working with the IBM Consulting® team. There are plans to expand the platform across all IBM business units, including CIO.
The Software team initiative started in January 2024 by onboarding the AWS accounts. Initially, teams followed a set of iterative manual instructions to onboard the AWS accounts into Cloudability until they were successful. Onboarding entails bringing the cost of services and usage data directly from the golden source. The process was improved by identifying areas for automation and documenting simple steps for users to follow.
The CIO team has onboarded over 1,000 AWS accounts into Cloudability using custom automation. Incorporating automation reduced the onboarding process duration to less than 15 minutes.
- As with any major organization transformation, organizational change management (OCM) is an important function within the TBM program. Assigning dedicated staff to manage OCM was a critical success factor.
- The transformation journey comprises the tools, cross-team collaboration, processes and new ways of working. This was key to achieve alignment between the IT and business goals to roll out the solutions across the organization.
- Empower teams to enable the TBM model. Provide TBM education and help teams understand the impact their roles have on achieving results and embrace change by understanding the benefits.
- Drive data quality through standardized processes, tagging and attributions. Data is used to make business decisions. It is critical to ingest the TBM model with accurate data.
- Avoid scope creep. Focus on continuous improvement over perfection. Prioritize enhancements and plan accordingly.
- Align the data ingested to the TBM model via ApptioOne into the proper cost pools to display accurate information in the financial, IT and business views.
- Cloudability improves cross-organizational collaboration to make more informed decisions about the use and expenditure of cloud services across cloud service providers. Leverage its benefits when engaging in mergers and acquisitions. The platform gathers cloud usage and spend as well as how it is changing. Teams are responsible for evaluating and implementing recommendations.
- The shared responsibility model is important to implement, but it comes with challenges that must be continuously addressed through workshops and holding teams accountable for cloud usage.
The Chief Information Officer (CIO) organization leads IBM’s internal IT strategy and is responsible for delivering, securing, modernizing and supporting the IT solutions that IBM employees, clients and partners use to do their jobs every day. The CIO strategy encompasses creating an adaptive IT platform that makes IT easier to access across the enterprise, accelerates problem-solving and serves as an innovation engine for IBM, catalyzing business growth.
Legal
© Copyright IBM Corporation 2024. IBM, the IBM logo, Apptio, IBM Cloud, IBM Consulting, IBM Instana, IBM watsonx, and Turbonomic are trademarks or registered trademarks of IBM Corp., in the U.S. and/or other countries. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates.
Client examples are presented as illustrations of how those clients have used IBM products and the results they may have achieved. Actual performance, cost, savings or other results in other operating environments may vary.
