Metering IT Assets: Chargeback/Showback 101

Transcription

1 Meter it - Optimize it Metering IT Assets: Chargeback/Showback 101 Linda Cole Director of Sales, Americas Speaker Eistein Fosli Founder Speaker

2 Today s Agenda Industry Trends and Economic Backdrop IT Chargeback Goals Implementing IT Chargeback The process Customer Cases Benefits of IT Chargeback

3 Industry Trends and Economic Backdrop Software licensing is complicated enough in its own right.

4 Industry Trends and Economic Backdrop 43% of organization increase their risk of falling out of compliance because of not having sufficient process and automation in place to manage their licenses. Source: International Data Corporation (IDC)

5 Do you have an IT chargeback system in place? IT Chargeback: Bill internal users, groups, and departments for use of software and other IT resources, based on actual usage. 1

6 Do you have an IT chargeback system in place? Internal customers can look at what they pay for: servers, compute time, storage, etc., and compare it to what Amazon charges. It puts IT in an uncomfortable position. Source: Julio Gomez, co-founder of Innovation Counsils LLC.i The bill of IT for each entity is valuable. Source: Debe Gash, CIO of St. Luke s Health System 1

7 Key Chargeback Functions Data collection functions Account table maintenance Rate setting Billing & reporting Administrative functions such as: Budgeting activities Pricing decisions Usage variance analysis requests Business general ledger & accounting Cost allocation decisions Capacity & usage trending activities

8 Avoiding Situations Like This

9 IT Chargeback Goals Considered fair by most business users 1

10 IT Chargeback Goals Easy for the IT to communicate the IT costs with the business 1

11 IT Chargeback Goals Easy for IT to manage, control and verify 1

12 IT Chargeback Goals Encourages optimized IT resource usage

13 Implementing IT Chargeback IT Chargeback Process 1. Target 2. Define 3. Test 4. Deploy Corporate Policies and Procedures GOAL: Transition from a cost center to a value center

14 Facility Servers Network Staff Software Departments Projects Companies/ Legal Ent The Cost Centers Chargeback process Cost Generators Cost Centers

15 Increase Assets Efficiency CUSTOMER CASES

16 Customer Sample: Reduce Cost REDUCED STORAGE WASTE

17 Customer Case 1 Exponential Increase in Storage Cost Storage cost increase Year 1 Year2 Year3 Storage cost Although storage units cost less each year, a customer had an exponential increase in their storage cost. (Year 1, storage cost was 1.14 MUSD, Year 2, it was 1.85 MUSD, and Year 3 it had grown to 3.57 MUSD. I.e. storage cost tripled while storage volume increased more than x 8!) Even though storage is cheap, managing the service is not. The company needed to change the laissez faire attitude towards storing and keeping data, and make sure employees cleaned up data no longer in use.

18 Customer Case 1 Exponential Increase in Storage Cost Storage cost increase Storage cost Solution: By mapping actual usage to projects, it is easy to charge projects for their storage usage. This is a strong incentive for project owners to make sure projects are cleaned up upon completion Year 1 Year2 Year3

19 Support Business Process Improvement: DOCUMENT SOFTWARE NOT IN USE

20 Statoil Document Software not in use... Usage reporting to support a remix of licenses or to reveal training needs Site Bergen Caracas Copenhagen Harstad London Stavanger Applications Active time Distinct Active time Distinct Active time Distinct Active time Distinct Active time Distinct Active time CNTRASSIST Distinct DATALOAD DSPACE DSS DT3DV DTEXPLORER DTEXPRESS DTGUI DTINTERPRETER EARTHCUBE FMP FSTTRK FZAP LGCIO

21 Action Item: More Training or Cut in Maintenance? Statoil Why is the product DSPACE only being used in Stavanger? Site Bergen Caracas Copenhagen Harstad London Stavanger Feature Active time Distinct Active time Distinct Active time Distinct Active time Distinct Active time Distinct Active time Distinct CNTRASSIST DATALOAD DSPACE DSS DT3DV DTEXPLORER DTEXPRESS DTGUI DTINTERPRETER EARTHCUBE FMP

22 Reduce Risk: NEGOTIATE A DIFFERENT SOFTWARE AGREEMENT

23 Statoil/Halliburton Once upon a time Maximum Concurrent Users Agreements Took advantage of different license agreements by selecting agreements that best fit usage patterns: Duration (h) Usage Distribution OW Used Licenses/ Feature Changing from max number of concurrent licenses to enterprise agreement based on average maximum concurrent users Open it, Inc. All rights reserved. 35

24 Statoil/Halliburton Once upon a time Maximum Concurrent Users Agreements Took advantage of different license agreements by selecting agreements that best fit usage patterns: Duration (min) Usage Distribution OW Used Licenses/ Feature Changing from max number of concurrent licenses to enterprise agreement based on average maximum concurrent users Open it, Inc. All rights reserved. 36

25 1-May 2-May 3-May 4-May 5-May 6-May 7-May 8-May 9-May 10-May 11-May 12-May 13-May 14-May 15-May 16-May 17-May 18-May 19-May Statoil/Halliburton New Enterprise Agreement based on daily maximums at each site Max Used Licenses Daily Max Licenses Usage of OW Site9 Site Site 7 Site 6 Site 5 20 Site 4 Site Site 1 O p e n i T, I n c. A ll r i

26 Increase Assets Efficiency CHARGING MORE AT PEAK HOURS

27 License Efficiency Chart 8

28 License Efficiency Chart 8

29 Use Heat Map to Determine Prime Time

30 Cut Cost GET RID OF DORMANT USERS

31 Following up Named-User Agreements 4 3

32 Following up Named-User Agreements 4 4

33 Sad Stories

34 Sad Story A user of the software using it for 8 hours on Sunday afternoon pays the same as a user utilizing 8 licenses for one hour during peak time. Which units/measurements are needed? 46

35 Sad Story During one month, there is only one user of an application. This user has used the application for 20 minutes only, but will have to carry all costs related to that application for the full month. 47

36 Facility Servers Network Staff Software Departments Projects Companies/ Legal Ent The Cost Centers Chargeback process Cost Generators Cost Centers

37 Facility Servers Network Staff Software Departments Projects Companies/ Legal Ent The Cost Centers Raw data Threshold unique ad-hoc filter concurrency and grouping Filtered raw data PPU Chargeback valuesprocess cost calculations creating invoices Cost values Invoices distribute Cost Generators Cost Centers

38 User/Cost Center Hierarchy We need to understand the current structure : Mapping from Users to Cost Center using Active Directory? Or what about SAP HR? Do the costs centers belong to a division or Legal entity, or are they across all? (1:M, or M:M) Are Project ID s used? Cost Center P1-D D5-C Division/Legal Ent Production Design

39 Chargeback Types of agreements: Base only, fixed payment for access/service No base; only pay for usage Base payment includes free usage up to a limit; only pay for extra usage Usage is metered as a function of: Elapsed time # of distinct users or devices # of concurrent users or devices Combinations O p e n i T, I n c. A ll r i

40 Update the Cost Catalog 1

41 Update the Cost Catalog 1

42 Sample Invoice A sample of an auto generated invoice Invoices ed at regular interval, typically once a month. We advise excel or.pdf attachments or a link to SAP (BAPI)

43 Sample Invoice

44 Benefits of IT Chargeback Cost awareness Recognition of the value Resource flexibility Understanding the complications and charges for requesting an IT service Accountability 1

45 IT Chargeback Takes You to a Higher Level Increased Resource Flexibility Optimization and negotiation power Better employee productivity Better financial control Stay Compliant 66

46 Eistein Fosli Founder Linda Cole Director of Sales, Americas For more information visit our website: Q & A 67