Who Ya Gonna Call to Know Your Actual IT Infrastructure Costs? | Article

MoneyAt PPG Industries the IT infrastructure group funds each IT department. It used a home-grown, internal system to determine its IT costs. “It wasn’t a black hole, but it wasn’t detailed enough,” says Denise Vay, senior IT finance manager. And it was costly to maintain.

The infrastructure group was spending a lot of time trying to figure out the appropriate allocations. “This wasn’t a core competency for us,” she explains. So the paint, chemicals and glass manufacturer decided to outsource these IT financial and business management processes to ComSci.

“You can’t manage what you can’t see,” says Jeff Yoder, vice president, strategic partnerships and global marketing strategies, ComSci. The ultimate goal of ComSci’s solution is to “help IT leadership optimize the cost of IT services delivery by bringing complete visibility to technology consumption and spending.”

Part of the solution is communicating in what seems like two different languages. “The universal language of business is finance. But IT guys talk technology. ComSci’s solution helps the IT team speak finance,” says Yoder.

How PPG Industries uses the platform

Vay says PPG Industries is tracking almost 100 different IT infrastructure and network services within ComSci’s Saas-based application modules. PPG also relies on ComSci to manage the process of data aggregation for its monthly IT service billing and reporting production cycle—a business-process-as-a-service (BPaaS).

Now PPG Industries can determine IT consumption and costs down to the individual employee. In fact, each business manager, IT manager and employee can log onto ComSci’s system and see what their portion of the PPG organization is consuming and being charged for.

Managers get a role-based departmental look for true demand management. “Our management team starts by looking at the big numbers,” says Vay. “Then we drill down to better understand consumption.” For example, the IT infrastructure department uses the ComSci platform to determine if employees with Blackberries used more IT infrastructure services than those with iPhones.

Vay says the ComSci application is “simple” to use. She says she can set up an entire department in 10 minutes. “That was not possible with our in-house system,” she notes.

The big surprise was the state of the company’s data before outsourcing.

“We had to get our IT systems of record data in order,” she recalls. This turned out to be “a big undertaking.” This included validating its global IT data with the company’s HR system. In essence, “we had to populate some transactional data fields we never did before,” she explains.

Benefits

Budgeting is now easy for PPG’s IT managers. Before outsourcing to ComSci they frequently called Vay and her colleagues for numbers. “We don’t get those calls anymore,” she says. In fact, the company’s budget director fretted the IT department managers weren’t preparing their second half of the year budgets because he hadn’t received any calls. “The ComSci system enables managers to see the numbers they need,” she says. Because of this, PPG’s annual IT budget process is simplifier and takes a fraction of the time.

Invoicing each business department for its IT consumption is now much easier. (Each month there are about 30,000 journal entries.) A process which used to take up to seven business days now takes just 48 hours, Vay reports.

A significant unexpected benefit has been the ability to clean up and retire IT services PPG Industries was no longer using. For example, it discovered it was paying the mobility costs of employees who had left the company.

Today the manufacturer doesn’t manually process any raw data. Amazon Web Services sends its monthly bill directly to ComSci, for example.

The software also allows the IT infrastructure department “to run lean and mean.” Vay says the manufacturer keeps the IT head count low and instead relies on tools like this one to guide strategic IT services decision-making.

Helping to make cloud computing decisions

ComSci’s solution has helped companies determine how to embrace cloud technology. “Companies need to know their internal costs so they can compare their actual base costs with a cloud offering,” Yoder explains.

He says this is especially true for infrastructure-as-a-service offerings. “Amazon, for example, charges $5 per gigabyte for infrastructure storage. The internal IT team has to determine and track its actual costs to provide the same service before it can make an educated decision,” Yoder notes.

Vay says PPG Industries is still working on its costing model. “What is the true cost of a business application on a virtual server? That’s a hard nut to crack,” she says. PPG is much closer to accurately calculating these costs with ComSci’s solution.

The ComSci story

Forty years ago large global companies wanted to know the actual cost of a data circuit linking London with Mumbai. Sensing a business opportunity, a group of network entrepreneurs started Communication Sciences. Their sole goal was to help these multinational corporations determine their actual network services spending.

In 2005 Bob Svec and Dr. Alan Maltz, a professor of IT strategy at Stevens Institute of Technology in New Jersey, purchased the company. The goal was to build on the network services intellectual property and expand the offering to include all IT services. The goal: complete IT cost transparency.

“We apply financial rigor and consumption data automation to IT delivery,” Yoder says.

Currently, the outsourcing supplier helps its global 1000 clients manage over $50 billion in IT spending. Yoder says the solution spans vertical industries. “IT cost transparency is a horizontal IT management process that is fairly similar for manufactures as it is for banks,” he points out.

Vay says that PPG Industries went through a rigorous vendor selection process, down-selecting to ComSci and a second ‘finalist’ for their homegrown IT service billing replacement solution. At first she was worried about the difference in size between the two partners. “I said, ‘They have how many people? How can they support us?'” The final reckoning: “It’s been great!”

 

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