AM chargeback/ TCO reporting for business services · 2018-04-04 · Project portfolio management...
Transcript of AM chargeback/ TCO reporting for business services · 2018-04-04 · Project portfolio management...
© Copyright 2015 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
AM chargeback/ TCO reporting for business services
Mike Grainge, AM Product Manager Mark Bradley, Product Marketing Manager #HPDiscover-CMS
© Copyright 2015 Vivit Worldwide © Copyright 2015 Vivit Worldwide
“Reduce AM chargeback/TCO reporting for business services”
September 29, 2015
#HPDiscover-CMS
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Mark Bradley
Product Marketing Manager
HP Software
© Copyright 2015 Vivit Worldwide
Today’s Speakers
Mark Bradley
Product Marketing Manager
HP Software
Michael Grainge
Senior Product Manager
HP Software
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Questions
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There was a time when every household had its own water well. ?
Compelling and
realistic business
cases
What should ITFM professionals do to prepare their organizations?
Validate current
cost models
Top three cloud-related challenges
Chargeback and
showback
Determine new
unit
Cost models
Evaluate
Procurement
Models
Identify
accounting & tax
effects
Alignment of
vendor contracts
“Pay as you go”
pricing
Assess
subscription
based models
Evidence of
cost
savings
Shifting to usage-
driven pricing
Compelling and
realistic business
cases
What ITFM professionals do to prepare for Cloud
The opportunity
Maximize investment of company funds and resources to make a difference
Communicate IT value through IT spend trends and baselines by business service, application, business unit, and IT budget categories
Deliver business innovation/growth
Cut costs and manage budgets well
• Visibility
• Resource allocation
• Investment capital
What is your current IT financial baseline?
Total spending
Operations spending
31.9%
63.5%
4.6%
New IT
investments
Operations
and support
Planning
and strategy
Source: Planning and Budgeting Best Practices Benchmark Survey
23%
11%
13%
11%
3%
5%
16%
8%
10% Application management
S/W licenses
Data Center
End user support
Security and continuity
Outside services
Network
Shared service
Other
Source: Implementing Service & Support Management Processes: A Practical Guide Page: 276 -- By Mark E.
Bradley
Expectation/s
IT Services
Performance/$
Request
for service
SLA SLA
Highly
satisfied
Highly
dissatisfied
Consumers
IT Organization
Service Catalog
Gold
Silver
Bronze
Options
Parameters
Levels
OLA UC
Balancing demand and supply Having visibility into your environment is critical
Demand management
Financial management
IT cost / budget
(Volume and price) IT FTEs
IT operating budget
IT demand drivers
Internal business initiatives
Regulatory compliance
requirements
External market forces
IT cost control
strategies
Sustainable
structural improvements
Discretionary cuts
Short term
measured activities IT demand management
Chargeback/cost allocation
Project portfolio management
Service catalog
IT demand
(Quantity and quality)
Internal IT end users
External IT end users
Production and consumption of IT are changing radically … at the same time
Consumerization New consumption demands
The living room The marketplace The back office
Public
cloud
Private
cloud Traditional
provisioning
Mobility: • Bring your own device
Systems of engagement: • Evaluation venues
• Social media
Systems of record New architectures
Cloud New production and sourcing methods
Multiple delivery options emerging for businesses Differentiated by service level agreements (SLAs), price points and length of financial commitment
Private Cloud Managed Cloud Public Cloud Traditional
SLAs
Availability, security, performance, compliance, cost
Customer-defined Negotiated Standard, published Customer-defined
Produce (build and run)
on-premises cloud services
Systems of Engagement
External platform
(Facebook, Google Apps,
Apple Apps)
‘Open services are upon you, whether you would risk them or not’.
Consumers
Broker, integrate and monitor
Building a business service catalog becomes critical Business insight into the IT enabled business services
Cost of IT Infrastructure (monthly)
Server •$125 per CPU
Storage •$0.12 per GB
Cost of IT Service (monthly)
Email service •$5 per User
Payroll Service •$15 per User
?
Business service catalog
Service definition
Consumption rules
Agreed service levels
Service price
Internal solution
Platform (HW)
(Exchange)
Software
(Exchange)
Databases
(Exchange)
Documents
(Exchange)
System
(Exchange)
System
(Lotus Notes)
Service
Server 1
Server 2
Server 3
Exchange
SW
SQL
DB
Policy
Size Limit
Object model and IT services
Logical:
Logical:
Logical:
Physical:
Object model and IT services
Service costing and usage
Business Application
service
Business service
Management
Each stage aggregates cost based on what it consumes in terms of labor, depreciation and external services
Infrastructure services stage (compare to IaaS)
Application services stages (compare to SaaS)
Business services stage
Application
instance
Support Depreciation Projects
opex
Internal External
Labor Non-
Labor
Labor Non-
Labor
Computing Database Data
protection
Storage Network Facilities
Raw cost data
Financial cost automation example
Stage 1
Facility costs
Project
initiation
Project
execution
Project
completion Stage 2
Power costs
Stage 3
Security costs
Stage 4
Labor costs
Calculate Linux server service cost scenario
Stage 1
Backup costs
Project
initiation
Project
execution
Project
completion Stage 2
Patch costs
Stage 3
DR costs
Stage 4
Labor costs
Stage 1
Hardware costs
Project
initiation
Project
execution
Project
completion Stage 2
Software costs
Stage 3
Maint. Costs
Stage 4
Cost per server
Calculate
data center
hosting costs
Calculate
managed
service costs
Calculate
server costs
Full lifecycle use case: Linking project cost to service cost
Depreciation Support Computing
Consumption
Volume
Consumption
Volume
Allocation
Rule
Allocation
Rule
Storage
Proposal
Estimation in
Application
Development: • Run assumptions
based on
Infrastructure
Service price list
• Forecast into
Infrastructure
Service demand
Run rate costs in
Operations
tracked by
service
Project analyst selects quantity of units
Infrastructure Service Price
List (Unit Cost)
Capex Opex
Proposal assumptions:
build, run and maintain
Project forecast & actuals
Project final
Common IT data model: Projects mapped to services
Maintenance
Total Run Rate
Cost of Business
Service X
Showback
Budgeting
Cost control
BSM, NNM, SE Insight-Control
PPM AM
SM Service Providers
CSA Excel\External
Cost Allocation Engine
uCMDB (topology)
HP IT Financial Management
Financial Management Chargeback with Asset Management
The HP Software Asset Management solution
Business Information Sources
Procurement Financial
Management
Contract Management
Software Asset Management
Asset Portfolio Management
Dashboards, Reports, Scorecards
Content
Content
Asset Management
TCO / IMAC processes / Assets Statuses / Software Compliance /
Costs allocation / Contracts
ERP
•Purchase orders
•Catalogues
•Costs Contract
Management
•Terms and conditions
•Leasing contracts
Financial Management
•Budets
•Depreciations schemes
Project Management
•Projects
•Labor costs Inventory Management / Application
mapping
•Network devices
CMS
•Business Services definitions
•Application mapping
Active Directory
•Employees
•Departments
•Locations
•Roles
Service Management
•Calls
• Incidents
•Changes
Asset Management is part of an eco system Information owned by each system
AM tracks the associated costs… and more
report cost for compliance
reconcile users, assets, projects and contracts
automatic allocation, chargeback
Acquisition (lease or not)
Operational
Changes costs
Maintenance contracts costs
Links and categorize costs
Assets
Users
Cost Center
Cost categories
Reconcile with Budget Center and budgets
Financial periods
Track Costs
Re-allocates costs
Manages contracts
Tracks software compliance
• Chargeback to end users induces expense optimizations
• Entitlement Management and Software counters that include usage and entitlement dimensions allow software investments optimizations
• Automation around leasing contracts return allow to avoid late return penalties
• Reflect of real status of asset and integration to ERP fixed assets allow fixed asset taxes decrease
29
Beyond cost understanding, Asset Manager allows savings
• Charge back rules reflect your business organization • Triggered by periodic or database events • On certain objects • For a certain amount • From a source cost center • To a target cost center
• Two expense lines are created for each charge back • One crediting a cost center • One debiting a cost center • Operation is balanced, no wealth created, but accountability for costs is modified for financial reporting
• You manage your IT as a real P&L
Chargeback engine allows to reallocate costs
Examples of expense lines
• Each time a server is moved, its cost center is charged with $400
• A new development software license received is charged to IT for 20% of its purchase value and 80% to Development
• An access to the SAP business service will be charged back to the business unit of the user for 200$ / year
Examples of chargeback rules
• Example of Software Compliance
Asset Manager can also simulate costs
• AQL engine allows advanced calculation for TCO • Retrieve all expenses on an Asset
– Acquisition cost – Maintenance cost – Operational costs (work orders, logistics costs)
• An economic depreciation of costs is applied
– For instance • Purchase price on 4 years for IT assets • Yearly maintenance on one year
• A yearly TCO is calculated for the asset • This asset yearly TCO is aggregated at asset class level
• TCO optimizes your IT financial Management • Vendor selection • Cost forecasting • Basis for charge back rules…
TCO calculation
• Service Management (change costs), out of the box integration
• ERP (purchase cost)
• Suppliers catalogues imports
• UCMDB (get definitions of the business services)
• Cloud Service Providers - Integrates seamlessly with HP Cloud Service Automation (CSA), HP CloudSystem Matrix and Amazon EC2 for billing activities
OOB integrations with other tools of the IT ecosystem brings value to cost tracking
HP Asset Management Chargeback Use Case Charging Human Resources system access to end users
SAP clients
(Client)
Application Server
(Resource / client): 100%
Web Server
(Client): 23%
Oracle Db server
1 (resource): 60%
Oracle Db server 2
(resource): 30%
SAP Web clients
(Client)
Human Resources
AM provides TCO of the HR service (includ. HW, licenses, contracts and operational costs)
This information is available in the Business Services screen
And Yearly TCO is available on the ROI tab of the business service tab
Yearly TCO of the business service uses each Yearly TCO of the resources including all costs
• Fixed price
– (Yearly TCO + Margin)/nr of uses = Use Price
• A pricing based on Usage is possible but needs appropriate reporting on usage
HR Service Manager can build his price
• Managed through requests (possibly out of Asset Manager, can be in SM too)
• Approval workflow in AM
• Users are associated to the service and tracked
User can request access to the HR Service
• Charge each user’s cost center of the HR Service
• Monthly
• For a fixed Cost (amount can be calculated too)
A charge Back Rule is set
Detail of the charge back rule
A charge back rule can also be set for non respect of SLAs in AM
• AM is much more than a repository that gets costs from other sources, it
• Captures costs in a highly automated way
• Reallocates when need the costs automatically way (charge back)
• Aggregates costs into TCO, and even business services TCOs
• Captures links to users, locations, cost center, budgets and categories…
• Keeps the links updated along the whole asset life cycle.
• AM prepares and automates all the financial analysis angles that FPA will propose!
The Value of AM
• Assets (Individual tracking on barcode, precise categorization)
• Purchase costs (and vendors)
– Initial purchase cost
–Leasing rents
• Maintenance costs
–Yearly rents
• Operational costs (from Change Management tool: OOB integration with SM to capture change time and apply technician hourly cost)
• Internal charges cost for Service
• Penalties
• All sums that are charged back to end users by the business services
Costs coming from AM
Conclusion & resources
49
Date Platform Partner Topic Presenter
Tuesday, October
6, 2015
12pm PT / 1pm ET
/ 8pm GMT
HP Software
IT Experts
Community
Leverage
Discovery Showcasing the flexibility of the HP CMS developers framework
Rarely does a shrink-wrapped product have everything a customer needs. So the question becomes,
how flexible and extensible is the product? An extensible product allows you the ability to add what isn’t
available out-of-the-box. And you can do so with internal FTEs, HP professional services, HP partners,
and freelance consultants. By extending the ability to create missing parts, it puts the control back in the
customer’s hands.
This presentation will showcase the power and flexibility of HP’s UCMDB and UD developers framework,
through screen shots and brief explanations of solutions developed:
Dynamic discovery and mapping of software components without knowing anything to start (use cases
include: app-dev inclusion in ITSM disciplines, datacenter migrations, security vulnerability)
Reporting perspectives specific to data set (use cases: include disaster recovery, datacenter migrations,
data comparisons with CMS product upgrades)
Dynamic calculations for Total Cost of Ownership with applications (use cases include: charge-back,
asset management)
Chris
Satterthwaite
(Leveraged
Discovery)
October 7th
Wednesday, 8:00 -
9:00 AM PDT (Los
Angeles), 11:00 AM
-12:00 PM EDT
(New York) 17:00 -
18:00 CEST
(Frankfurt)
HP Software
IT Experts
Community
RevealIT
Solutions Software Asset Management with HP Asset Manager and HP Universal Discovery: A Primer Description:Join RevealIT Solutions as they share their deep expertise with Software Asset
Management, HP Asset Manager and HP Universal Discovery to help you get additional value out of your
HP software investment. We'll review a number of use stories around software asset management and
how the HP solution can help you know more about your software positions and make the business
decisions to get the most out of your software investment while meeting your contractual obligations with
your vendors.
Wally Waltner
(RevealIT
Solutions)
October 8th
Thursday, 8:00 -
9:00 AM PDT (Los
Angeles), 11:00 AM
-12:00 PM EDT
(New York) 17:00 -
18:00 CEST
(Frankfurt)
HP Software
IT Experts
Community
HPE Security Compliance & Automated Remediation Description: In most cases, IT security runs its own scans and maintains its own repository of assets
and their configuration status and report upon it. By leveraging technologies like uCMDB, AM, SA, NA
and OO we can provide IT security up to date and continuous visibility into IT assets and enable them to
patch and automate remediation at scale. Technologies as SA and NA report upon CVE’s and can take
automatic action. As the majority of security exploit still happen by poor patch and configuration
management we need to help to establish patch management processes and automate deployments to
minimize risk.
Boris
Schneider
(HP)
Gerben
Verstraete
(HP)
Resources
Plus – brochures, whitepapers, demo videos, case studies
• www.hp.com/go/Software
• www.hp.com/go/itsmblog
• www.twitter.comn/hpitsm
• http://discover.hp.com/Discover
HP Discover 2015 London
• December 1-3, 2015 - London
• Register Now via the unique Vivit link: http://hpsw.co/y9T3Bzj
• Check out Vivit Breakout Session!
Details to come.
Materials you can use:
Resources
• Transformation Area promotional videos are on hp.com/discover
• Internal discussion from leaders is here: http://hpnn.hp.com/Articles/2015/July/AEM/Hewlett-Packard-Enterprise-AEM-video-1-%281%29.aspx?pk_campaign=Email&pk_kwd=Newsflash
• Top 10 reasons to attend Discover:
• https://irock.jiveon.com/docs/DOC-125263?et=watches.email.document
• Article/email template to drive attendance:
• https://irock.jiveon.com/docs/DOC-125264?et=watches.email.document
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