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Software to Manage Costs and Performance

CostPerform TBM Cost model

Today, CIO's face increased pressure to improve quality, security and availability of IT products where they also have to manage IT costs. With our TBM Based Cost Transparency Model CostPerform provides an analytical tool to support CIO’s in their Cost-performance decisions.

Why TBM?

In a situation where the role of IT becomes more important where at the same time CIO's have to manage their costs, the need for a precise blueprint of current "costs to serve" relationships is evident. Before making decisions, managers need to know the impact of any decision on the required target situation. Technology Business Management (TBM) provides a framework for that. Because of CostPerform's flexible architecture, the TBM framework can be easily applied and incorporated and has been proven in both the Public and Private Sector. CostPerform is an analytical tool that helps to analyze effects of planned changes before happen. By having CostPerform's TBM model managers can make better –fact based- decisions on how to increase performance of their IT function.

What input is needed?

The TBM framework is templated in CostPerform and is a rich and detailed blueprint of all relevant cost-components in the IT function. The model needs input from:

  • Cost Pools (General ledger/ FFMS, costs per objects class, type and fund)
  • Internal and external labor (HR, e.g. FTE per type)
  • Hard- and software (Inventory system)
  • Contract system (e.g. software, #users per etc.)
  • Towers and Sub-Towers
  • Applications and services (e.g. service catalog items, services etc)
  • Business Units (Invoice system/ internal charging , e.g. turnover, sold volume)
  • Cause and effect relations between all "nodes" in the blueprint. This input reflects the "calculation logic" that needs to be followed. The TBM model provides suggestions for this logic based on a broad experience in this field.
Figure 1: Graphical Representation of Cost Flows
Figure 1: Graphical Representation of Cost Flows
Figure 2: TBM Framework in CostPerform Hierarchy
Figure 2: TBM Framework in CostPerform Hierarchy

How the model works

Once the input is imported into CostPerform, it into its database and calculates both capacity and costs that flow from node to node (e.g. from Cost Pool to IT Tower or Sub Tower, from IT Sub Tower to Application or Service etc) based on either the built-in templated allocations or the user defined allocation logic.

The calculation engine starts to calculate volumes first (how many products need to be provided, how many FTE do I need, how many server capacity is required etc.)

After the volume of each node is known, the engine calculated costs for each node in the blueprint. As a result, for each node costs, volume and unit costs are calculated and ready to be analyzed.

Figure 3: TBM Framework Model Overview
Figure 3: TBM Framework Model Overview

How it supports your cost-performance decisions?

The CostPerform software offers a wide range of analytical functions to explore the calculation results. The functions allow you to focus on top 80 percent costly applications, hardware, activities, services and clients and help you to find over- or under utilized capacity of servers, licenses, FTE etc. With this (focused) knowledge, improvement decisions can be made and the required effects of those decisions can be calculated upfront by CostPerform's dashboard functionality.

Figure 4: TBM Framework Dashboard
Figure 4: TBM Framework Dashboard

Link with Mission

The CIO organization provides outputs for internal (and external) customers. These customers drive the usage and consumption of applications and services, and therefore the usage of IT Towers and Cost Pools. Therefore the TBM model shouldn't exist in isolation, but be linked with the mission side of the organization. Since CostPerform is generic and widely used within both CIO organizations and mission agencies, these models can be automatically linked and output of the TBM model is Input for the mission model. Changes on the mission side will thereby (directly) drive changes in the TBM model, showing results in cost of applications, towers and cost pools as well as the impact on capacity.

How to implement?

The CostPerform TBM Model is a predefined template with the structure imbedded in the tool. The time to implement is only defined by the availability of input data.

On request, CostPerform can suggest consulting partners to manage a TBM implementation project.

CostPerform runs standalone, client-server or in the cloud.

Links

TBM Council (https://www.tbmcouncil.org)