1. Case Study:
NAVISTAR
APPTIO | 1
Customer Profile:
Navistar International Corp. knows how to make trucks—
and it wants to know just as much about the IT costs
that go into producing, selling and servicing each one. To
help do so, the company adopted activity-based service
costing and other technology business management
solutions from Apptio. It’s since reduced its server
population, shifted cost accounting from annual to
monthly frequency, and used Apptio data to help make
better business decisions.
Business Needs:
No one expects that managing the $175 million-a-year IT
spend for a $14 billion-a-year company is going to be
easy—but Jeff Medek didn’t like seeing it get tougher, either.
The company is Navistar International Corp., the global force
behind International Brand trucks and more. Medek, a
34-year veteran with the company, is completing a nine-year
stretch as Director of IT Finance and Corporate Business
Partner.
Throughout the past decade, Navistar generated a modest
level of service costing information. It helped to justify IT
chargebacks with business unit leaders. It helped to
understand and make decisions about IT investments.
Traditionally, information on asset use and cost, as well as
the reporting system used for chargebacks, resided in the
company’s 25-year-old mainframes. Cost information was
gathered annually, aggregated manually, divided by 12 and
charged back monthly, and maintained in spreadsheets. The
system was simple but sufficient.
But things didn’t remain simple. Navistar, like most other
businesses, moved off the mainframe—in Navistar’s case, to
more than 1,100 servers. That added layers of technology
that obscured information on asset use and cost. Navistar
also outsourced about 35 percent of its IT infrastructure. It
received some cost breakdown information every month in
the outsourcer’s invoice. But even with that, Navistar lacked
sufficient insight into its use of IT assets and the costs
associated with that use.
“We have to provide transparency to our internal customers,
so that they understand the costs we charge back to them,”
says Medek. “We couldn’t do that.”
SOLUTION:
Navistar wanted robust activity-based costing, for precise
assignment of IT costs to internal customers based on their
actual use of services and underlying resources. It wanted a
“bill of IT” to deliver that information clearly and directly to
those customers in a language and context they understood
and considered fair.
Medek and his colleagues conducted due diligence on half a
dozen providers of financial transparency systems,
conducted a proof of value for two of them, and made their
selection: Apptio on-demand Technology Business
Management solutions. Apptio is designed to help IT
executives run IT more like a business—exactly what
Navistar wanted. “We chose Apptio because it was more
intuitive, and because Apptio had a greater vision about
technology business management,” says Medek.
Navistar adopted Apptio’s bill of IT and service-costing
applications. The Apptio solution is provided on a software-
as-a-service basis, decreasing time to value and eliminating
traditional capex costs.
The solution’s activity-based models are fed by Navistar’s
“We have to provide transparency to our internal customers, so that they
understand the costs we charge back to them.” -Jeff Medek

2. APPTIO | 2
Case Study:
NAVISTAR
disparate systems, as well as the outsourcer’s bills, then the
Apptio engine crunches the data and puts it into a format
that’s useful to the customer. The customer receives reports
with levels of granularity never before possible at Navistar.
For example, the 60 cost-center owners can see all of the
PCs for which they’re responsible, who uses them, and the
costs to maintain, provide security for, and run Internet
access for each.
BENEFIT:
Now that Navistar has implemented an Apptio TBM solution,
the company can spend less time gathering data and more
time analyzing strategic decisions across their 60 cost
centers.
Navistar can:
• Deliver a fair and accurate Bill of IT to business partners
based on true consumption
• Maintain a single source of truth for ITconsumption and
costs
• Closer align with the business to make better decisions
based on real IT usage data
• Move from a yearly to a monthly reporting and planning
process
• Better manage third party billing statements and
negotiate vendor contracts
Navistar now has a single source of truth for IT consumption
and costs, leading to greater transparency into IT costs,
better management, fuller chargebacks, more accurate
monthly reporting, and better cost controls. Navistar IT now
partners more closely with business units, helping them to
make better, data- driven decisions about IT use.