Why Technology Business Management and Technology Expense Management Are Misaligned
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This webinar explains how CIO's can gain greater visibility over their operational expenses, key challenges in gaining that visibility, and four key recommendations to gain control across network, enterprise mobility, software, cloud, security, and consulting.
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Why Technology Business Management and Technology Expense Management Are Misaligned
- 1. AMALGAM INSIGHTS AMALGAM INSIGHTS Why Technology Business Management and Technology Expense Management Are Misaligned Hyoun Park Dec. 2, 2019 1 …and FinOps is a Misnomer
- 2. AMALGAM INSIGHTS AMALGAM INSIGHTS Why FinOps is a misnomer Aligning TBM to Technology Expense Management Why TBM Users Are Reinventing the Wheel Where Technology Expense and FinOps Must Evolve 2 From TBM To Tech FinOps
- 3. AMALGAM INSIGHTS AMALGAM INSIGHTS 3 Why FinOps is a Misnomer
- 4. AMALGAM INSIGHTS AMALGAM INSIGHTS FinOps is an abbreviation for “Financial Operations” and is derived from the abbreviation “DevOps” for Developer Operations. Over the course of 2019, a group of IT professionals have started to use the FinOps term to describe their work. 4
- 5. AMALGAM INSIGHTS AMALGAM INSIGHTS DevOps is based on the operations associated with Software Development and Deployment. So, FinOps is around the operations of Finance, right? 5
- 6. AMALGAM INSIGHTS AMALGAM INSIGHTS Contrary to belief, “FinOps” professionals do not focus on Finance Accounting Monthly close Expense management Accounts payable Accounts receivable And other financial operations.
- 7. AMALGAM INSIGHTS AMALGAM INSIGHTS Instead, “FinOps” focuses specifically on the expense management of public cloud Infrastructure as a Service costs. Seems odd, right?
- 8. AMALGAM INSIGHTS AMALGAM INSIGHTS Amalgam Insights believes there is room for compromise where the term “FinOps” regains its common-sense meeting while allowing IT to continue using the term.
- 9. AMALGAM INSIGHTS AMALGAM INSIGHTS A Modest Proposal: FinOps should refer to Financial Management and the cross-departmental tasks associated with the CFO office. IT-specific financial management should refer to the specific IT activities being managed.
- 10. AMALGAM INSIGHTS AMALGAM INSIGHTS FinOps • CFO Office • Finance and Accounting Coordination Tech FinOps • CIO Office • IT Expense Management Cloud FinOps • Cloud Architect • IaaS Expense Management Telco FinOps • Telco or Network Director • Landline Expense Management Mobility FinOps • Enterprise Mobility Manager • Wireless and IoT Expenses Software FinOps • Software Manager • Software Licenses and SaaS Expenses Proposed FinOps Examples
- 11. AMALGAM INSIGHTS AMALGAM INSIGHTS Why Define FinOps This Way? 1) It makes more sense. Finance is already a tech-enabled and cross-departmental challenge with its own ERP and business planning systems 2) This will help a wide variety of siloed IT workers in niche expense positions to realize that they are not starting from scratch in supporting IT expenses. 11
- 12. AMALGAM INSIGHTS AMALGAM INSIGHTS 12 Aligning Technology Business Management to Technlogy Expense Management
- 13. AMALGAM INSIGHTS AMALGAM INSIGHTS What is Technology Business Management? First proposed by the technology vendor Apptio, Technology Business Management provides a framework for holistic IT budgeting and planning. 13
- 14. AMALGAM INSIGHTS AMALGAM INSIGHTS TBM Taxonomy The TBM Taxonomy provides a standard for categorizing IT costs. Amalgam Insights considers a framework like this to be necessary, but not sufficient to manage costs. 14
- 15. AMALGAM INSIGHTS AMALGAM INSIGHTS Why TBM Users Are Reinventing the Wheel 15
- 16. AMALGAM INSIGHTS AMALGAM INSIGHTS Technology Business Management does a good job of structuring IT for planning and budgeting. However, Technology Expense Management focuses on day-to-day invoices, payments, contracts, SLA management, and vendor disputes and this is a mature market.
- 17. AMALGAM INSIGHTS AMALGAM INSIGHTS In theory, TBM and TEM should work hand- in-hand to manage costs, as TBM provides planning and business alignment while TEM handles daily operational concerns and corrections.
- 18. AMALGAM INSIGHTS AMALGAM INSIGHTS In reality, TBM and TEM are like ships passing in the night: two parallel processes that barely acknowledge each others’ existence.
- 19. AMALGAM INSIGHTS AMALGAM INSIGHTS Telecom Expense • Tangoe • MDSL • Cass • Sakon • Upland • vCom • Asignet • Dimension Data • AMI Strategies Wireless Expense • Tangoe • MDSL • Cass • Sakon • Upland • vMOX • Globys • mindWireless • MobilSense • Widepoint SaaS Management • Zylo • Cleanshelf • G2 Stack • Coreview • Intello • Torii • Blissfully • ServiceNow • Flexera Software Asset Management • Flexera • Snow Software • Aspera • iQuate • Eracent • License Dashboard • Ivanti • ServiceNow • AWS License Manager Cloud Service Management • CloudHealth by VMware • CloudCheckr • Apptio Cloudability • Flexera RightScale • Azure Cost Management • AWS Cost Management A Small Sample of Companies in Technology Expense Management Amalgam Insights covers over 100 companies in the TEM market managing over $200 billion in IT spend.
- 20. AMALGAM INSIGHTS AMALGAM INSIGHTS Where Technology Expense and FinOps Must Evolve 20
- 21. AMALGAM INSIGHTS AMALGAM INSIGHTS As previously seen, Technology Expense Management or IT FinOps is still a very fragmented market. Network, enterprise mobility, traditional software, SaaS, IaaS, and traditional IT assets all have their own Best-in-Breed solutions.
- 22. AMALGAM INSIGHTS AMALGAM INSIGHTS What needs to happen? Market leaders across each of these separate areas need to start coming together because no CIO really wants to go across six different systems just to track expenses on a regular basis.
- 23. AMALGAM INSIGHTS AMALGAM INSIGHTS How likely is this? There have been a few promising acquisitions, such as Flexera’s purchase of Rightscale Motus’ acquisition of Wireless Analytics Tangoe’s purchase of MOBI
- 24. AMALGAM INSIGHTS AMALGAM INSIGHTS But the challenge is that there is still massive greenfield opportunity across all of these areas. Most of these vendors are more interested in perfecting their current offerings than in providing a single solution for IT.
- 25. AMALGAM INSIGHTS AMALGAM INSIGHTS So, in reality, enterprise IT departments seeking to optimize cost, rationalize portfolios, and increase efficiency and governance need a variety of Best-in- Breed solutions to cover all the boxes in that TBM or ITIL or other IT taxonomy of the CIO’s choice.
- 26. AMALGAM INSIGHTS AMALGAM INSIGHTS Also, there’s additional opportunity for IT expense and inventory management. An obvious gap: Security. Nobody has a great solution for tracking and managing their security portfolio.
- 27. AMALGAM INSIGHTS AMALGAM INSIGHTS An interesting wildcard: the majority of market leaders across the IT FinOps world are currently either venture capital-backed or private equity owned, which will lead to a continued and rapid pace of mergers and acquisitions.
- 28. AMALGAM INSIGHTS AMALGAM INSIGHTS Big Takeaways 28
- 29. AMALGAM INSIGHTS AMALGAM INSIGHTS 1: Although the term “FinOps” is currently misused, the idea of “IT FinOps” has a lot of potential. By sharing best practices across IT spend categories, organizations can avoid a lot of repetition in creating mature spend management environments.
- 30. AMALGAM INSIGHTS AMALGAM INSIGHTS 2. Currently, getting Best-in-Breed Results in Technology Expense Management or IT FinOps requires a portfolio of solutions due to a fragmented environment that is ready for consolidation.
- 31. AMALGAM INSIGHTS AMALGAM INSIGHTS 3. Realize that some areas such as security and IT consulting lack strong expense management solutions and still require custom approaches… at least for now.
- 32. AMALGAM INSIGHTS AMALGAM INSIGHTS 4. Expect limited consolidation from vendors as private investors seek to get efficiencies of scale and plug specific gaps. But don’t expect any single vendor to effectively manage costs across the enterprise IT environment and solve the CIO’s expense visibility issues in the way that TBM has done for planning budgeting.
- 33. AMALGAM INSIGHTS AMALGAM INSIGHTS For more information on • building technology business cases, • evaluating technology strategy, or • working with Amalgam Insights on technology consumption management, DevOps, Data Science, and Augmented Analytics initiatives please contact Amalgam Insights at: Info@amalgaminsights.com Phone: +1 (415) 754 9686 @AmalgamInsights