Oracle ITFM: A Better Language Between IT and Finance

Open World 2017
Lunch and Learn
Oracle ITFM – A Better Language
Between IT and Finance
Mike Killeen – Edgewater Ranzal
Nan Braun – Thavron Solutions
Getting to the Answers for Improved Business Performance
FocusedOraclePlatinumCloudPartner Oracle Cloud Solution Provider – EPM, BI and BD Technologies

Business Analytics Solutions Provider: EPM, BI, and BD Technologies
Program Agenda
• Introduction to Oracle ITFM
• Why is ITFM Important?
• ITFM Solution Components
• The Service Costing Project
• Q&A
2

The Dual Role of the CIO
Spend: IT to Sustain
“Run the Business”
Invest: IT as Strategic
“Grow & Transform the Business”
3

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. 4Business Analytics Solutions Provider: EPM, BI, and BD Technologies
IT
Chargebacks
& Bill of IT
Data
Management &
Automation
IT Planning
& Analysis
Transparency to IT Service Charges
Align IT Projects with Strategic Priorities
IT Spend Analysis: Run vs. Grow vs. Transform
ITFM helps IT build credibility with the Business
Align IT to Run and Grow the Business
Oracle IT Financial Management (ITFM)
4

Program Agenda
• Q&A
5

“You Should Run IT
Like a Business…”
6

Wherever they sit in the
organization, the CIO is
responsible for keeping IT
functional and cost effective.
7

The Benefits Bubble Through the Organization
Cost Transparency
R2GT
M&A
App
Rat
Cloud
WhatIf
Model
8

Who Cares?
CIO
VP Infrastructure .
VP Applications
.
IT Finance Manager
.
9

What’s the bottom line?
• For organizations who have not yet started the journey, doing so can drive
bottom line financial impact and operational improvement (~10%)
• For those who already have a base model, pushing towards maturity can
increase impact by as much as 2x
• Provides a Service Model to change the internal IT culture and discussion
as well as External (with the business)
• Value Aligned for best Bottom Line impact- allows the CIO to bring value to
the table
10

Program Agenda
• Q&A
11

IT Demand Plan
Run/Build (Project)
IT Costing &
Chargebacks
Oracle IT Financial Management (ITFM) Solution
IT Supply Plan
Labor/Equip (Resource)
Service Catalogue
(Run)
Project Portfolio
Mgmt (Build)
IT Management IT FinanceLine of Business
Management
Operational Systems
Line of Business
Chargeback Reports
IT Performance
Management Reports
Shared Master Data & Governance
General Ledger
SubLedgers
AP, FA, PR, PO
Financial Systems
Cost Centers & AccountsConsumers & Services Projects & Resources
Oracle IT Financial Management Solution Architecture
Enterprise Planning + Profitability & Cost Management Cloud
Configuration DB
(Resources)
Projects
Oracle
ERP
Oracle
Projects
Oracle
PPM
DRM or
EDMCS
EPBCS
PCMCS +
ITFM Templates
FDMEE or
Data Mgmt
FDMEE or
Data Mgmt
12

• IT Target Setting
• BAU Targets Aligned with Revenue
• Initiatives Linked to Strategic Planning
• IT Resource Planning
• Employees & Contractors
• Equipment & Software
• Integrates with HR & Fixed Assets Systems
• IT Project Financial Planning & Forecasting
• Budgeting & ROI for new Programs & Projects
• Forecasting for Indirect & Capital Projects
• Integrates with PPM solutions
• Monitoring & Analysis
• Self-Service Reports & Ad Hoc Analysis
• Provide transparency between the CIO & CFO
Spotlight on IT Planning & Forecasting
Improve Forecast Accuracy & Control
IT Target
Setting
IT Resource Plan
& Forecast
IT Project Plan &
Forecast
Monitoring &
Analysis
13

Enterprise Planning & Budgeting Cloud
The Engine Behind IT Planning & Forecasting
Planning modules with best practice content for
rapid deployment & auto-upgrade
Configuration Wizards for Functional administration
Easy-to-use Mobile, Web & Office User Interfaces WORKFORCE PROJECTSFINANCIALS CAPEX
14

Spotlight on IT Service Costing & Chargebacks
Modeling IT Like a Service Business
• Combine Data from Multiple Sources
• General Ledger/Financial Planning
• Projects Ledger/Project Planning
• Optional - Time Entry Hours By Project
• Optional - Vendor Detail from AP & GL
• Perform Cost Center Allocations
• Corporate Overhead & Services to IT
• IT Overhead Allocations
• Intra-IT Allocations/Tech Services
• Perform Project Allocations
• Investment Class (Run/Build) Split
• Project OH Burdening
• Capitalized Labor to Projects
• Combine Data from Multiple Sources
• Labor Financials from Payroll or WFP
• Asset Financials from Fixed Assets
• Operational IT Resource Tracking Data
• Service/Application Consumption Metrics
• Perform Resource Costing
• Labor Costing By Class/Skill/Person
• Asset Costing by Class/Type/Equipment
• Perform Service Costing
• Flexible phasing of costs from Cost
Center, Project or Resource
• Calculate Unit Cost Per Service
• Service Catalogue & Bill Rates
• Contribution Cost Trace
• Consumer Showbacks
• Consumer Allocations
• Cost Per Supported User
• Consumer Chargebacks
• Intra/Inter Company Charges
• Cost Recovery Variances
Model Financials & Projects Complete Costing of IT Operations IT as a Business Service Provider
15

Oracle Profitability & Cost Management Cloud
The Engine Behind IT Service Costing & Chargebacks
Published Reports &
Interactive Analytics
Model Development
Master Data & Data
Integration Management
Profitability & Cost Management
Cloud Service
(PCMCS)
Financial Reports, Smart
View, Embedded
Visualizations
Model Execution
 No Large Initial
Investment
 Accessible
 Always up to date
Allocation
Engine
Embedded
Intelligence
Mobile
Rule
Transparency
Integrations
Dashboards &
Work Areas
16

• Pre-Built Data Model
• 14 Base Dimensions
• 24 Attribute Dimensions
• Pre-Populated Content
• IT Chart of Account Definition (150+)
• Service Catalogue (50+)
• 40+ Drivers
• Pre-Built Model & Reporting Content
• 15+ Ratios/Metrics
• Time Series & Variance Calculations
• Starter Set of 40 Allocation Rules
• 15+ Smart View & Fin Reports
• 30+ Pre-Built Model Views for Analysis
• Pre-Built Interface Specifications
• 20+ Native File Formats managed by Source
• Ranzal Accelerators WIP for Data Management
Mapping & Automation
PCM IT Costing & Chargeback (ITCC) Template
Pre-Packaged Content for Profitability Cloud
17

Program Agenda
• Q&A
18

Service Costing Project
• Document your Business Cases
• Identify the Services to be modeled
• Preliminary Design
• Identify and define the data you will need
• Get extracts from the potential data sources and measure for data
maturity/fit
• Revise your design and initial socialization
• Build the model and validate
• Socialize and Operationalize
Copyright 2016 Thavron Solutions, LLC

IT Transformation: Maturity-Value Curve
IT Cost
Management
Internal
Transparency
External
Transparency
Demand
Management
Portfolio
Optimization
Value
Maturity
oImprove data quality
at the source
oLeverage assumptive
data to fill in gaps
oDetermine TCO of
technology silos
oCompare costs to
industry peers
oImprove vendor
management
oImprove data quality
and completeness
oDetermine TCO of IT
Business Capabilities
and Processes
oAnalyze utilization rates
to identify
consolidation
opportunities
oLeverage cost
benchmarks to reduce
capability costs
oBegin to balance cost
with quality
oImplement chargeback or
show-back via Bill of IT
oCommunicate cost,
quality and value trade-
offs (levers)
oWork with business
leaders to determine
most cost-effective
Business Capability and
Application Portfolio
oJustify or delay
investments based on
utilization and expected
ROI of IT services
oModel demand for
products and capabilities
based on forecast
business change or as a
reaction to changes
oIntegrate accurate IT
costing into business and
product portfolio
planning cycles
oCost-effectively source IT
(internally or externally)
based on real-time
business demand
oMeasure and optimize
investments as a
strategic partner with the
business in Run the
Business (RtB), Grow the
Business (GtB) and
Transform the Business
(TtB) initiatives
oRestructure IT Capability
portfolio to maximize
business value based on
changing business needs
Value to IT (innovation)
Business Value (growth)

Account x Entity
Account x Entity x Project
x Vendor
x Vendor
Service
Resource (Cat) x Service
Resource (Detail) x Service
Consumer
Consumer
Consumer
Consumer
Consumer
ITFM Flexible Maturity Model
Phased Implementations Maximize Time-to-Value
*Custom1 can also be included in any Financial View
*
Per PCM Point-of-View: Period, Fiscal Year, Scenario, Currency
21

PCMCS IT Costing & Chargebacks Template
Pre-built Application & Service Catalogue
25
• Services are
attached with default
drivers for allocation
rules & reporting
• Application or
Service View can be
modified to
Application By
Service utilizing
Resource Dimension

Pre-built Dimensional Model
27
• Time: MTD, QTD, YTD, ITD
• Scenario: Pre-built variance calculations
• Currency: For Local, Reporting &
Constant Currency Analysis
• System Dimensions: Enables
Transparency
• Data Source: Recon & adjustments
between GL & Project/Vendor/Resource in
Sub-Ledgers
• Account & Service: Prepopulated with
content & calculations
• Optional Dimensions: Allow for phased
delivery and flexibility to adapt

Data Source Dimension for Transparency & Adjustments
29
PCMCS
Allocations & Calculations
Fin
Plan
GL
Balances
Project
Fin
Plan
Wrkfrc
Plan
Capital
Plan
PPM Time Entry
Config
Mgmt DB
IT Stats
AP
HCM
Adj
Projects
Payroll
Fixed
Assets

Assessment Philosophy
Design First, then Assess for Capability
• Design ideal model based on
Stakeholder input
• Pros:
– Stakeholder buy in /ownership
– Ideal solution from the start
• Cons:
– Data not capable of supporting model
– Project “hangs” or collapses
Assess first, Design to Capability
• Understand current data status, design
model to capability with specific
maturity goals
• Pros:
– Design will succeed
– Rapid transparency to data
“imperfections”
• Cons:
– Resistance to evolving/maturing model

The Myth of Perfect Data
Myth:
You need perfectly clean and aligned
data to get insight to service costing
Fact:
You need data that is “clean enough”
to allow your model to function
consistently to get insight to
service costing

Creating a Data Assessment Plan
• Measuring gaps to the template- Identifying issues early,
• Coordinate with Source System owners/SMEs
• Extracts in raw format for assessment
• Careful measurement of Stability and completeness
• Calculation of maturity and readiness

Data Management Approaches for Hybrid Deployments
34
• Native Load
• Formatted Text Document
• No Load Rule Required
• Loads are initiated in PCM GUI
• Data Management (e.g. FDMEE “Light” in the Cloud)
• Provides data mapping
• Provides scheduling
• Provides Drill
• Import/Export functionality
• Hybrid
• Utilizes on premise FDMEE 11.1.2.4+ to
integrate with the cloud
• Allows integration between GL and on cloud
applications*
• Provides Drill
• Import/Export functionality
PCMCS
PCMCS
PCMCS

Typical Client Journey
Design/
Fit-Gap
Data Load &
Modeling
Initial
Reporting
Prioritize data
gaps
Data clean up
Consumable
Reports
Roadmap
Items
You are
Here

Prescriptive Starter Set of Allocation Rules
37
Finance Allocs
* Corp Ovhd Allocs
* IT Ovhd Allocs
* Intra-IT Allocs
Project Allocs
* Project OH Burdening
* SOP-98 Opex to Capex
* Run/Build Split
Resource Costing
* Vendor/Resource Costing
* Configuration Item Costing
---People
---Assets
Service Allocations
* Sevice & Application Costing
Consumer Allocations
* Service Charge to Consumer
* IT LOB Allocation to Consumer
* IT Project Allocation to Consuemr
Data Prep
* Currency Conversion
* Driver Prep
• Pre-configured rules have been
created that reference existing
meta data. Rules have been tagged
to unique Data Source dimension
members to aid in reporting.
• Rules are organized into rule sets
that may be enabled or disabled for
phased implementation work
needed
• Rules can vary by Point-of-View,
allowing for interesting price-
volume-mix and what-if analysis
capabilities
• PCM System dimensions (Rule,
Balance) track the flow of data
automatically which enables
transparency throughout the
process

15 Pre-Built Reports Enabled By Phase
38
Financial View IT Operations View Consumer View
CIO Key Metrics
Provides an overall view
of key financial and non-
financial IT Metrics for IT
Management.
Budget vs. Actuals (BvA)
for Service Owners
Plan vs. Actual Variance
Analysis of Total IT Run
Spend by IT Service
Owner
Run Spend By Service
and Org
Shows the Actual YTD
Run Spend by IT Cost
Center and Service
IT Plan Review
Provides a Comparison
of Run/Build &
Opex/Capex IT Spend
by Scenario. CPSU By Service
Shows a Plan vs Actual
vs Variance of
Annualized IT Allocated
Cost Per Supported User
by IT Service
Build Spend By Initiative
and Org
Shows the Actual YTD
Build Spend by IT
Project and Initiative.
Run vs. Build Summary
Monthly Run/Build Trend
benchmarked against
Firm Revenue. IT Intra-Tech Service
Shows the results of IT
Technical Service
Allocations.
CPSU by Consumer
Function
Shows the Annualized IT
Allocated Cost Per
Supported User By
Consumer Function
IT Build by Project
Category
Provides YoY
Comparison of Project
Spend by Build
Category. Monthly Vendor Spend
Shows the monthly trend
in spend by top vendors.
CPSU By Consumer
Geo
Shows the Annualized IT
Allocated Cost Per
Supported User By
Consumer Geography.
IT Headcount Review
Provides a comparison
of IT Headcount by
Scenario & Delivery Org.
IT Run by Resource
View
Shows the Trend in
Actual and Forecasted
total allocated cost and
CPSU by IT Resource
Category. Bill of IT
Per Consumer shows
Billed Charges and Cost
Per Service.
38

Socializing the Design and the roadmap
• Stakeholder involvement
• Review Use Case
• Review Target Design
• Share data gaps identified
• Get sign off
• Give homework if appropriate

Conceptual Project
Timeline/Services/Deliverables
41
Pre-
Week 1
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7
Post-
Week 7
Fit Gap
Design
Test: Client Lead
Working Model w/Reporting & Data Int Routines
Go-Live
Deliverables
• Communication templates and
plans for model socialization
• Report Validation
• Business Service Map vs Existing
• CMDB alignment vs Industry Stnd
ITCC Training 12 Users
Application Configuration
Presales “30 Minute” Health Check
Presales Discovery Workshop
Leading Practices
Deliverables
• High Level Maturity Gap: Data & Systems | Process & People |
Governance
• High level Capabilities and Gaps Analysis to correctly scope and
align project
• 6 month critical path high level plan
Train & Rollout 12 Users
Steps
• Instance Provisioning and Setup , 25 Users, incl Archiving and Backups
• Initialize ITFM Solution via Templates
• Configure Master Data for Entity, Custom1, Project, Service & Consumer and
related attributes from Client Provided Files
• Configure Data Load Routines with mapping to ITFM COA for Pre-Allocated
Financials for CY Actual, Budget, Forecast & PY Actuals
• Configure Data Load Rules for Entity Based, Project Based, Service Based, and
Consumer Based Driver Metrics (4 Interfaces)
• 1.5 Week Allowance for Modification of Existing Allocation Rule Sets, Reports &
Ratios/Metrics to Meet Unique Client Needs
Sustain Support
Leading Practices Workshops: Data Maturity – Readiness | Roadmap | Business Services Def | CMDB
Leading Practices – Change Management: Sponsorship / Staffing
Dev to Test Migration
Leading Practices: Model, Data & Rpt Roadmaps
Deliverables
• Environment Migration Guide
• System Administrative Guide
• Customized End User Training
Material
Workshops: Model Socialization | Use Cases Doc | Model | Reports
Deliverable: Post implementation roadmaps
Deliverables:
Staffing Plans
Sponsorship Tour Plans
Lead Lead

Run the IT Service Costing Model
Load, Calculate & Validate
43
• Post-Calculation Validation
– Data Validation
• SmartView
• Queries
• Rule Balancing Report
• Traceability Maps
• Dashboards
• Financial Reports
– System Validation
• Programme
Documentation
• Dimension Statistics
• Rule Data Validation
• Execution Statistics
• Pre-Calculation Validation
– Meta-data Validation
– Model Validation
• Rule Sets and Rules
• Model Views
• Queries
• Analytics
• Data Grants
– Data Validation
• SmartView
• Queries
• Rule Balancing Report
• Dashboards
• Financial Reports
Calculation

Publish & Analyze the IT Service Costing Model
Reporting & Analysis
44
• Provides built-in reporting and analytics
capabilities
• Are developed and maintained by end-users
• Minimizes the need for dedicated Reporting
teams. The people who use the reports can
develop them
• Provides:
• Population Performance Analysis
• Multi-dimensional P&Ls
• Cost Contribution Reporting
• Cost and Profitability Statistics
• KPI’s & Dashboarding

Program Agenda
• Q&A
45

ITFM Partnership - Uniting Expertise and Strengths
"This collaboration brings a unique intersection of technology, strategy
and implementation expertise to the ITFM space. We see a compelling
opportunity to further strengthen the bonds between the offices of the
CFO and CIO and bring a common language to the business."
- Matt Bradley, Senior Vice President, Product Development, Oracle
46

Your Resource for ITFM @Oracle OpenWorld
Have lunch with us! A Better Language Between IT & Finance (ITFM)
Wednesday, 10/4, 11:30-1:00 p.m., Thirsty Bear Brewing
Schedule a Health Check appointment.
Meetings are available Monday-Wednesday
Attend our featured conference session:
Monday, 10/2, 12:15 - 1:00 p.m., Moscone South - 160
Oracle EPM Cloud for IT Financial Management
Join us for Happy Hour!
Tuesday, 10/3, 5:30 – 7:30 p.m., Wine Down San Francisco
Engage with trusted partners to find out more about
IT Financial Management Solutions (ITFM):
Meetings Available
Monday - Wednesday
47

Give us Your $.02 and We’ll Give You $5
Do You
Know Your
PCMII?
• Take part in our study to learn how organizations navigate and manage
Profitability & Cost Management (PCM) processes.
• Show your results email for a $5 Starbuck’s gift card
• Mobile friendly: ranz.al/openworld17
48

Oracle ITFM: A Better Language Between IT and Finance

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