How ClearCost Compares to Enterprise Financial Systems

ClearCost-vs-Enterprise-Systems-Solution-Brief
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ClearCost has helped University Services build an activity-based cost model for the whole of our organisation. This cost model is now used to calculate service costs and allocate usage-based charges of $430M for all our customers.

— Strategy & Planning Manager
A Leading Australian University

Are you under pressure to reduce IT costs?

In today’s turbulent financial climate, CIOs are under enormous pressure to reduce costs, increase efficiency and demonstrate the value of their IT investments back to the business and shareholders. Part of this problem is linked to the fact that most enterprises don’t have a system or reporting mechanism in place to track overall IT spend against deliverables and determine the ROI on each individual investment.

Traditional financial management tools are limited in their ability to show actual spend for each service and IT Infrastructure resource that organisations consume. Until recently organisations have been limited to charging back departments based on the number of employees or computers, an overly simplistic method which limits the defensibility and rationale behind financial planning decisions.

Benefits of an ITFM solution
according to Gartner¹

  • Improved resource utilisation
  • Better spend management
  • Lower per-unit costs
  • Improved IT operations efficiencies
  • Ability to define and defend IT budgets
  • More accurate budgeting and forecasting
  • Product mix optimisation
  • Fact-based funding decisions
  • Increased business relevance

¹ Gartner: ‘Start Here: Know “Why” Before You Buy an ITFM Tool’, by Robert Naegle, Jim McGittigan, 2014.

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ClearCost is our source
of truth for all costing/
pricing information.
.

MKSLOGO

Merging of IT finance,
via ClearCost, enabled
unified decision-making.
.

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Realised ROI within first
6 months as complicated
annual regulatory reporting
became a trivial matter.

Enterprise Financial Systems and BI tools address different needs

Enterprise accounting and Financial Planning & Analysis systems are corporate financial tools that limit financial transparency to the G/L and departmental layers of the business. These traditional systems fail to provide the level of insight needed to identify cost savings, measure the ROI of IT initiatives, and pinpoint the factors driving the consumption and increasing demand for IT resources. The impacted areas include labour, hardware, software, data centre facilities and vendor spend. ERP-systems also fail to display a TCO of service or demand for service.

ERP-systems are not properly aligned with IT infrastructure components that drive technology spend at the project, application and business services level. They also do not provide enough granularity to develop actionable insights needed to optimise spend and create financial transparency. Any efforts to repurpose these tools for IT financial planning will most likely be costly, time-consuming and resource-intensive.

ERP-systems are designed for transactional reporting at the Cost Centre level and are not correlated to IT operational data from ITSM tools, Application Portfolio Management systems or Public Cloud Invoices. This limitation makes it impossible to create the view of IT spend that the business needs to align strategic initiatives with technology resources.²

BI Tools are not configured for IT Financial reporting and analytics. In many cases, BI tools still rely on spreadsheets for data inputs which limit the ability to automate.

‘I simply cannot do my job without ClearCost. I’ve got our budgeting & forecasting down so well I can tell the business the cost of opening a new centre ahead of time.’

IT Operations Manager
A rapidly expanding group of
Early Learning Centres

‘ClearCost has helped University Services build an activity-based cost model for the whole of our organisation. This cost model is now used to calculate service costs and allocate usage-based charges of $430M for all our customers.’

Strategy & Planning Manager
A Leading Australian University

2 ‘Where is the value? IT finance leaders need ways to communicate IT spending’, Peter Grydgaard and Jesper Hansen. Deloitte.

ClearCost Transforms Your Existing ERP Data

ClearCost integrates data from your current corporate financial systems such as Oracle, SAP, Technology One and NetSuite, for that essential ‘source of truth’ to financial data for extension into the world of Service Financials. ClearCost’s robust IT cost modeling architecture categorises disparate data and aligns it to the applications and services consumed by the business.

This transformation creates a single source of truth that enables IT leadership to optimise costs, improve financial agility, drive innovation and confidently ensure that IT spend is aligned with the strategic initiatives. Without this, the lack of visibility will most likely result in missed cost savings opportunities which can impact your business tremendously.

Many of the solutions offered through traditional ERP system providers use simplistic cost models that limit the level of granularity and potential insights. In contrast, the unique nature of IT service cost modelling ties together capacity, demand, and resourcing to the core Enterprise systems, providing the only truly integrated approach to support IT financial analysis.

ClearCost is such a system, providing proprietary benefits which include a customised, client-focused industry-based taxonomy used to categorise IT costs from different source systems, an integrated application suite tailored to IT-specific metrics & financial reporting, advanced analytics, and a data-driven allocation model demonstrating the linkage between business demand and IT.

Lack of transparency is limiting your potential

Relying on a single financial view of IT hinders your ability to optimise IT spend. ClearCost’s five dimensional perspective of technology spend provides a crystal clear view of how IT resources are being consumed.

Asset
/GL

  • People
  • Services
  • Hardware
  • Software
  • Facilities

IT Towers &
Platforms

  • Improved resource utilisation
  • Operations & Infrastructure
  • End user computing
  • IT Governance & Security
  • Ability to define and defend IT budgets

Technical
Services

  • Application Support & Development
  • Storage
  • Lower per-unit costs
  • Compute Capacity
  • Network Services
  • Telco & mobile
  • Cloud & data

Business
Services

  • Design Application
  • Back office application
  • End-user services
  • Collaboration services
  • Project services

Investment

  • Improved resource utilisation
  • Opex vs Capex OR
  • Run The Business (RTB) vs Change The Business (CTB)

CIOs must have clear visibility into at least five views of IT3

3 ClearCost has adapted Five Views of IT from ‘CIO’s Must Master Four Views of Spend to Manage IT Finances’, Jim McGittigan, Robert Naegle. Published by Gartner, 23 April 2019.

ClearCost enables IT Leaders to manage infrastructure costs using Five Views tailored to your Technology Organisation.

Modern enterprise-wide financial systems limit your ability to effectively manage spend by forcing your IT organisation to rely on cost centre focused reporting to make complex and impactful decisions that affect profitability, operational performance and innovation. By leveraging the transparency created by ClearCost’s 5 Views of IT Finance you can pin-point which levers to pull in order to effectively optimise your IT expenditures and align technology resources with the business outcomes prioritised within your organisation. With ClearCost you will be able to easily identify the IT resource components driving the cost of internal IT services, business services, applications, and projects while using those insights to confidently plan for ongoing operations and strategic initiatives. Our solution is tailored to meet the specific needs of each individual enterprise and enables you to benchmark against industry peers.

Put a hard-stop on technology overspend

Each moment that passes represents missed opportunity and increased exposure.

Automate your IT FP&A process and spend more time focusing on optimising operations and creating value by eliminating manual spreadsheets and lengthy budgeting cycles. Leverage the power and confidence of having one true source for IT financial data, reporting and analytics.

Accelerate business performance by demonstrating fiscal responsibility through proactively shifting spend from run to change and/or transform. Track all cost drivers and performance metrics within IT, calculate a total cost for IT service, and reduce costs through deeper analysis of cost drivers.

Optimise your total IT spend by defending capital and operational expenditures by business unit,demand drivers and business applications. Gain a comprehensive catalogue of IT services, infrastructure and licenses segmented by capacity, demand and activity units.

Eliminate uncertainty by having a clear understanding of how resource consumption impacts the P&L. Shape demand for IT services by developing cost models for defensible showback, chargeback or Bill of IT. Reduce overspend and wasted capital by promoting financial accountability within your organisation.

Promote business innovation through scenario modelling and cost benchmarking your capacity technology along ‘utility’ computing lines for streamlined pricing, capacity allocation, lifecycle management and forecasting support.

Solution Brief

How ClearCost
Compares to Enterprise
Financial Systems

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