How one organization took care of its IT financial management mess?

One of the things that I like to do in the marketing classes I teach is to share from Geoffrey Moore’s book, “Crossing the Chasm.” In the book, Geoffrey discusses how building a business is like bowling. You have to start with the market segment that has the highest value proposition and is feeling the strongest pain point. For PCs, that market segment was financial managers and the product was Visicalc (an early predecessor of Microsoft Excel, for those of you who are too young to remember). At the time, accounting was done on the mainframe, but most financial management analysis—and sometimes even budgeting—was initially done on paper. It is amazing to imagine, but this author’s first internship involved using paper and a calculator.

 

There is no question that electronic spreadsheets revolutionized the world of financial analysis. And although more interesting options have emerged from time to time, Excel has become the go-to financial tool for nearly everyone. However, Excel has always had difficulties performing complex financial modeling. My firsthand experience shows that financial macros break, and auditing a bunch of (a1-b2)/(c4*c5) can make anyone go blind. And how do you easily create more than one version of a plan? Let’s face it, options are the life’s blood of most IT managers and IT financial leaders. One partner I know of calls IT financial modeling “the mother of all spreadsheets.”

 

A major IT organization in a Canadian government agency decided to end its pain of using spreadsheets for more than what they are good for—data entry. Their pain was the time it took to construct IT budgets and create charge backs for the agencies they support. They needed to streamline their IT budget and actuals reconciliation—another difficult thing to do in Excel. They wanted to automate the creation of cost allocations. This way they could create a consistent charge-back invoicing approach. It turns out that their business customers wanted standardization across all the agencies supported by IT, in addition to transparent allocation and billing processes. It amazes most customers that simply making sense out of the numbers serves as the starting point for business transparency. Even COBIT 5 supports this notion as part of its transparency process.

 

According to Jon W. Furner, president of IT software consultancy Results Positive: “The client’s shared services organization was looking for a way to reduce the time and effort involved in allocating costs and billing them back to their government agency customers. With Executive Scorecard Financial Management Module, they were able to utilize their existing Excel-based data sources while simplifying the whole process.” This leaves the data aggregation and presentation layer to the application instead of the Excel spreadsheet. It means IT and the business have their eyes wide open to the drivers of costs and business issues with IT expenditure.

 

Related links:

Solution page: HP Executive Scorecard

Twitter: @MylesSuer

Leave a Comment

We encourage you to share your comments on this post. Comments are moderated and will be reviewed
and posted as promptly as possible during regular business hours

To ensure your comment is published, be sure to follow the Community Guidelines.

Be sure to enter a unique name. You can't reuse a name that's already in use.
Be sure to enter a unique email address. You can't reuse an email address that's already in use.
Type the characters you see in the picture above.Type the words you hear.
Search
Showing results for 
Search instead for 
Do you mean 
About the Author
Mr. Suer is a senior manager for IT Performance Management. Prior to this role, Mr. Suer headed IT Performance Management Analytics Product ...
Featured


Follow Us
The opinions expressed above are the personal opinions of the authors, not of HP. By using this site, you accept the Terms of Use and Rules of Participation.