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Customer Insight: 3 Key Takeaways from GuideWell’s Path to ITFM Maturity

Nov 19, 2019 | By Wil Cleaveland

IT Cost Transparency IT Leadership

In a 1-hour “fireside chat,” GuideWell’s IT BMO, Ginger Allen, shared several valuable insights from her experience leading the organization’s journey to ITFM maturity. Nan Braun of Thavron Solutions – which served as GuideWell’s implementation partner – joined the discussion as moderator.

Ginger built GuideWell’s ITFM program from the ground up starting in 2017, after securing executive buy-in to implement the full suite of Nicus solutions (IT Planning, Cost Transparency, and Bill of IT).

Over the past two years growing the program, Ginger identified several important lessons, benefits, and tactics that organizations considering the journey should understand.

We’ve summarized the biggest takeaways from this “fireside chat” below, and you can request a full recording of the call here.

#1 – ITFM success is about much more than cost savings

Value comes in many forms, and not all of them will have an instant impact on costs. That doesn’t mean cost savings aren’t important. They are. But there are other sources of intangible value that deserve just as much attention, and they all impact the bottom line in the long run.

For example, benefits like increased operational efficiency and stronger IT-business alignment won’t necessarily translate to big short-term gains. They will, however, have considerable long-term impact on the business’s ability to innovate, stay agile in changing market conditions, and so forth – all of which ultimately translate to tangible ROI.

“We’re now able to sit down with business leaders and ask, ‘What’s the outcome you’re trying to achieve? What’s the pain you’re experiencing?’” Ginger explains. “Then we can give them options to accomplish those goals. It’s been an important cultural shift, and it’s enabling new efforts to collaboratively maximize alignment and value.”

#2 – The ability to contextualize costs is a critical skill

IT leaders must learn to frame costs using all available information. Otherwise, they’re left with no way to demonstrate efficiency and explain changes in spend. And according to Ginger, using established frameworks and methodologies is the key to contextualizing costs.

More specifically, GuideWell’s decision to leverage a standardized taxonomy for IT service costs allowed the organization to easily benchmark against a wide range of industry data sets – giving Ginger the chance to showcase above average performance, while also making the case for additional funding.

“The feedback we got from the board showed they were clearly impressed,” Ginger says. “[After the initial exercise] We found that we’re very well positioned with others in our industry, and even other industries that tend to be more mature from a digital transformation perspective.”

“I also took this as an opportunity to demonstrate where we’re spending well below industry benchmarks,” Ginger continued. “…which planted a seed to let them know we may be requesting more funds later – and that those requests are justified.”

Ginger also explains how tracking and categorizing spend using the Run/Grow/Transform framework allowed her to easily rationalize rising costs for executive leadership.

“I got a question on why headcount is consistently growing year over year,” Ginger said. “So I started looking into how things were breaking down over time, and I quickly saw the explanation. We focus heavily on internal development. And every year, we were adding multiple new capabilities, which was causing run costs – and headcount – to spike in subsequent years.”

“When you remove the costs driven by new capabilities, our run costs were actually decreasing at about 3% per annum,” Ginger explained. “But with these new capabilities coming on at such a rapid pace, that 3% improvement was turning into an 8% increase. By offering a defensible explanation in terms they could easily understand, the questioning stopped, and they just said, ‘Wow, we never looked at it that way.’”

#3 – Actionable transparency stops the budget attack/defense cycle

Without a clear understanding of what’s truly driving spend, technology leaders struggle to build trust with the business and are constantly forced into a defensive position when discussing costs – perpetuating a damaging culture where IT’s numbers are assumed to be flawed until proven otherwise.

But, as Ginger explains, the granular visibility provided by a successful ITFM program has the power to rapidly shift this dynamic.

“By bringing operational data and financial data together into a single story, everyone understands why costs are changing up or down, what the drivers are, and what actions should be taken,” Ginger says. “It started a powerful conversation, which quickly shifted me out of holding such a defensive position with the budget.”

In other words, the fundamental question changed from, “Why does this cost so much?” to, “Are these costs justified by the capabilities they support?”

Listen to Ginger’s “fireside chat” on-demand here

These are just a few of the valuable nuggets Ginger shared during the conversation. To listen to this “fireside chat” on-demand, get the recording and transcript delivered to your inbox here.

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