Delivering Financial Transparency From The Ground Up


When it comes to determining true costs and accurate consumer usage for the new IT-as-a-Service model, there’s a lot more behind your business unit invoice than you think.

At EMC a team of business analysts has spent months conducting rigorous reviews of EMC’s IT data and then mapping and costing out every aspect of each ITaaS offering to make sure the new, financially transparent model is accurate.

As EMC IT makes the transition from working with a lump sum budget to charging back or showing back costs to individual business units for the IT services they consume each month, users can be confident that their usage is being carefully tracked and priced. After reviewing and remediating data gaps, we estimate that we are currently at 92 percent accuracy and climbing.

Getting to that level of quality data shouldn’t be underestimated, nor should the importance of such an achievement to the ITaaS transition. After all, each time a business unit consumes a service via ITaaS, IT needs to make sure the amount it is charged for that service reflects all of the costs to provide that service, from the more obvious infrastructure on which it runs to the labor supporting and other non-direct cost such as data center overhead.

Cost transparency doesn’t just require financial data, though that is what most people think about when they hear the term. It also depends on information about hosting, applications, infrastructure, licensing and maintenance, and other things that let us associate costs to services.

Fortunately, EMC IT had already been tracking much of that information in its configuration management data base or CMDB, which it created in 2008 to better manage and support the IT service management processes such as change, configuration, incident, problem, etc. The CMDB is a federated collection of previously siloed infrastructure and system information from across different IT groups that serves as an inventory of all the things we manage in IT. We added the CMDB data to our other sources of financial data to build the cost transparency data set.

Several months ago, a Cost Transparency Team first began manually comparing CMDB and financial data between the various systems to make sure any gaps in costs were taken care of. This painstaking data remediation approach was costing IT thousands of dollars over a given work period. Eventually, we were able to automate much of the data quality process to help us compare data and do remediation of cost discrepancies much more quickly. It now costs us a few hundred dollars over the same period of time to accomplish the previously manual work.

To make sure our cost data continues to be true, we have created an eight-member Data Quality Council that acts as quality stewards to the data. The Council will stay in effect beyond the ITaaS project completion. What’s more, the Office of the CIO is also tracking IT data quality on a quarterly basis using a metric that measures over 200,000 data points weekly.

A key objective of all this attention to data quality is to give businesses the confidence they need in IT to believe that IT has the required information to support its service costing process.

If users do have any questions about what they are being charged, we are able to check on their concerns and show how the data supports those costs and, if needed, fix the data almost instantly. We don’t allow it to go into a black hole. We are going to be transparent to develop customer trust.

Outside vendors have motivation to make sure their costs are accurately reflected in the prices they charge customers because they need to make sure they make a profit while providing value. We are motivated by the fact that we’re in the game to win business and gain value for the company. We want to make sure we spend the company’s money wisely.

So if you’re a consumer of cost transparency you should know that a lot of effort has been invested to ensure that the data used to help to produce the invoices is of high quality. We are continuously reviewing and improving our data to maintain this high quality.

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3 thoughts on “Delivering Financial Transparency From The Ground Up

  1. Hello,

    An interesting post, as always. Regarding cost transparency, I can see how dedicated hardware resources can be measured and charged (transparently) to the customer; but I am curious about how you are doing that for infrastructure that supports multi-tenancy. Given the proliferation of VMs, it should be common (or is it?) for multiple customers to be hosted on the same storage array or ESX server: how do you charge them for the individual power consumption, CPU utilization, actual storage allocated and so on? Is it possible to do this so that not only is it accurate but doing so helps both the provider and the consumer?


  2. Pingback: My IT is Ready. My People Are Not. | Technology News Hub

  3. Thanks for the comments/question. The way we handle the multi-tenancy of infrastructure is simply to \”pool\” the costs and use an allocation metric that makes sense that then applies the right porportion of that cost. As an example we may have a VM server cost pool and in that cost pool we roll in labor, depreciation, licensing, maintenance, etc that contribute to the make-up of that pool. When then would use an allocation method to spread those costs across all servers. In this case the allocation metric would be host names. So each host name would represent an all in cost for that host. Where apps consume hosts we would then allocate costs to apps by how many hosts they consume. Same can be done with Storage. Now what this doesn\’t address, and perhaps it\’s not that critical, is direct costs to a particular host. I, at the moment do not care what the power consumption is a specific set of machines. All I need to know that my total power cost is X and that I divide that X into those devices I want to capture that cost back from. Hope this helps and as always willing to talk in detail.

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