This webinar is the second part of the IT financial management series. In this webinar, Charlie Curcio, IT CFO shares his experience in driving financial transparency across the application portfolio.

2. Agenda
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3. Running the Business of IT
Key Challenges

4. The IT House
Demystifying IT Financial Management
Maintenance&
Break/ Fix
Development
Projects(New /
Enhancement / L&R)
Services
Efficiency&
Performance
Tuning Projects
Applications
Infrastructure
Efficiency & Availability
Optimize
Create
Capacity
Today’s Focus

5. 
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Creating a Metrics Culture

6. Application Side of the House
Average 2012 IT Spend - Cost Drivers for
Applications
35%
55%
10%
Applications
Infratsructure
IT Management
46%
54%
Gartner
IT Metrics: IT Spending and Staffing Report, 2013

7. Value Creating vs. Sustaining
Breakdown of Application Spend
46%
34%
14%
6%
Maintenance New Development Enhancements Regulatory
46% 35%

8. Value Creating / Value Sustaining Ratio
Reduce Lights-on Spend to Fund Innovation
0
20
40
60
80
100
2013 2014 2015 2016
Sustaining Creating
48% 42% 37% 32%

9. Polling Question 1
What % of your Application spend is dedicated to Value
Creating activities?
A. Less than 25%
B. Between 25% and 50%
C. Over 50%
D. We don’t currently track this

10. Value Creating / Value Sustaining Ratio
Financial Management Techniques & Considerations
Sustaining
• Application Portfolio Mgmt.
• Total Cost of Ownership
• Rationalization
• Sourcing Options
• Organization Structure
• Staffing Mix
Creating
• Portfolio Selection
• Demand Mgmt.
• Optimization & Alignment
• Measure Performance
• Track Financials
• Benefits Realization

11. Value Sustaining Techniques
Application Portfolio Management
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12. Value Sustaining Techniques
Application Portfolio Management
Maintenance
Maintenance
Maintenance
$70k
30k
$15k
$35k
$20k
$60k
$35k
$20k

13. Value Sustaining Techniques
Application Portfolio Management

14. Polling Question 2
Select the answer that best describes your organization’s
Application Portfolio Mgmt. (APM)status
A. We have implemented an APM process and
tool
B. We have started to implement an APM
process and tool
C. We intend to start implementing an APM
process and software
D. We have no plans or management
commitment at this stage

15. Value Sustaining Techniques
Staffing Strategy & Considerations
Sourcing
Strategy
Define the
Right Model
#of Vendors
&
Relationships
Pricing
Models &
SLAs

16. Value Sustaining Techniques
Sourcing Options

17. Value Sustaining Techniques
Sourcing Options

18. Polling Question 3
As a percent of total labor headcount, to what degree do
you use offshore consultants?
A. We do not use offshore consultants
B. Minimal – less than 10%
C. 10% – 25%
D. Over 25%

19. Value Creating / Value Sustaining Ratio
Financial Management Techniques & Considerations
Sustaining
• Application Portfolio Mgmt.
• Total Cost of Ownership
• Rationalization
• Sourcing Strategy
• Optimize Procurement
• Staffing Mix
Creating
• Portfolio Selection
• Demand Mgmt.
• Optimization & Alignment
• Measure Performance
• Track Financials
• Benefits Realization

20. Value Creating Techniques
Portfolio Selection
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21. Value Creating Techniques
Portfolio Selection
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22. Value Creating Techniques
Portfolio Selection
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23. Polling Question 4
Which statements best describes how you select and fund
project portfolios?
A. Projects are funded on a first come first served basis
B. Projects are prioritized and selected top down until you reach
available budget
C. Projects are prioritized based on strategic impact and
optimized against available budget on an annual basis (i.e.
Annual Planning)
D. Projects are prioritized based on strategic impact and
optimized against available budget on a quarterly basis (i.e.
Just-in-Time Planning)

24. Value Creating Techniques
Financial Transparency & Insights
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25. 
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Drive
Portfolio
Value
bottoms up
Value Creating Techniques
Financial Transparency & Insight

26. 5%
10%
17%
39%
11% 12%
7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
% Project Cost by Phase & Capitalization
Efficiency
Value Creating Techniques
Financial Transparency & Insight

27. Value Creating Techniques
Financial Transparency & Insight
Slice & Dice Financial Status Metrics
YTDActuals(May)
YTDBudget(May)
YTDVariance(May)
%Variance(May)
TotalBudget
TotalForecast
RemainingCosts
Variance(Total)
%Variance(Total)
Project 4 2,522,412$ 2,789,323$ (266,911)$ -10% 8,367,969$ 7,932,222$ 5,409,810$ (435,747)$ -5%
Project 9 2,314,692$ 2,189,900$ 124,792$ 6% 6,569,700$ 6,689,222$ 4,374,530$ 119,522$ 2%
Project 5 2,004,072$ 1,590,322$ 413,750$ 26% 4,770,966$ 4,890,222$ 2,886,150$ 119,256$ 2%
Project 6 1,328,922$ 1,890,321$ (561,399)$ -30% 5,670,963$ 5,670,482$ 4,341,560$ (481)$ 0%
Project 10 1,021,872$ 1,190,332$ (168,460)$ -14% 3,570,996$ 3,899,222$ 2,877,350$ 328,226$ 9%
Project 2 1,404,600$ 1,422,932$ (18,332)$ -1% 4,268,796$ 4,213,800$ 2,809,200$ (54,996)$ -1%
Project 7 1,046,526$ 1,000,222$ 46,304$ 5% 3,000,666$ 3,282,222$ 2,235,696$ 281,556$ 9%
Project 1 1,311,598$ 1,459,322$ (147,724)$ -10% 4,377,966$ 4,583,224$ 3,271,626$ 205,258$ 5%
Project 8 1,050,222$ 1,092,222$ (42,000)$ -4% 3,276,666$ 3,298,922$ 2,248,700$ 22,256$ 1%
Project 3 999,598$ 1,028,222$ (28,624)$ -3% 3,084,666$ 3,592,443$ 2,592,845$ 507,777$ 16%
15,004,514$ 15,653,118$ 46,959,354$ 48,051,981$ 33,047,467$ 1,092,627$

28. Value Creating Techniques
Financial Transparency & Insight
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$8,500,000
$9,000,000
$9,500,000
$10,000,000
$10,500,000
$11,000,000
$11,500,000
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014
Rolling Wave Forecast By Quarter
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014
Enterprise Budget 10,072,206$ 9,568,596$ 11,079,427$ 10,525,455$ 9,999,183$
Americas 4,402,322$ 4,182,206$ 4,842,554$ 4,600,426$ 4,370,405$
EMEA 3,330,442$ 3,163,920$ 3,663,486$ 3,480,312$ 3,306,296$
APAC 2,339,442$ 2,222,470$ 2,573,386$ 2,444,717$ 2,322,481$

29. Value Creating Techniques
Financial Transparency & Insight
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30. Managing theApplication Portfolio
3 key Pillars
The Right Portfolio
Maximizing the
overall return on
Investment
The Right Governance
Application
Portfolio Mgmt.
Project Portfolio
Mgmt.
Financial Mgmt.
The Right Delivery
On time, budget,
scope
Value achieved

31. Call to Action…
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32. Demystifying IT Financial Management
Register for the next webcast in the series
www.umt.com

33. Questions & Answers