Variations in IT sourcing strategies

Apptio has released its first IT Economics Report profiling enterprise IT spending patterns. Every month, the world’s largest organisations use Apptio’s Cost Transparency application to calculate and analyse over $160 billion in annual combined IT spend. For the Apptio IT Economics Report, the company analysed the IT investments made by its customers last year and found three common resourcing strategies. These patterns, or archetypes, each represent companies with atypically high investment emphasis on one of the following IT resources: People, Services or Technology.

“Prior to this analysis, all currently available market data on the state of IT investments was surveybased. To derive these new insights, we analyzed the data flowing through Apptio’s powerful in-memory cost analytics platform to discover how IT leaders are truly spending their budget,” said Apptio CEO, Sunny Gupta. “In a market filled with anecdotal, assumptive data, today’s report represents the future of market-level spend analysis that only Apptio can provide.”

Apptio was able to normalize its data and retrieve these insights due to its industry-standard cost model – the Apptio TBM Unified Model (ATUM). Because users of Apptio Cost Transparency rely on this standard model for their monthly cost analytics, Apptio compared IT spend across its customers to uncover common patterns. The analysis uncovered 3 groups that focused more investment in specific areas:
? People: This category represents companies outsourcing labor and operations to contractors, rather than service providers.
? Services: Includes organisations with a reliance on service providers who tend to supplement hardware and software spend with third parties.
? Technology: Organisations in the software archetype tend to focus their investments on automated software solutions that are funded by lower spending on labor and services.

“Never before has the market and industry had access to the kind of credibility provided by analysing actual costs, rather than costs accumulated during occasional consulting projects or surveyed estimates.” said Ted Kummert, Apptio EVP of Engineering and Cloud Operations. “This year, we’ll be releasing the results of our analysis on a quarterly basis that will provide the market with a more accurate and nuanced understanding of how technology impacts the bottom line of today’s largest organisations.“

Used by more than one-third of the Fortune 100, Apptio’s SaaS applications provide CIOs, infrastructure and operations professionals, and IT finance leaders with a business management system. The data derived from Apptio’s applications empower IT leaders to communicate the cost, quality, and value of their IT investments to their business partners.