For the first time, HP’s new solution gives business and IT easy access to the information they need to do things like optimize cost structures, justify investments or cutbacks, or conduct budget/actual comparisons to monitor the profitability of IT services. It also enables costs per service unit to be calculated across the business, for example the cost per user, including the cost of licenses, hardware and labor, of a particular SAP application. This can then serve as the basis for budgeting, calculating and billing IT services.

The new solution consists of the following components:

• HP Financial Planning and Analysis (FPA): a new planning and analysis application. FPA provides the functionality of a BI application, plus a large number of preconfigured reports and analyses that are updated automatically at the click of a mouse.
• A newly developed, multidimensional data model for IT financial management in a data warehouse. 
• Data sources such as asset management, project and portfolio management, and ERP applications. The new version 8.0 of HP Project Portfolio Management Center, one of the most important sources of data for ITFM, features a range of significant enhancements for planning, gathering, analyzing and monitoring IT financial information. 
• New services for planning, designing and implementing IT financial management solutions.

The new solution expands HP’s portfolio of IT analytics applications, which so far has included IT Performance Analytics and Business Impact Analytics components for analyzing and measuring the operational performance of IT.

Aggregating scattered data sources

According to leading analysts, IT financial management is still in its infancy at most organizations, but the market is set to grow rapidly in the next few years. These days IT-relevant financial and cost information is typically stored in a variety of different IT management, financial and HR applications. Very few IT organizations have comprehensive processes in place for gathering, planning and analyzing financial and cost information. The result is that the costs of individual projects, equipment, labor and licenses are only available on an isolated basis. Analyzing this information across different areas of IT and the business is either impossible or very complicated and costly. And errors are frequent. According to a global survey of 200 senior IT directors commissioned by HP, three quarters of respondents admit that they can only calculate overall IT spend to a margin of error of 5 to 20 percent ⁽¹⁾.

HP FPA’s planning and analytics functions are based on a financial data model in a data warehouse. This uses ETL (extract, transform, load) technology to automatically load financial and cost information from all the relevant data sources, for instance asset management, project and portfolio management, the service desk, financial and cost accounting. Another source of data is the configuration management system, which uses tree structures to track the hardware, network and software components underlying specific IT services.

By integrating these data appropriately, CIOs and controllers can conduct multidimensional analyses of their IT function’s financial and cost situation. Predefined analytic paths enable organizations to drill down to the figures underlying key performance indicators. This enables them to answer questions such as:

• How do budgeted and actual costs compare for our ten most important IT services?
• What customers are driving up the costs of these services? 
• What is the ratio of fixed to variable costs for our inventory management system? 
• What is the trend in the costs for this service?

HP FPA is compatible with solutions from both HP and other providers. The most important sources of data in the HP portfolio are HP Asset Manager, HP Project Portfolio Management Center, HP Service Manager, and HP Configuration Management System. They are solutions from HP’s business technology optimization (IT management) portfolio.

New features in more detail

HP Financial Planning and Analysis (FPA) includes the following features:

• Predefined, multidimensional IT financial data model in a data warehouse
• Predefined ETL processes
• Predefined reports, e.g. budget/actual comparisons, cost structure analysis, and cost distribution analysis
• Integrated cost and budget planning
• Multidimensional analysis of budgeted and actual costs per service, application, project, location, and organizational unit 
• Basic information for billing models 
• Analysis for detailed budget to actual cost comparisons

Version 8.0 of HP Project Portfolio Management Center

Version 8.0 of HP Project Portfolio Management Center (PPM) brings a whole range of enhancements related to the planning, budgeting and analysis of finances and costs. These new features are designed to support planning and project management staff in the management of IT spend, as well as providing higher-quality, more granular data for subsequent analysis in HP FPA. The new features of HP PPM 8.0 include:

• Financial summary: end-to-end view of the life cycle of an investment (project proposal, project, and asset)
• Proper accounting for the project investment budget 
• Cost forecasting: decoupling approved budget from expected costs
• Snapshots: a view of financial data at a specific point in time
• Plan of record: a snapshot as a basis, or for planning and conducting comparisons

New IT financial management services

HP has developed a portfolio of services especially for IT financial management, designed to gear the ITFM solution to the requirements of the business and IT, accelerate implementation, minimize risks, and assure quality. The portfolio includes the following planning and implementation services:

• Strategy and Advisory Services: analyzing and presenting requirements and gaps in data, processes and technology; developing detailed implementation plan
• Process Consulting and Solution Implementation Services: accelerating implementation of ITFM and PPM by using proprietary HP methodologies (including HP Service Management Reference Model) 
• Best Practices for Configuration Management System: implementing automatic inventorying of IT components, including modeling the cost relationship between IT components and IT services

⁽¹⁾ Source: Internet survey of 200 senior IT directors worldwide, conducted by PSB Research in May 2009


About HP

HP, the world’s largest technology company, simplifies the handling of technologies for consumers and businesses - with an offering that comprises the areas printing, personal computing, software, services and IT infrastructure.
For further information about the company (NYSE, Nasdaq, HPQ) and the products, please visit http://www.hp.com/ch.

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Barbara Gfeller
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