As Phil Murphy, a principal analyst at Forrester Research, sees it, this emerging integrated IT management system might ultimately provide a level of analytic detail that could finally help IT "stop looking like incompetent managers" to their business peers. "If I'm in charge of a business unit reporting to a vice president," he explains, "my M.O. is to get the most I can out of IT at the expense of my peers. I want it all, plus 10 percent. And this puts me in conflict with my peers and IT. The vice president of that business unit, on the other hand, wants to maintain the right balance across all those business units to ensure that the R&D group gets the right percent of the budget as approved to the human resources group. But to do that, IT needs the ability to show each of them where their money is going. Right now, IT can do this only at a gross level."
Says AMR's Gaughan, "We are seeing more CIOs coming from the business side of the house. And they're saying, 'Where are the tools I need to manage all this complexity? I don't have visibility into what's being done.'" For the most part, he says, IT has missed out on the very BI tools, such as dashboards and balanced scorecards, that it has been providing so successfully to CFOs and line executives all these years. "There's a huge gap, and Excel can't cover it anymore," Gaughan says.
And neither, it appears, can traditional financial and BI systems. "I have hundreds of systems and hundreds of projects to manage," says Charlie Curcio, CFO of IT at Axa Financial. "Typical G/Ls do not easily delve into that level of detail. I need to set up matrices of information that show what's going on by individual IT manager, the different areas of the business they're supporting, and the nature of their expenses." To accomplish that, Curcio has actually turned to a business-performance management (BPM) tool called TM1, supplied by Applix. But because it was not designed specifically for IT, he says, the software has required some customization.
So far, only a few firms have set out to combine more than a handful of IT business-management functions in a single software product. ITM Software offers a five-application suite centered around a relational-data model. The company designed this model to ensure that each of its applications, including the Hyperion-supplied analytics, has immediate access to any updates related to IT personnel, assets, vendor relationships, proposed and current development projects, financial budgets and expense data, and governance and compliance issues.
LifeScan is one of ITM's early, and pleased, customers. Although the CFO was not involved in choosing ITM, Fackler says that he and his staff, as well as her own, have already made good use of the information that the tool provides. Fackler views the overall working relationship between her team and the finance department as one of her most important. She says she appreciates having a tool that lets her more quickly address questions raised by finance.
Another suite provider is Business Engine, which can trace its roots to 1986, when it launched software that helped aerospace, pharmaceutical, and financial services companies plan and manage complex research and development projects. The firm later narrowed its focus to IT, using project planning as a platform on which to add budgeting and other capabilities.
Lehman Bros. is one of several hundred companies relying on Business Engine's software to monitor and analyze its IT budget spend across its IT project portfolio. Sharing data with 12 other systems inside Lehman, the software captures many attributes of each project and enables rich analyses that weren't possible in the past, when the company managed IT spending using a general-purpose financial-accounting system. "It shows us hardware and software spend, automatically calculates depreciation and amortization, and feeds the procurement system, the general ledger, and the systems that generate invoices," says Brian Greenberg, a vice president in Lehman's IT group.
Mercury Interactive is after the same market with a competing suite called IT Governance Center. And so is Enamics, with a set of "business technology management" services that include processes, templates, and analytics.
As in all categories of software, there is a tension between the all-in-one suites and the narrowly focused, best-of-breed products. The former integrate a variety of functions, which can make them easier to use (though it may take some work to populate their databases). The latter, with dedicated development teams behind them, often evolve more quickly and may show benefits faster.
Analysts agree that customers have plenty to gain from a unified tool set based on a shared view of IT resources and activities. "The suite is absolutely the endgame here," says Murphy at Forrester. Over time, major players like IBM, and perhaps even ERP vendors such as SAP and Oracle, will likely acquire point products to create their own suites for IT management. In the meantime, though, the specialist firms are continuing to work out ways for their products to share information with one another. "The big gripe is double entry of data," says Greenberg at Lehman Bros. "Don't make me tell another system data it already knows."
If there is a major weakness in these emerging IT-management tools, some observers say, it is their heavy, almost exclusive focus on discretionary spending — that is, managing development projects — instead of on the maintenance activities that actually consume the bulk of most IT budgets. Says Charles T. Betz, author of the erp4it.com Weblog, "these products have no story to tell about bringing efficiency to maintenance-related spending. It's really a challenge for them. But maintenance is the biggest IT risk for many companies. Some are looking at maintenance expenses that actually exceed their entire IT budgets, leaving them no money [with which] to innovate."
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