Lontra Launches Lontra SUCSESS™: Service Unit Costing Strategy for Enterprise Shared Services
Innovative methodology guides shared services organizations in transforming themselves to a customer-centric business, with full transparency around IT offerings and their unit costs.
New York, NY, USA. October 22, 2008-- Lontra, a leading provider of IT Financial Management education and consulting services, today launched its new Lontra SUCSESS™ methodology. This innovative methodology guides shared services organizations in transforming themselves to a customer-centric business, with full transparency around IT offerings and their unit costs.
Lontra SUCSESS™ stands for Service Unit Costing Strategy for Enterprise Shared Services, and it has already been successfully applied to IT organizations at multiple Global 1000 companies, as well as to enterprise shared services organizations beyond IT.
“This methodology has been developed by Lontra consultants over the last four years, based on extensive experience in the field,”
said Lontra founder Boris Pevzner.
“It represents best practices refined over the course of many engagements, and is an innovative and effective way to approach ITSM and ITFM projects. Lontra SUCSESS™ can be used to dramatically reduce an organization's IT costs.”
Lontra SUCSESS™ consists of the following ten steps:
Step 1. IT (Technical) Services Inventory. Catalog all technical services offered by your IT organization. These are the underlying services used to support IT's customer-facing offerings, such as application hosting, disk space, web analytics, etc.
Step 2. Business Services Inventory. Catalog all business services consumed by your customers. These are IT's customer-facing offerings, which may include email access, use of various applications, Internet access, etc.
Step 3. Hierarchical Service Portfolio. Map all the business services from step 2 to their underlying technical service components from step 1. For instance, the business service providing access to a finance system may be built on top of several technical services, such as an Oracle database, a managed server, and a backup service. This will help you align your IT services with business needs. The resulting Service Portfolio is your IT organization's Service Model.
Step 4. Service Cost Modeling. Create a full cost model by mapping the Service Model from step 3 to the appropriate general ledger (GL) cost centers, such that every IT cost element is appropriately assigned to business services depending on it. Identify consumption drivers for each business service. This is your IT organization's Service Cost Model.
Step 5. Service Unit Costing. Identify the consumption volume for each business service, and calculate unit cost for each service using this consumption volume in conjunction with the Service Cost Model from step 4.
Step 6. Service Cost Benchmarking. Compare your unit costs to industry benchmarks. (Make sure to compare "apples to apples"!) Identify opportunities for internal improvement, external sourcing, and other performance optimizing business decisions.
Step 7. Shadow Invoicing. Begin generating monthly or quarterly "shadow invoices" for each organizational unit, based on the business services offered, their unit costs, and actual monthly/quarterly usage. This will give you insight into how much each business unit actually spends on IT services.
Step 8. Demand-Driven Budgeting and Planning. Use the service hierarchy and cost model set up in the previous seven steps to help IT's business customers plan their IT usage in terms of service units (and their associated unit costs), revise the IT budget appropriately, plan effectively for demand increases, etc. This is the step where you can very significantly reduce your overall IT spend.
Step 9. Business Planning Scenarios. Apply the Service Cost Model to analyze the impact of various business decisions on service unit costs and the overall IT spend. Examples: impact of top-down IT spend reductions, technology changes (such as virtualization), M&A related adjustments, etc.
Step 10. Communication and Rollout. This step really substantiates all the other steps. It involves presenting all these changes to customers, and educating your organization about them. The entire IT Financial Management effort may fail without proper communication
Lontra is an industry leader in IT service management and financial management education and consulting. Lontra's consultants help IT organizations define services, align their services to the needs of the business, determine true unit cost, manage and control IT spend, better plan for future demand, and improve service delivery. The company is headquartered in New York, NY. For more information, send an email to email@example.com, or visit www.lontra.com.
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Lontra SUCSESS™ Methodology
The innovative Lontra SUCSESS™ methodology lies at the core of Lontra's education and consulting offerings. It focuses on helping clients transition toward running IT like a customer-centric business, with full transparency around IT offerings and their unit costs.
Lontra SUCSESS™ stands for Service Unit Costing Strategy for Enterprise Shared Services, and it has been successfully applied to IT organizations at multiple Global 1000 companies, as well as to enterprise shared services organizations beyond IT.
Lontra's award-winning consultants have a wealth of experience implementing best practice service catalogs and service portfolios, as well as developing service-based costing and budgeting. We have a track record of helping Global 1000 organizations achieve their IT Service Management (ITSM) and IT Financial Management (ITFM) goals, and can help you.
Email us to learn more about Lontra's ITFM and ITSM consulting offerings.
We offer practical document templates and hands-on workshops that will translate into immediate success for your IT organization's Service Management and Financial Management efforts without breaking the bank. Use your training budget wisely, and purchase one of Lontra's unique and effective offerings today!