In the last tutorials we have shown how to map the IT Organization in terms of OUs, people and their related skills.
Now we would like to focus more on the IT Operational model (which are the activities performed in the IT department), on IT Spending (where the IT Organization allocate its money on the previously defined activities) and Sourcing (what is the allocation of internal and external people on the previously defined activities).
In MappIT all these activities are performed through the IT Activity form:
Using this form you can define exactly which are the activities performed in you IT Organization; for each of these activities you can define some basic attributes like:
- Level of continuity (or criticality) required for this activity
- IT Department allocated to this activity
Some of these activities are Modules and Initiative independent, but in some cases they are related to a specific Module and/or Initiative, in this case you can also link the activity to that IT landscape components.
After completing the first IT Activity definition you can start allocating your resources (internal people and external spending) to this activities.
For doing this first of all you should select the Budget Version you want to work on; then you can start adding new Budget items to the activity adding new rows to the Spending section.
In alternative you can copy&paste budget items form excel to MappIT Spending Allocation grid and Supplier Grid.
For each of this budget items you should provide the following information:
- Budget Code (a code that refer to you internal ERP or G/L code structure)
- Budget version (if you want to keep different versions/forecast of you budget, for example by Quarter)
- IT activity (to which this budget item refer to)
- Type of Expenditure (Capex or OPex)
- Cost type (Hardware, Software, Professional Services…)
- Value (the exact amount of money related to this budget item)
Based on this Value and on the Average Supplier fee the system can evaluate the estimation of external FTEs allocated to each activity. For the internal activity instead you can directly allocate their effort using another MappIT tab:
Through this tab you can define the % of a person is allocated to each activity; and for each of this allocation you can also define which specific skill role should be used for this activity.
Again, this activity can be also managed massively through cut&paste from Excel to the Internal Allocation grid:
Based on this information now you can analyse your operational model in terms of:
- Current percentage of FTEs for each activity
- Current Insourcing Percentage (% Internal vs. Total FTEs)
- Current Average Supplier Fee
The last part of this activity is the estimation of the Target Sourcing Model; this can be done using the “Current and target Operative Model” tab.
From this tab you can see for each activity what is the current sourcing model and some key information related to this activity:
- Modules Maturity
- Module Business relevance
- Module Business Criticality
- Initiative Priority
- Initiative expected Impacts
Based on these information you can define some key sourcing attributes that can help in defining what is the right target sourcing model; this attributes are:
- Lifecycle maturity stage of the activity (mainly related to Module Maturity)
- Level of governance that you want on the activity (mainly related to Business Relevance and criticality and Initiative Priority)
- Level of expected increase/decrease FTEs value (mainly based on Initiative Impact estimation)
- Level of expected competence expected for the activity
When all this value have been set the system calculate the Target reference sourcing model for this activity and the exact values of internal and external FTEs and the expected change in Supplier Fee and related Budget.
I will describe in more details later how the Target Reference Sourcing model is evaluated.