Metamorphosis worked with the global IT leadership team of a large oil and gas company to develop a strategic Cost Model of $150M in IT service costs.
Client: The client is a growth-focused global energy leader based in Calgary with world-wide operations.
Situation: The CIO was looking for a new approach to engage the business in more strategic conversations about the costs of IT services.
Approach: Using Metamorphosis’ Cost Mapping tool, framework and expertise, $150M in IT operating and capital costs was modelled and benchmarked for three global divisions in a series of projects from late 2010 to late 2011. Working remotely, a comprehensive cost model was developed within two to three months for each division. Metamorphosis then facilitated the development of cost management action plans while spending a week on-site with the IT leadership team in each location. The Cost Models were constructed to align with the client's benchmarking service provider, and a comprehensive benchmarking exercise was completed in less than half the time normally required. Finally, the Cost Model was transitioned to the client for ongoing sustainment.
Results: The global IT leadership team, for the first time ever, has visibility of the true cost of IT services. They are better prepared to engage the business in discussions about IT service costs and volumes, particularly for the annual budgeting process. Service managers are able to forecast and budget with more accuracy, as well as run scenarios to model the impact of a business change on IT costs and service volumes. The annual benchmarking exercise is now much easier and quicker to complete, with an improved level of accuracy. The client has identified additional applications for cost modelling to support strategic IT decision making as it evaluates new technologies and sourcing options.