"With Digital Fuel's unique solution, companies can attain the necessary cost visibility to make critical IT decisions and know what the business impact will be—many, in all likelihood, for the first time ever."
– George Spalding, VP
Pink Elephant

As Budget Cutting Pressures Mount, Digital Fuel Provides Critical Insight Into Cost Drivers Behind IT Services

Digital Fuel IT Cost Management Software Drives Cost Visibility of IT Services, Helping IT and Its Business User Departments Wisely Manage Their Spending in Tight Economy

SAN MATEO, CA - (March 30, 2009) - The year 2009 is shaping up to be one of the most cost-conscious ever for global business. Many IT departments are being asked to perform their tasks despite historically deep cuts. But after the obvious frills and excesses are purged from IT spending, how can managers effectively respond when their companies insist on further cost-cutting?

"No question, IT is under pressure to do more with less like never before," said Yisrael Dancziger, CEO of IT Service Management (ITSM) leader Digital Fuel. "Economic pressures have created a new imperative. But under these conditions, increased cost visibility cannot be accomplished with spreadsheets or BI tools. The time has come for a different, more effective method for managing IT costs, evaluating IT investments, and proactively ensuring that IT services are delivered under budget and at lower cost than the industry average. This is the way for IT departments to not only optimize their spend, but also deliver greater business value."

Where previous strategies used to focus on managing assets, IT cost management is now evolving to address business results. Today, in fact, it's possible to map business services-those consumed by end users across the business-directly to their associated IT costs. By identifying and reporting the actual cost to supply specific services, and understanding the associated cost drivers, managers can make value judgments on how to optimize IT services, minimize service costs, and provide the greatest positive impact on business results.

Major companies with annual IT budgets of $50 million or more are finding Digital Fuel's ServiceFlow IT Cost Management a powerful software solution in realizing practical cost reductions that improve business results. Nationwide Mutual Insurance, one of the nation's largest full-service financial services and insurance companies, has integrated ServiceFlow into its IT financial management continual improvement process.

"By modeling IT costs and cost drivers by business service and then tying the cost of IT services back to the business units that consume them, we've been able to systematically reduce IT costs each year," said William Miller, Associate Vice President of Finance for Nationwide Mutual Insurance.

Cummins Inc., another company with major IT resources, was able to reduce its IT service billing by $10 million in its first year using Digital Fuel's IT Cost Management solution to track how and where resources were consumed. "Showing our end users the true cost of their technology requirements has been a significant step forward," noted Floyd Rutan, Executive Director of Cummins Business Services. "The Digital Fuel solution is now a key component of our overall IT service cost management initiatives." IT Cost Management not only is a highly practical line-of-business management tool, but also is being seen as a way for CIOs, CFOs and their staffs to better understand and synergize their efforts to improve profitability. "When CIOs can report the business value of individual IT services, it justifies investment by placing operating costs where they are accrued," noted Dancziger. "This has enormous implications for P&L reporting, increased profits, and improved returns from IT investments."

"The average large enterprise devotes 4.1% of its revenues today to IT. Clearly, in order for improvement to take place, it is critical for these organizations to gain complete and real-time visibility into their IT spend," stated Barbara Gomolski, Managing Vice President, Gartner Inc. "By identifying, connecting and tracking costs accurately by business service and by end users, IT departments can avoid the negative unintended consequences of reducing or eliminating costs that unexpectedly effect services that are critical to achieving the company's financial objectives."

Forrester Research, in its January, 2009 report "IT Operations Financial Management Helps The Business Control Its Service Consumption," cites Nationwide Mutual Insurance as a company whose IT organization is "currently moving from being a 'proactive cost center' to a 'collaborative business partner' via an IT financial management application platform that enables it to allocate activity costs to each business service. The measure of success for [Nationwide's] project is that the business units should have full control over how and how much they consume the business services that IT supports."

Forrester's case study highlights the use of Digital Fuel's IT Cost Management software as an important platform for helping reduce service costs, establishing programs for continual unit cost improvement, automating the chargeback process, and streamlining IT budgeting. "We believe this approach to be a strong and practical solution for gaining the necessary insight into IT costs so that IT decisions are based on facts and produce the desired business results," said Nationwide's Miller.

To receive a complimentary copy of the Forrester Research report and case study, visit http://info.digitalfuel.com/ForresterNationwidePR.html.

About Digital Fuel

Digital Fuel Technologies, Inc., is the leading provider of IT cost visibility solutions including IT Cost Management and Service Level Management (SLM) applications used by enterprises and commercial service providers. The company's business software applications manage billions in IT, telco and other business services at companies and governments around the world including BBC, BT, Capital One, Cisco, Computacenter, CSC, Cummins, Dell, Deutsche Bank, General Electric, Global Crossing, IBM, Nationwide, Nestle, Procter & Gamble, Siemens, SITA, Sprint, Steria, Telefonica, Telus, VW and Wipro. Digital Fuel is headquartered in San Mateo, California, USA, with offices across North America and Europe. Learn more at www.DigitalFuel.com.