For many years IT has been admonished to run “more like a business”. What this phrase meant was never clear. Some strategist envisioned “more like a business” to mean profit driven, a concept that never gained much currency for internal IT organizations. Others took it simply to mean more structured management.

Today we can begin to describe and build a realizable architecture that makes “more like a business” into a concept of IT as a business. It derives from a concept of IT as a catalog of business services that are offered to the lines of business within the corporation. It does not require IT to become a profit center, but does force more market driven initiatives. It is built on the business process optimization model called for by ITIL and uses new technologies such as the utility data center, SOA, and SAAS. It is the concrete fulfillment of IT being run like a business.

In September 2006, the IRS and Glaxo-SmithKline Holdings, Inc. settled the largest tax dispute in the history of the IRS - $3.4B. This dispute has sent a loud wake-up call to multi-national companies in which goods or services are developed, provided and/or supported by one country to another. Transfer pricing refers to all aspects of global inter-company pricing arrangements between related business entities, for example, services, goods, intellectual property, loans and other financing transactions. Cross border transactions are growing rapidly and becoming more complex. The U.S. and many other countries have instituted numerous complex and sometimes competing regulations in order to protect tax revenue on goods and services supplied by their nation to another. This presentation will address the implications of the new transfer pricing regulations on IT Service Level Management and pricing and suggest some approaches for addressing them.

Virtualization of servers and storage is shaping up to be “the Next Big Thing” in the world of IT Infrastructure. This technology promises to fundamentally change the economics of service delivery for corporate and governmental data centers and challenge the cost models and chargeback architectures that are now in place. The promise is to radically lower the unit cost of service delivery by driving up the utilization of servers and storage through application sharing. Already single physical servers in many data centers are executing 50 or more virtual servers and thus sharing previously low utilized resources that had been dedicated to specific applications or user departments. How ready are vendors to respond to the challenge of identifying, measuring, and costing in the new matrix of this virtualized world?

“Running IT as a Business” and “IT/Business Alignment” are central themes today, challenging IT organizations to articulate the services they provide, the value of these services, and, how well these services represent the needs of the business. Increasingly, organizations are crafting service catalogs - often a daunting task - in response to these demands. Service catalogs are central to Service Level Management. They are perhaps the best vehicle for linking business needs to services provided, providing cost transparency, and improving efficiency by influencing demand. This presentation discusses best practices in Service Level Management, challenges faced in building a service catalog, options and approaches, contents of a service catalog, linkage with Financial Management and chargeback, and IT/process teams involved.

The Integrated Capacity Program, developed at one of the world's largest financial institutions, took a corporate approach to demand management for this geographically dispersed and technology diverse organization. ITIL was chosen as the best practices framework. This presentation will cover how ITIL-based capacity management across multi-dimensioned distributed organizations was implemented with the goal of establishing business aligned, collaborative planning.

Most organizations are facing increased regulatory compliance requirements as well as pressure to deliver top quality service at the lowest possible price. In searching for industry best practice support, an increasing number of organizations world-wide are turning to ITIL, the IT Infrastructure Library. The ITIL framework provides a methodology for IT process improvement, and guidelines for defining the organization, process elements, metrics and reporting needed to support it. IT Financial Management is one of ten processes defined by ITIL. It allows an IT organization to clearly account for and articulate the costs of delivering IT Services. There are 3 fundamental components with this process: Budgeting, IT Accounting, and Charging. This presentation explores the components of the Financial Management process, with a special emphasis on charging.

Since the end of the dot-com boom, large IT organizations have been moving to consolidated data centers to realize economies of scale, standardization of support services, and improved service delivery. All these goals are being achieved, but the barrier to full consolidation has been the difficulty of sharing applications within single servers. The result is low utilization of hundreds of dedicated servers supporting single applications. Today application sharing is being achieved within servers by implementation of virtualized operating systems. The result is utilization rates are driven up and unit costs can be driven down.

However, the biggest payback of virtualization remains unattained. The next step is to go beyond the server to virtualize the data center itself. The big payback is across the board cost reductions in hardware, software licenses, power consumption, floor space, and support personnel. This presentation addresses how to achieve data center virtualization and its cost reduction benefits.

IT is a production facility that produces information much like a factory produces cars, refrigerators, or just plain widgets. Looking at IT as an Information Factory clarifies much of our financial analysis of IT’s costs. This clarity is useful in developing allocation models that go beyond simple allocations (which are based on extraneous metrics and not on real costs and processes within IT). This presentation will look at IT as an Information Factory and cost allocation models that contribute to the planning and control of IT. It also covers the best practices approach of an integrated costing solution that includes usage-based and activity-based metrics.

Much ink has flowed in promoting, analyzing, and advertising “On Demand” computing. This session will discuss this latest big thing and its other manifestations as the IT Utility, Grid Computing, and Web Services. The focus of the presentation is the conditions necessary to make the On Demand concept viable for the services IT makes available to its users. Within this focus, various pricing models are discussed that can make On Demand computing from outside vendors an attractive option for IT organizations.