Balance Budgets and Big Ideas with Apptio’s Approach to IT Cost Optimization

To succeed in 2025, companies must achieve two seemingly contradictory goals: drive innovation while also reducing operating expenses. A recent Forrester report illustrates this reality, stating that 90% of organizations expect to increase their technology spend in 2025, despite tightening budgets. 

This puts CFOs and CIOs in the hot seat, forced to answer tough questions like:

• What are innovative ways to lower ballooning operational expenses?
• How much value is each team and initiative actually delivering?
• How do inefficiencies like dependencies and wait states impacting the cost of work?

To navigate these competing demands, many leaders feel boxed into one of three unappealing choices:

1. Make investments and cuts quickly but blindly.
2. Take time to sift through mounds of data but make decisions too late to be effective.
3. Spend valuable time aggregating data, discover that much of it is inaccurate, and end up making a gut-based decision anyway.

Praecipio recently released an ebook—Profit by Design: How to Master Cost Optimization—that takes a deep dive into these challenges. This article offers a more focused, technical look at how Apptio can help solve them.

Apptio, an IBM company, empowers CFOs to move beyond traditional, often manual and time-consuming financial processes and embrace a more data-driven, strategic approach to managing technology investments. Combined with Praecipio's VISTA methodology, this approach leads to greater efficiency, cost savings, and ultimately, better business outcomes.

Your Costs Are Clear. Your Value Should Be Too.

Organizations are overwhelmed by fragmented data across disconnected tools, from strategy platforms like Planview to finance systems like Oracle. CIOs and CFOs struggle to manually aggregate this data, often using spreadsheets to connect costs to work. This process is time-consuming, error-prone, and leads to outdated insights.

As a result, decision-makers are left with limited visibility—clear on costs but unclear on the strategic value of spend. Apptio offers a solution to streamline this process and provide real-time, actionable insights that drive more informed decision-making.

Apptio: The Technology Leader in Financial Visibility

The Evolution from Cost Centers to Value Streams

Organizations are undergoing a fundamental shift in how they manage and optimize technology spend, moving away from traditional cost center models and toward value stream-based approaches.

This transition is essential as companies move from a project to a product-based mindset. 

At the current rate of disruption and decline, half of S&P 500 companies will be replaced in the next ten years.

Mik Kurston, Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework, 2018

Where Technology Costs Meet Business Value

Apptio, now part of IBM, is a leader in technology spend and value management, serving over 1,800 customers, including 60%+ of the Fortune 100, and managing $650B in spend. It is a founding member of the TBM Council and FinOps Foundation.

Apptio's cloud-based platform translates unstructured and structured data from thousands of sources into intelligence, recommendations, and actions that bring cross-functional alignment and positive financial impact. The platform enables complete Value Stream Management by integrating people, process, and technology to map, optimize, visualize, measure, and oversee the flow of business value. This applies across diverse software delivery pipelines, from initial idea through development and into production.

The platform provides a range of capabilities across the entire value stream:

• Ideate → Create → Release → Operate: Track time-to-value across the entire lead time
• Cost Transparency: Gain visibility into where your technology dollars go
• Usage & Consumption: Track how resources are being utilized across the enterprise
• Planning & Forecasting: Enable data-driven planning for future technology investments
• Benchmarking & Reporting: Compare performance against industry standards
• Product Costing/Profitability: Understand the full cost and value of your products
• Showback/Chargeback: Align technology costs with the business units consuming them

These capabilities are delivered through three core SaaS solutions:

ApptioOne: Comprehensive Technology Financial Management

ApptioOne is the foundation of Apptio's Technology Business Management suite, providing hybrid/multi-cloud cost transparency and planning. Key capabilities include:

• Technology Spend Management: Identify key spend drivers across on-premises, cloud, SaaS, and more
• Application/Service/Product TCO: Calculate complete TCO across your technology portfolio
• Defensible Forecasts & Planning: Build accurate forecasts with <1% variance from budget to actuals
• Showback & Chargeback: Enable defensible, transparent technology charging models
• IT Financial Management: Automate hybrid infrastructure, end-user, and security resource allocation

Organizations typically achieve:

• 15-25% savings identified within the first 30 days
• 75% reduction in planning time
• 40%+ rationalization of application inventory
• <1% variance between forecasts and actuals

Apptio Cloudability: Cloud Financial Management

Cloudability is Apptio's pioneering FinOps solution designed for maximum cost visibility and savings across cloud environments:

• Multi-cloud Cost Management: Unified visibility across AWS, Azure, GCP, and other cloud platforms
• Container Cost Optimization: Granular visibility into Kubernetes and container spending
• Anomaly Detection: AI-powered alerts that identify unusual spending patterns
• Automated Savings Programs: Maximize cloud provider discounts through optimized commitment management
• Unit Economics: Analyze customer profitability and service delivery costs

Organizations using Cloudability typically achieve:

• 30%+ reduction in cloud unit costs
• 100% allocation of cloud program costs
• 90%+ reservation coverage
• Near real-time visibility into cloud spending patterns
• Integration with CI/CD pipelines at build and deploy stages for financial awareness

Apptio Targetprocess: Portfolio Resource Management

Targetprocess is Apptio's Enterprise Agile Planning platform with comprehensive, granular financial data integration:

• Enterprise Portfolio Management: Dynamically plan and manage work, resources, and investments
• Resource Capacity Planning: Track availability and allocation of teams and individuals
• Financial Alignment: Connect delivery execution with financial data
• Strategic OKR Alignment: Measure value delivery and align work to organizational objectives
• Agile Funding Models: Support product-centric funding and capacity-based allocation

Organizations implementing Targetprocess typically achieve:

• 50% faster time-to-market
• 35% growth in talent productivity
• 33% budget captured to fund innovation
• Complete visibility from strategic planning to execution

Get Clear on Project Cost:
5 Steps with VISTA + Apptio

Getting to the point where a business can make swift, informed, and confident data-driven decisions about cost and investments can be accomplished in five steps, leveraging both Praecipio's VISTA methodology and Apptio's powerful solutions. Organizations can choose to stop after one or two steps, or complete all of them. Every step has a measurable impact, so wherever your business is now, it will realize benefits.

Here’s what that journey looks like for most companies:

Small Step #1: Create the Rosetta Stone

VISTA Methodology

The Visibility pillar of VISTA starts by identifying where project data is entered and stored. Praecipio's data experts help define common terms and add identifiers to ensure systems communicate effectively, with minimal effort and time.

Unify Your Data with Apptio

ApptioOne acts as the 'Rosetta Stone,' using the TBM taxonomy to unify data across systems. Key components include:

• Automated Data Collection: Connectors for systems like Oracle, SAP, and Workday extract data with minimal configuration
• ML-Based Data Mapping: Algorithms automatically map disparate data to a common taxonomy.

• Common Reference Architecture: TBM Model standardizes cost categories and allocations.

• • Cloudability enhances this unified language by providing:
    • Tag Management: Automated governance of cloud resource tagging for consistent categorization
    • Tag Inheritance: Propagation of organizational tags through resource hierarchies
    • Missing Tag Policies: Identification and remediation of untagged resources
  • Targetprocess contributes by:
    • Work Item Mapping: Standard templates for project structures and hierarchies
    • Financial Classification Fields: Custom fields that align work items with financial categories
    • Integration API: Robust API that enables bidirectional data flow

Small Step #2: Automate Key Connections

The next step is to automate key system-to-system connections to streamline data flow. 

VISTA Methodology

 The Integration pillar focuses on linking previously siloed systems, identifying valuable connections while ensuring minimal disruption to existing processes.

Apptio Technical Integration

ApptioOne's Data Fabric automates these connections with:

• ETL Pipelines: Production-grade extraction, transformation, and loading of data from multiple sources on configurable schedules
• Data Lake Architecture: A flexible repository that accommodates structured and unstructured data
• Smart Mapping Engine: Intelligent data transformation that maintains relationships between data sets
• Bidirectional Connectors: Pre-built connectors to major systems like SAP, Oracle, ServiceNow, AWS, Azure, and more

Cloudability's Integration Framework provides:

• Comprehensive Cloud Provider Coverage: Native connections to AWS, Azure, GCP, Oracle Cloud, and others
• Container Integration: Direct Kubernetes cost mapping capability
• Reserved Instance Analysis: Cross-account visibility and optimization
• Custom Tag Mapping: Dynamic tag mapping to business entities

Targetprocess Connections enable:

• Jira/ADO Synchronization: Bidirectional sync with task-level systems
• Resource Management Integration: Direct connection with Workday and other HR systems
• Financial System Connection: API-based integration with financial planning tools
• Portfolio Management Sync: PPM tool integration for strategic alignment

The image below shows the typical connections at this phase using the Apptio platform.

ApptioOne integrates financial data from systems like Oracle with project data from tools like Targetprocess, eliminating the need for manual spreadsheet aggregation and improving reporting accuracy. This step enhances data confidence and helps CIOs and CFOs reduce manual work. Some clients stop here, while others move on to invest in reporting and AI-supported dashboards.

Small Step #3: Achieve Basic Visualization & AI Readiness

Once the systems are integrated, the next step is to create accessible reports and dashboards, essential for leveraging AI insights.

VISTA Methodology

The Visibility pillar fully matures here, providing clear visibility into costs, resources, and progress. Praecipio works with organizations to define key metrics and develop visualizations for decision-making.

Apptio’s Real-Time Visibility & Tailored Insights

ApptioOne Visualization Layer delivers:

• Executive Dashboards: Customizable, role-based views for C-level decision-making
• Financial Reporting: Out-of-the-box financial reports aligned with TBM standards
• Service/Application Views: Drilldown capabilities from portfolios to individual services
• Variance Analysis: Side-by-side comparison of planned vs. actual spending
• Trend Analysis: Historical trend visualization with forecasting capability

Cloudability Analytics Platform provides:

• Cloud Cost Explorer: Interactive visualization of costs by service, account, and resource
• Anomaly Detection: AI-powered identification of unusual spending patterns
• Cost Forecasting: Predictive analytics for future cloud spending
• Savings Opportunities: Visual representation of optimization opportunities
• Business Mapping: Visualization of cloud costs by business context

Targetprocess Visual Management enables:

• Portfolio Kanban: Visual representation of initiatives and their progress
• Resource Allocation Views: Heat maps showing resource utilization across teams
• Financial Burndown: Visual tracking of budget consumption
• Strategic Alignment: Visualization of how work items connect to strategic objectives
• Custom Reports: Self-service reporting capabilities for different stakeholders

With basic data visualization, CIOs and CFOs gain near-real time access to project costs, eliminating the delays of traditional cost accounting processes. ApptioOne provides dashboards and reports for instant visibility into costs and progress, while Cloudability and Targetprocess offer cloud and project-level insights.

Creating reliable reports and dashboards hinges on support from the CFO and Finance team. When Finance comes in to verify and validate the automated results, ApptioOne's auditability features provide the transparency and reconciliation capabilities Finance needs to trust the data, building confidence for the next step.

Bringing Finance in early builds essential buy-in by showing how faster access to information supports better, timely investment decisions without compromising established processes.

Small Step #4: Add Cost Rules

VISTA Methodology

The Strategy pillar aligns financial governance with organizational objectives. Praecipio helps organizations document and automate cost allocation rules that reflect strategic priorities, providing a framework for consistent financial decision-making.

Align IT, Finance, and Business Strategy with Apptio

ApptioOne Cost Engine provides:

• Rule-Based Allocations: Visual rule builder for configuring complex allocation logic
• Tiered Distribution Models: Support for consumption-based, equal-split, and custom allocation methods
• Automated Journal Entry: Generation of journal entries for financial systems & GAAP compliance
• Capitalization Rules: Automated CapEx/OpEx classification based on configurable rules
• Audit Trail: Complete history of rule changes and impacts

Cloudability Financial Governance features:

• Custom Cost Rules: Business-specific rules for allocating shared cloud costs
• Commitment Management: Automated distribution of reservation benefits
• Amortization Rules: Configurable rules for upfront payment amortization
• Blended Rates: Creation of internal rates that account for discounts and commitments
• Cost Category Mapping: Alignment of cloud costs with financial categories

Targetprocess Financial Integration capabilities:

• Capitalization Rules: Automatic categorization of development activities as CapEx/OpEx
• Labor Cost Calculation: Integration with HR systems for accurate labor costing
• Budget Tracking: Real-time comparison of actuals against budgets
• Value Stream Costing: Financial allocation across value streams
• Financial Approval Workflows: Embedded approval processes for financial governance

By applying cost rules and leveraging ApptioOne's capitalization engine, organizations gain real-time visibility into OpEx vs. CapEx, enabling finance teams to capitalize sooner with audit-ready accuracy. When combined with Targetprocess, it also helps facilitate agile adoption by translating development activities into finance-friendly terms. The result is daily insight from estimates to actuals—empowering smarter tax decisions, clearer progress tracking, and faster value delivery.

Small Step #5: Push to Financial System

VISTA Methodology 

The Technology pillar focuses on closing the loop between project execution and financial systems. Praecipio helps organizations build bidirectional integrations that create real-time feedback for smarter planning.

Apptio’s IT and Financial Integration

• ApptioOne: Syncs with ERP systems (e.g., SAP, Oracle), automates journal entries, and aligns with financial calendars and planning tools.
• Cloudability: Connects to procurement and FP&A systems, automates reporting, and allocates cloud costs across business units.
• Targetprocess: Links budget approvals, milestone-based funding, and real-time financial KPIs to strategic outcomes.

By this stage, CIOs and CFOs are aligned, with trusted data flowing across systems. The final integration into core financial tools ensures faster reporting, audit readiness, and clear visibility into which projects deliver the most value. This enables better funding decisions starting immediately and moving forward.

No matter where an organization starts, each step delivers real, measurable impact.

Real-World Impact: Apptio Customer Success Stories

Organizations implementing Apptio's solutions have seen amazing results. From cutting IT expenses to fast-tracking innovation, these success stories show how companies are doing more with less:

Financial Services Leader

• Identified savings and redirected investment to deliver new services to millions of customers without increasing member dues
• Reduced infrastructure costs by 30% across the board

Technology Company

• Rolled-up hundreds of AWS accounts across subsidiaries to maximize cloud savings
• Optimized $10M in spend in the first 90 days
• Reinvested savings in modernization efforts

Fortune 500 Enterprise

• Mapped application TCO to over 450 different business applications
• Eliminated $75M in stranded and direct costs from a divestiture in 100 days

Global Retail Organization

• Reduced IT cost spend by 20%
• Enabled innovation delivery to market faster with business requests turned around in 3-4 hours vs. 3-4 weeks

Multinational Corporation

• 25% reduction in cloud costs
• 25% increase in digital platform sales and 10% reduction in legacy applications
• Replaced 6 different tools and manual processes with an integrated solution

Organizations can improve data visibility and connectivity without halting day-to-day operations. With the right experts, much of the work happens behind the scenes—minimizing disruption while ensuring steady progress.

That said, success depends on a few key principles:

• Steps must be followed in order—no skipping ahead.
• CIO and CFO engagement and alignment are critical.
• Teams must be open to uncovering and addressing gaps in data and processes.
• Progress should be measured against clear goals.
• Testing is non-negotiable.

Better Together: The Full Apptio Ecosystem

You get the most out of Apptio when its tools work with platforms like Atlassian. Together, they create an integrated system that provides complete cost visibility. This unified approach connects project, cloud, and financial data to show the true cost of delivering technology across the enterprise.

Total Cost of Ownership: A Complete Picture

By integrating ApptioOne, Targetprocess, Cloudability, ERP systems, and tools like Jira, organizations gain a holistic view of value streams and their costs, broken down into clear components:

Value Stream + (Labor + Infrastructure + Facilities + Charge Back) = Total Cost of Ownership

This insight allows for better internal benchmarking, unit cost metrics, performance visibility, and P&L alignment, empowering CIOs and CFOs to make smarter, data-informed investment decisions across their entire tech portfolio.

The Path Forward with VISTA and Apptio

When every investment matters, speed to insight is everything. Connecting data across the enterprise helps organizations reduce operational spend and reinvest in innovation that drives real growth.

Praecipio’s VISTA methodology, combined with Apptio’s financial visibility tools, offers a practical, step-by-step path to better decision-making. This isn’t a sweeping transformation; it’s a focused, incremental approach that delivers measurable value at every stage.

With Apptio powering transparency into costs and performance, CIOs and CFOs gain the clarity to act with confidence and drive innovation while keeping expenses in check.