[Music] welcome everyone to our itvm informal value talk delivered by servicenow advisory team and by many other servicenow experts this is 20 minutes talk with it business management we love challenges and we hope that you like it too today is episode number 10 and we have the pleasure to have amongst us fabio cresta also one of my team members in the itbm advisory solution consultant team in emea and he has an amazing background and experience in the ppm and agile space and also digital transformation the topic prepared for today is investment funding extremely important to understand that the value that can bring to organizations and why it matters more than ever a key aspect especially during the pandemic and after the pandemic this presentation may contain four well-looking statements that reflect the current beliefs of servicenow and are based on the current information available these four well-looking statements should not be rely upon making purchasing decisions great so we're saying all of that thank you very much fabio for taking the challenge of delivering value within 20 minutes and why don't you give us a quick introduction about yourself and then the floor is yours okay thanks aurora for introducing me hello everyone i'm fabio cresta i am a solution consultant specializing on etvm in servicenow i joined servicenow last july in 2020 but i worked at the last 15 16 years on the ppm space in another company and i'm basically milan in italy and [Music] today i will talk about how we manage we help companies manage their budgeting and their investment funding so first of all i want to introduce what the definition that we usually use to to explain to the customer how we manage the budget first of all we usually uh split the the main budget in two main areas uh one area is called non-discretionary coaster which basically are the costs that are required just to keep the lights on so for instance uh software license application maintenance infrastructure cost security cost okay these are costs that you have to spend but does not provide any value to the business it's just keep the light on okay you cannot remove them otherwise everything fall down but you but it's not a value-added cost on the other side we have the discretionary cost okay this is the part of the budget that is required if you want to support new business or new cost reduction initiative you need to to be compliance when you know or or or create new products or new applications and these are the costs that does provide added value to the business usually in in the in the market we have a split between uh 70 30 or 80 20 being the the the higher part non-discretionary cost and the lower part by discretionary cost how would men how the budget are managed and where are managed so basically this picture represents what what is covered in the itdm solution for from servicenow so we can manage strategies defining objective goals strategies and metrics uh we can manage alignments or portfolios to define the what-if analysis and define what to move on and what's to stop and so forth so application solution and then we have the execution layer that let us manage project in different in different way waterfall agile hybrid or any other type and all the things are all the requests that came from the intake part so we managed demand we imagine so having said that the discretionary budget so that the part that is providing value to the business usually is managed at higher level so it's the it's linked to strategies to objectives to goals usually is what the market is called defining the master plan for the next one two or three years so given the budget we get the demands the the initiative that we want to provide to to provide value to the business and then we need to understand which initiative we can do uh given the discretionary budget that we have of course the the budget must be refined in case in case something changed so the strategies change the goals change the the pandemic that has raised the last year [Music] was one of the main reasons why many companies has to change their their strategies their priorities and so forth on the other side the non-discretionary budget usually is managed at the lower level what happens at the beginning of the year the different views of the different part of the organization says how much they need to spend to keep the lights on so it is usually identified at the beginning of the years and is a it's a top-down top-down methodology because they they know and each part of the company knows how much they have to spend to keep the light on okay why need to the continuous planning uh continuous planning is adapting what the company is doing given external needs of change okay so for instance digital transformation uh it's a top priority for cio and it was prey and postcode 19 but given some surveys uh in this case is uh surveys taken by kpng the pandemic has accelerated the digital transformation so plan that should have been completed for the digital transformation may be in three or five years now as plan has been planned to complete in two years okay the budget will increase because the every company needs to increase operational infer efficiency customer engagement they have to enable workforce that mobile sports right now is working remotely so they need to have all the digitalization to let the to hire new new people to let them work remotely and so forth so this was a huge change and of course even the strategies and budget management has to follow the changes okay so how manage how the budget are managed okay first of all usually every company has an overall budget uh and they usually divide the budget split the budget in non-discretionary budget as already told and this discretionary budget is can be splitted in different way one of the most common way is by eu so hbu knows which project which product which service which application they have and they request and if you see we have the arrows here because uh the the request can come from top down or can be done in bottom-up so maybe that non-discretionary budget is splitted by views in a certain percentage so top-down but then we ask for budget for the different entities project product or application that need to be to be continuing on the other side we have the discretionary budget once again it can be split in any way but one of the most common is by bus and then these be used usually split them by portfolios so maybe one or more portfolios because one bu may have a different line of business so i have a pro they can have a portfolio for each line of business and once again the entities the low level entities project product service application can request budget from the portfolios and from the dbus this is the schema where on how most of the company works in on the budget how we as servicenow can help manage that budget management okay if you start usually budget uh is especially if we talk about i.t is tied to project and demands only okay we funding demands and projects but right now many companies are transitioning to agile and transition to agile doesn't mean that we just have some teams uh working with with the sticky notes but means that it's an organizational change with even the financial management needs to be changed because we are not funding project or demand anymore but we are going to fund digital products or teams or epics or any other entity that is typical for the agile if we talk about uh project non-id the business project okay so the business can fund uh can fund products or prevent new initiatives or new portfolios of products okay the the budget could be split not only by bu as we reported before as an example but we can split the budget for instance by strategies or by capabilities or by portfolio or even a mix of them okay so part of the budget by bu part of the budget by strategies and so forth and finally each entity the entity could be a project could be an initiative it could be a product it could be an application could be even co-funded meaning that they receive budget from different views or different portfolios or different strategies so to support all these capabilities we have the investment object in service now the investment budget means that anything that we have in service now can become a funding entity or a funding requester entity okay so we can have epics we can have a job release training we can have products but we will see even some more details what what what can what we can can define in the system investment funding let us fund manage the funding in two ways top down and bottom up or in a mix of them so top down meaning that for instance we have a the discretionary budget we split the budget by use or by portfolio or by strategies and then from the lower level uh the someone request a part of that budget to fund a project or application or services or whatever it is and this is a continually it's a rolling process so we can define the budget for one period it could be one one quarter or one year and then after three months we can revise the budget uh increase it or decreasing data request the budget for the next period and so forth so we can adjust about the budget given the the market or the external factor that can influence how we we need to to spend our money so as an example we see in the system that we can create any kind of investments okay so we can have for instance this is the global budget the overall budget and we can split the budget by capability or by business unit or a mixer mode or we can have the here it's called operational strategies meaning the non-discretional and the discretionary budget okay so it's it's very um it's very easy to create a new funding entity and from here we can see that for for instance starting from the strategic budget that received 42 million here the budget can fund in this case business units uh and then each business unit for instance the business unit hr that uh receive 14 14 million he will this business unity will fund the different things we will fund the business services or portfolios okay and what does it mean here does it mean that for instance the business should be made may have received the budget top down and then all these stuff at the lower level so business services or portfolio can request budget to the business unit same on the other side we have the strategic budget another business unit which is funding something different they their business unity is funding projects or funding teams okay so it's it's very it's very flexible to define what is a founding what is founded what who is requesting foundation and so forth and here we see for instance if we if in a part of that hierarchy we work in top in top down we can allocate funds so we start from the fact that we have 14 million here and we can allocate the funds here by period from two different entities so for instance here we are allocating budget to portfolios or to business services okay by quarter on on the other way around if we need to manage a request a fund request is for a bottom up request we we are here in a business unit that we are requesting budget for instance by uh part of the strategic budget because we need to fund a new strategic initiative part of the budget is by is operational because we need to keep the light on inside our business unit but just to show you the the flexibility that the system has of course it's not the real it's not it's not the reality but we can even define that each single user could be a funding entity so we can request even fund from single user just one just to let you know that the flexibility is extremely high okay once we have defined the budget uh of course uh we have the our um our request so our demands our projects or any other type of investment so we can use the portfolio planning workbench i won't go in details because if you want to see all the details about portfolio planning world bench you can see the episode 9 on youtube but basically uh within the portfolio we don't edit the target in the portfolio as is usually done if you we don't use the investment funding but in that case the amount of the budget for this portfolio which in case is one million for is taken but from the portfolio investment funding entity okay so where we define there and we can request fund from the higher level entity and so forth but in that case we already have the budget and we can define if you are over budget which the m and the win project will stop to approve and so forth making even scenarios and what if analysis so to to to finish if you use investment funding in servicenow itbm you can manage budget that keeps the light on and support strategic outcomes so both the non-discretionary and discretionary budget you can manage the budget in a mixed way so it could be all top down all bottom up all in a mixed way and you can even magic co-funding so funding a business unit a capability a project by different funding entities and finally when you go to the execution layer we support for project all the methodologies so waterfall agile and hybrid and agile even in the financial point of view so we can fund not projects but we can count teams apics agile restraints or any other agile topic thank you fabio thank you very much for the overview it was an excellent summary as i said investment funding it was a top priority before but today it has a very very relevant aspect if you feel curious and you want to know more i'm going to give you two tips go to the communities we have a bunch of information different material content deep dive demos in the product podcasts and webinars what is coming in the new releases and second tip go to youtube channel and we have plenty of other episodes about itbm value talks go there explode it find information that you're looking for so i hope that you enjoyed it it was really fantastic thank you very much fabio and saying a lot of that i hope that we can meet again