instead of bringing up slides this time I figured I'd show you our community page but we do have a community page for the Digital Services forum and I like to I'll give you the link in the chat to this about page and what this has is if you go to our blog every week after the meeting so if you miss one of the meetings the recordings from all of our past meetings along with any of the content whether the content's a deck or an update set they'll be listed underneath this blog piece and so if you go back you'll see all the previous recordings up here so that's a good way to get to the content and the video in one area okay and I wanted to update you a little bit too on the piece here because I know some of you are using the um some of you are using the shared instance so one of the things on the the homepage that I'm going to give you is that um you'll see that we offer besides this meeting and besides this this community here what we offer is a shared instance that we put stuff on so I recently got rid of the shared instance we had so this get link to our shared instance we still get you there still send an email to me but I migrated everybody's accounts to a to a new instance and I I know Lou I see you on there I know a couple times that old instense got a little slow so about every like it's been about every year and a half that I've created a new instance and started from scratch so it's now DS forum is our shared instance and like I said your old passwords will work if you have if you have an issue with your old password just shoot me an email and I'll get you login to this one and just so everybody knows on these when you do get these accounts you'll be an admin H so as an admin you'll be able to go ahead and get access to anything that we've showed on the call so with that today's content we're going to go through some financials for digital products and we have some guest speakers on today we're gon to start out with Charles and then go into I think uh proven Optics has some tag teams that they're going to go back and forth and talk about digital products as well so with that I'll I'll hand it over to Charles and let Charles kick us off with some foundational information on the the financials hi I'm Charles Bartley I'm an Enterprise architect with service now um let me get this shared out perfect and I'm going to go off video while I'm presenting because you guys just don't need to see my face for that so what I want to talk to you about is um money and product management um and some techniques for understanding your organization and how to use that understanding to get the investment your product needs so to start out I'm going to uh pick up kind of where we left off last week or two weeks ago uh when John was speaking about digital product management in the context of uh federal state local um governments and how tax money funds the digital products in those environments and all of that we had a lot of questions around what is a digital product so the definition that I'm using comes from the open group um and it's a service physical item digital item that provides an agreed and specific outcome for the customer that incorporates and requires software to realize that outcome that is expected to require active management of the software by a provider over its life cycle and that is described by a formal offer of value that typically includes explicit pricing so I I took this straight from the open Group didn't add or or change anything there are other definitions of a digital product that's one of the things the open group's working on doing is kind ofing a bunch of the different definitions this is the one I'm going with um so Services can be a digital product applications can be a digital product or they can both be parts of a digital product a digital product could be like for example a modern car that has software the key there is the the software and the the code that makes that run is an integral part of delivering that product or service it doesn't have to be the whole thing obviously there's a lot more to a car than software one of the questions we got last week was what's the difference between project management and product management and there's whole books on this um mck kernin um project to product uh is probably the the the the most well-known book this is just kind of a quick summary here I'm not going to drain the slide exhaustively uh what it really comes down to is with a project your project has a start date it's got an end date it's got a scope and when you deliver that scope typically whatever you developed is going into sustaining whereas a product has a life cycle and that's going to go from ideation to initial construction to offering that product um on the market it's going to to whoever your customer base is it's going to last multiple iterations of that product most likely eventually that product's going to be sunsetted and retired you're talking a much longer time frame with product management than you are with project management remember projects you get to the end of your project you've met your scope your project shuts down whatever you had in are sustaining product management you're going the whole entire life cycle um couple of observations on this um when an organization is used to estimating and funding for projects and they start switching to product management one of the things I've observed is there's sticker shock like you are used to these comparatively small compact projects and now all of a sudden you're doing full life cycle out five maybe even 10 years for other products maybe even longer and you're trying to include all the costs the delivery costs the sustaining costs all the rest of that with the product your product estimate is going to be drastically higher than your project estimate you're still really talking the same money you're talk you're just looking at it holistically from the beginning um my role has often been as Enterprise architect so I get invol I've not been a product owner product manager directly myself but what I've done a lot in my career is worked with product managers to figure out what it's actually going to take to deliver their product idea try to figure out what that holistic life cycle looks like try and figure out those costs and then try and figure out how to get the investment for it um hot off the presses here um I just got finished talking with Mark bodman in our next um uh Digital Services Forum November 9th he's going to be talking about Enterprise architecture and its role in product management and helping to Define and shape the prod the the product so um in some ways I kind of wish we we'd had that topic going today a little bit first but it'll come next so when you hear next week what I'm presenting here very much or two weeks from now what I'm presenting here very much fits in with that trying to figure out that full life cycle trying to figure out those fully loaded costs and trying to get somebody to fund it so there's something I call the product owner hustle and and products can start because someone's got an idea or there's a need or an opportunity it could start because like you got an idea for digital transformation it could start from business demand it could start from looking at the the customer Market that that you're trying to address there's all sorts of ways it starts um really what you if you're a product owner your first priority is trying to understand your customers needs and the opportunity that you see to address that you got to have an idea on how to meet that need you got to get the money to fund your idea and that's what I'm going to be focusing on for for the rest of of this session right now then you got to build and deliver on your idea and you keep repeating that until your product is no longer relevant enough to fund so with product management like I said you're going for funding for the full life cycle and you want sustained funding you don't want funding for an MVP and then no funding after that that's not product management it is possible you pitch something that's going to have a multi-year life cycle and you get to your MVP and your sponsors say your product isn't delivering on that opportunity we choose to no longer fund it so with product management if you're not delivering value if you're not perceived as going the right direction funding can be cut but funding should always be shot uh sought after with a longer time Horizon so like I said I'm going to focus on how to get the money to fund your idea here so this is a useful exercise to to assist with that whole business case your your product development case I developed this after some uh leadership training at one of my former employers where they were really talking about its's role in the business and how that connects so a lot of what you're going to see here is technique that I've worked out for my use it's not formal architecture it's not complex I would say like the drawings I'm going to show you here are archet Tunes they don't have specific meanings to them um this is a thought exercise that I just happen to think by drawing so I start by plotting where I am with the product that I'm trying to pitch in relationship to where C enters your Enterprise and there's a lot of ways cash can enter your Enterprise that could be taxes if you're a government it could be tuition if you're a university it could be um Venture Capital funding it could be selling of products and services I was in manufacturing so for the for the rest of this uh you're going to see kind of a manufacturing idea um but whatever those sources of cash are it can even be like charge back or showback wherever those cash sources are put those on the far left side of your drawing and put you on the right side next you're going to plot your intermediate points between you and the point that cash entered the organization so first step is I go up my own reporting chain and I get the org that I'm a part of next I go to their boss which in my organization was another VP for the major business unit that I was a part of and then each hop to the left of where I'm at is another major or LED typically at my company led by a VP until I get to to the operating unit that directly brings in the cash I'm going to label each of those hops between the orgs with what the org to the right does for the org to the left I'm going to identify the stakeholders budget holders for each of those hops I'm going to find out what each of those stakeholders care about their Visions their drivers their goals their outcomes and then I'm going to use this knowledge to craft my investment request and deliver value messages to them so this is my example um yours will look different you aren't going to have the same number of hops in a different organization from what I have here um but you'll see the behavior here and you'll see the thought pattern so here on the left I'm I'm in manufacturing with some services so dollars come in when products and services go out over here the right was me at an earlier point in my career where I was portfolio manager for it management tools so my org it management tools was a part of an IT infrastructure operations group we supported application it so these would be like product uh product development uh using the word product too much let's say like supply chain it Finance it HR it all the rest to that supporting the different business functions those business functions supported manufacturing so I started with money put me through the intermediate organizations in between the next step is I'm drawing what each of these do for the other so in it management tools I supported the service now platform and we're providing it tooling and our primary customer was it infrastructure operations it infastructure manages the it infrastructure and the common Services their primary customer is the application it the application it manages the apps for the business functions the business functions do their function to support manufacturing and Manufacturing actually built the products and then we also had Service delivery in there too so this is the basic connectivity between money and me in one of of my previous organizations you commonly hear about the business and it for my example it these left three and the businesses the right two now as an IT person as an Enterprise architect it is part of the business too um but when you're in it and you're talking about the difference between it and business this would be where the drawing line is in my org everything from the business functions through it management tools was considered overhead and what do you do with overhead you ruthlessly minimize it so cost reduction is the main business case driver for all of the orgs outside of manufacturing they want cost to go down too but they also care about other things they care about the quality of the the products they're producing they care about um customer satisfaction whole bunch more stuff than just doing what they do at the least possible cause so then next I mapped out who the major players were for each of those groups for my immediate group it was a director all the rest in my company were VPS your titles May Vary this is where then when I'm trying to make a business case to fund something in it management tools I now know who the major players are and coming up here I can see what they're doing for the business and I can craft my messaging to them to appeal to their interests a couple oh and we'll put service now in uh because we're actually part of this whole chain too as we're supplier of it tools for it tool management for me service now was one of many platforms I managed at that point in my career so there's some behavioral rules that you can use in this type of diagram um that help you with your Communications first off is people can only see Zero to two hops in either direction of where they're at so coming back here as an IT tooling person I knew what was going on with service now because I attended knowledge and saw all that stuff I knew what it infrastructure needed from me I knew what app it needed from me I had ideas about what manufacturing and the business functions car about I didn't really know anybody in those organizations they're too far away from me I I didn't know what their latest goals and objectives were from their VPS that wasn't a part of the the circle that I had in my visibility if I were sitting here in this app it area so so like let's say I'm trying to provide Supply Chain management tools I know what Supply Chain management cares about I know why manufacturing cares about supply chain I know about infrastructure operations I know about it management tools I'm probably not up to date on what's the latest widget that just came out from service now so that first pattern is you can see one to two um hops away from where you are the next one what causes of issues are commonly addressed zero to two hops to the right of where you're at so coming back here if I'm in application it and I've got a problem with like let's say my devops tool chain it could be my people aren't using it right it could be I don't have the right Services um being offered by the infrastructure operations group it could also be I don't have the uh right actual tooling for that coming from the the tooling group so rot causes are commonly zero to two hops away you're going to look to there to fix it the benefits of initiatives are typically felt one to two hops to the left from where you're at so if I'm sitting here in it management tools and let's say we roll out virtual agent for chat uh for for supporting Incident Management the it management tool group is going to have an expenditure there because they have to stand up that tool and they have to do all the development for it who's going to benefit from it it's going to be it infrastructure operations which was where our help desk was it's going to be the app it people who are going to have higher degrees of case deflection and very vaguely the business function people might realize hey their incidents are getting resolved a little bit faster but they're not going to really know why it's going to be app it and it infrastructure operations that are going to really see the Direct Value from whatever I did with Incident Management and virtual agent your money always flows from the left to the right and your value delivery flows from the right to the left one last property of this the closer you are to the money the easier your business case or value case is going to be to make the farther you are from where the money comes in the harder it is so in in my world here in the it management my cases my business cases were all about cost reduction I could talk about operational efficiencies I could talk about risk reduction um that sort of thing but those weren't nearly as pervasive stories as sheer cost reduction because again in this org it tools are viewed as overhead in the interest of time I'm going to kind of blow through this this quiz a little bit where I'm going to pop the questions up I'm G to spend just a little bit of time there and then we're going to go right to the answers I thought about doing this as a poll but it was going to take too long and we want to get to the second half of the uh show today so these questions are all using this basic format to start answering questions that will help you craft Better Business investment cases so let's say I'm working on a csdm implementation effort which hops care about that csdm implementation effort if you remember the rule is your benefits are felt one to two hops to the left of you so the answer here is your app it people your infrastructure operations people and your it management tools people care about your csdm if you start going to a business function like supply chain or Finance or HR or even worse into the manufacturing programs and you start saying my csdm project needs funding they're going to laugh you out for one they don't know what csdm is they don't care about it it's not a relevant message to them question number two which hops care about reducing the number of unplanned manufacturing operations impacting outages my answer here is going to be every hop manufacturing cares about it because they want to keep their product uh lines going they they don't want them stopped by systems outage your business functions care because they can't have the interruption that's impacting manufacturing goes all the way down even your vendor cares about it service now in this case um everybody's going to care about those unplanned outages if you want to improve your Dev SEC Ops itm itom for the app it group where should we be investing remember that principle your Rook cause of issues is 0 to who hops to the right so you could be investing in app it saying they've got to do Dev SEC Ops itm iton better they need better adoption of those they need better training it could be your it infrastructure Services the help Des the monitoring Services um your your it talk if you've got those um your change management all the rest of that how those are practice it could be a tooling issue these are the groups that are going to care about that again the groups to the left the the business facing functions aren't going to care about those initiatives they're going to care that app it gets better at what it does they're not going to care how it got better so again this is all trying to help you craft your right message to the right people for the initiative you're going for question number four who will experience the benefit from improving well I just kind of answered that appit gets better at doing those things these guys are going to feel the benefit of it they're not going to know or care how they just care they got the outcome that this app is meeting its SLA it's having the right uptime it's not doing business some impacting outages it's meeting the needs of the business that's what they're going to care about that's what your messages should focus on and then the last question um who will experience the implementation and operations burden of having improved all of those and it's back to these left three so the benefits are felt over here on the left the costs are felt on the right there's an inherent mismatch between that the people who are bearing the burden of the cost don't feel the the benefit the people that getting the benefit don't know or care why the cost happened they just care they got what they needed from this group that they didn't know about so as a closing observation then we'll go over to proven Optics if you're a platform um or product or platform owner for service now and you're having a lot of problems getting appropriate funding for for your business cases maybe you can get better results by working with stakeholders much further to the left of you than you're used to doing so I'll come back here to the whole deal if my whole world here is I'm supporting these two functions I'm always going to be trapped in that overhead if I can make plays that tap into these left to most Chevrons that's where now of a sudden the business cares about me so even though it's a risk avoidance case that reducing unplanned outages that's a potent thing manufacturing does not want their uh product clients to be stopped if I can be saying we can help with the various business functions it we can do workflow for supply chain for the rest of those I might get funding that in turn can help me do the work back here better more efficiently as part of the deal on the way the more the the bottom line here is the more relevant you are to the business the easier it is to get sustained funding I guess one last little deal this was my pattern there are other patterns here like if I were in a company making software directly for sale to Consumers like service now I would make it there's one hop between me and the money we've got our our product Dev that that makes the product and then it's sold and you buy it from us it could be like if I'm here in supply chain it I've got three hops I got supply chain it I've got supply chain F the the business function and then I've got the manufacturing your versions of this might have uh classes it might have medical services whatever here is that's where the money comes in and the products and services go out your model will be different than mine but I hope you can see how this technique helps you better understand your your business I print this out I put it on my wall when I'm making business cases I'm constantly thinking what do each of those players at each of these hops think it's gotten me a lot more success hopefully it will for you too any quick questions before we turn over to proven Optics nothing in the right now Charles but uh yeah if you can monitor the chat for a little bit and see if any pop up that'd be great we'll do definely got my head spinning so Kyle are you taking over or Ed yeah um I have a couple slides here John and thanks for going through that Charles we'll um I'll start my share here and I imagine Ed will Ed are you on as well I am and uh John and team thank you for having us and look forward to the discussion to talk about you know managing the financials and the costs around digital products so looking forward to the conversation so thank you all right great so um I'll kick us off here John quick time check um about 15 minutes I believe to get through you got the whole rest of the time Kyle really um oh yep so all right as much as you need and then we could open up for questions there's definitely some good discussion around this that we should be able to have absolutely so um you know first and foremost thanks everybody for for giving us the opportunity to to present in front of you um as John and Charles both mentioned um I am with proven Optics my name is Kyle hollitz I lead our solution Consulting team here um as far as what I had planned and discussing with everybody today this isn't meant to be salesy it's not meant to be a product pitch right it's really about how do we enhance that digital product planning costing and explicit pricing examples that John and Charles have went through so far with a flexible taxonomy built on the service now platform right being that digital products can exhibit a lot of different characteristics the way I think of them is is they're groupings of unlike things right Hardware software services and then they're consumed across the business and I think Charles did a really good job explaining kind of where that money lies and where we talked about cash moving horizontally I'm going to do my best to talk about how with impr proven Optics cash kind of moves vertically in a sense throughout a through a cost model and we'll discuss some of those things um so as far as the agenda you can see it on the screen here I don't want to read them one by one but um I like to keep these very fluid very conversational so if there's any questions at all please feel free to to stop me and um ask away so where we're going to start out is within that digital product sort of financial planning process Charles you talked about funding I'm going to call that budgeting and planning for today um once we receive our funding that's going to fund the initiative the digital product that we're going after we have to budget for that 5-year period we have to figure out how we're going to plan not only for the costs that are coming in in both a direct and indirect concept but also who's going to consume my product right that plan consumption can be very important and then it's a measuring stick when we understand once those fiscal periods actually hit where people are consuming my product at whatever sort of unit type that may be it could be a license could be a transaction right there's a lot of different ways that product can open ultimately be consumed but we want to be able to clearly measure you know how close to the mark were we based on that capacity that we ultimately plan so that's on the far left here um intentionally um the next step after planning is of course costing how much does it really cost to provide my digital product and this is I think where we hear a lot from clients around data right we don't have the data that we need to do this we and one of the things that I want to discuss today once we hit the the model taxonomy is that's where that flexibility comes into place because we want to be able to have digital products are meant to evolve right Charles you mentioned these are things that are going to be in your ecosystem for five 10 years over a life cycle not necessarily a start and end date like a project and having a flexible taxonomy that allows me to evolve my product see where there's inefficiencies within that quote unquote overhead realm where can I improve that product's operating um sort of efficiencies whether be you know moving away from on premise capabilities to Cloud capabilities to provide my product and how do we visually you know see those things and then create a plan of attack to to you know improve the efficiency of that product and then lastly on the far right once we plan once we figure out what it actually costs us now we need to set our rates what is That explicit pricing that we want to justify to our consumers of those digital products so um that's another measuring stick right we might have a budgeted unit cost that we see we were way off of when our actuals start coming in so that explicit pricing is is critical and having these three pieces kind of work together is is very important as we kind of think of this in in a process perspective um because our customers want defensible and transparent pricing right they want to know and understand what they're you know uh paying for and um they might not care about all the pieces that go into that product right they just know that they're consuming um a a particular product John I think you used the citation U example in in an earlier session right that's all the customer knows they don't know that there's Amazon ec2 servers and applications under the hood of that whatever it may be so um we can see an example of that here and I kind of wanted to use this as an overview that will Now guide us through the the proceeding slides um but I want to pause and see if there's any questions John any points you'd like to make Charles or or even Ed yeah I like the um a lot of people think we're moving away from service management when we do product management and um I hopefully that definition Charles put up in the beginning calls that out a little bit because you have like service TCO um right we could start with service TCO and the you know so I love how it all comes together and a service could be a product right or an application could be a product so that so you know that's the way everybody's thinking I think the slide speaks to that really well too and and I think it's all about to your point earlier John we spoke earlier it's it's a tagging mechanism what sort of metadata do we want to put against those pieces it could be Hardware it could be server utilization it could be an application license it could be a true business service and all of those things are tagged with a digital product line then we get the reporting that we ultimately want out of it and the Lego bricks if you will of what makes up that digital product yep and and that all the levels I think work really well because you're not talking about hey because I'm Doing Network delivery how do I account for the electricity in the data center well if you're consuming those subproducts you don't really have to count for those right it's it's wrapped in another product so I'm not actually paying for electricity but I'm paying for a product that is using electricity so so I got a quick preview of what Mark bodman is going to be talking about for uh our next session on the nth and and that session's going to focus on like Enterprise architecture and how it fits into product management one of the slides in there he he has talks to some of the the questions that are going on in the chat where there's multiple types of products that play across the service now uh platform so like most fundamentally what what most of you probably know are the asset management products or hardware and software products that have makes and models and versions that's one form of product then there's the digital product that we're talking here which are those apps and service that that you're um building and delivering to to the consumers of those apps and services and then there's the products that your company makes or products and services I'll say that your company makes for external consumption and those might also be digital products so there's multiple definitions of the word product here we're talking the middle one most explicitly in this because we're talking like your financial processes and stuff inside your company um the rest of that the other definitions they're related Concepts there's definitely some overlap and that's part of what folks are trying to straighten out um in the various standards forums and such so I think Mark he's commenting a little bit there in the chat right now um he'll talk a little bit more about that next week too so so just keep in mind for for this one put your blinders on we're talking your digital products and services that that you're you're delivering within your company or organization at least that's sort of the main focus right back to you yeah they know great points I I appreciate it um so where we're going to start out is on that far left Chevron in the budget and planning area so again keeping this focused on outputs or outcome as opposed to you know being product or application focused in this case what I wanted to talk about here was really around planning for digital products and how it aligned to the five core personas of digital product delivery that product manager the aison architect developer within this sort of data flow right they all have a piece of the puzzle um and you can almost imagine where those people might come into this process so when we're thinking about those digital products they're not singular now some may be singular so if I'm a a product manager or an architect who needs to understand what the costs are I need to know what pieces make up um what I'm budgeting for people's time licenses infrastructure costs many products might have all of those components others may be more singular in a sense so having a way to necessarily group all of those pieces together and their explicit costs is really kind of what we're looking at here when we think about drafting those budget lines and the subcomponents that are a part of that digital product now as we move further to the right this is where we really start to bring in actual costs so as we're planning for those digital products and customers do this a lot of different ways that we've seen um as far as how do I match actual expense to my budgeted plan for for that particular product so I can understand not only you know where are we burning too fast where are we burning too slow how often how is that consumption of my product ultimately um affecting spend for that actual verse budget sort of comparison um this is an interesting concept to me um because one of the things that that we're finding at proven Optics is especially in our Amia market and Charles you stated it earlier is when customers are budgeting they take a very product Centric mindset so we're seeing this a lot in in Amia where it's so what we call service-based budgeting right which is very similar to Pro digital product based budgeting where I'm not budgeting for a cost center necessarily I'm not budgeting for an application necessarily I'm budgeting for the service that I own as that service that product manager service owner Persona and all of the pieces that are associated to that whether it be direct costs that I can control like people that work for me to provide that product or service or things that are indirect to me like the infrastructure that supports my service or product um so I wanted to hit on that and kind of bring up that relationship as well that I kind of found interesting as we've learned if as I've learned more about the digital product taxonomy couple examples here that we wanted to go through now just simply showing some of those variance items um once once we've defined what the pieces of that budget of that plan are for the various products they're delivering something right could be a service this could very likely also just be a product um as expenses are coming in ideally they're tagged in one way shape or form based on vendor cost center a PO number a doc ID there's a lot of different ways to do it and ultimately that allows us as a product manager um or product owner to understand what is that actual span what is the variance that's going against my products you can see that over here on the far right and that's really where we can start to understand how consumption might change that actual variance and also where we might have inefficiencies as those various expenses are tagged where are they coming from I'll pause here and see if there's any questions from the last two slides some of this will be brought up I think in the discussion next week too on I it for it where a lot of this budgeting is done at the right portfolio planning level the evaluate value stream they call it perfect so now moving in so we kind of talked about that first Chevron on the far left the budgeting and planning in a short example there and kind of the data flow that it generally goes through now we're into the middle piece kind of a actually the middle and the far right from an explicit pricing standpoint and that's what modeling provides right so what you're seeing on my screen now is is an example model now don't think this is what we call a TBM taxonomy it's it's welln know across the industry um but this isn't necessarily something that you have to follow unless of course there's Regulatory Compliance um reasons that you must right and this is in the beginning where I talked about Evolution and flexibility become so critical right and when we think about this model it's meant to fit you it's meant to fit a digital product owner for their purposes there's two types of information that come into this model and this is where service now becomes so critic critical to modeling because service now should be that it operational source of Truth it should be the operational source of Truth for your digital products and the pieces that go into it so why not have run your costing practices within that same area right keeps your data cleaner you don't have source of truth questions and things like that and at the end of the day you have um more trustworthy information so that's where you see on the far left as we work to the right you have service now data as a data source when we think about Services apps um Hardware that might be tagged with a digital product generally there's a a mapping as well so if I think about groupings of CIS or service mappings within the csdm or or um your cmdb that can all be inherited into a cost model so there's relationships that are inherently built as we move up and dollars move up vertically through that cost model but also I I like Charles your example of of hops to cash and I think that this is can be very similar in a sense because depending at the level that my digital product lives it could be the very top right a business service product it could be an app it could even be Hardware down here in the technology device that allocation to a customer of where is that digital product consumed is supported by the model here so as an example if we're providing Hardware big data storage servic as a digital product those objects might live down here in technology devices and there're hopping all the way up pass these segments to be consumed by clients and their costs are everything below them so Charles very very similar to the to the example that you had in a sense we're just kind of flipping the model vertically in this case um additionally right what are the outcomes of this um it's really all about cost visibility what is that measuring stick what's that Benchmark how close was I really um to my plan right when we think about a planned unit cost to not only to deliver the product but what's my capacity right um anytime we can define a capacity of how many digital products we can offer the cost model is going to tell us how close were we to that capacity and if I'm a digital product owner right that Delta between the capacity that I can deliver and what the business is consuming is an area for improvement as I map dollars to my model or to my digital product we'll say it's up here in the business service level we can also start to understand inefficiencies so Charles to your poter earlier um that overhead area right is I look at that really pretty much everything below business applications and down those are areas where we have the opportunity to cut costs whether it be infrastructure dollars whether it be consultancy spend that's linked to a digital product the model in the taxonomy here is meant to support those decisions and improve that visibility um additionally customers always ask us you know when we're talking about cost modeling we don't have all the data maybe we don't have all the data or we don't have it all in service now and that's where this is meant to be flexible and it's meant to be evolutionary right maybe we don't have all of the pieces that make up our digital product immediately that's okay right maybe we start with licensing and labor and some of those areas because we don't have great infrastructure data the model is meant to be you know use as many segments as you want it's meant to be very flexible in a sense and also help Foster Evolution right we think about what are gaps that we may have with within that particular taxonomy we have immediate areas for improvement um that can be supported by a flexible and and sort of evolutionary fostering model here any questions around the support of um digital products within the cost model within a cost model I think that gets a little bit to uh we had some questions on on you know the cost of internal Technical Services hopefully this anwers some of that on here I absolutely I think there was some answers going on in the chat on the same thing you were talking about on here which is really good yeah and if there's I I apologize I'm not watching the chat but if there's any in there John that I can answer um feel free to read them or if anybody wants to come off mute and ask those questions hey Kyle this is it I just wanted to jump in John I and Charles were talking John do we want to talk about as the cost is built out for these Digital Services and then doing cost recovery uh as those Digital Services get delivered or maybe table that for another session um the charge back and show back is well yeah yeah I don't know um I think for the context of this one that the charge back is the big thing like how much we're charging people for things because that's the idea is that everything's bubbling up to that top level model like products have products contained in in them right and the containment of those products and sub products even the service now platform is a product um that is kind of what determines the so it's mostly the chargeback I think for this one is the uh if anybody else wants you know hear more about it um anybody else disagrees let me know but yeah and and I can hit on that quickly I mean one of the outputs of the model or any sort of built model based on the data that you're putting into it should be some level of unit costing a unit could be anything how you how does your digital product get consumed is it a transaction is it an event is it a license is it you know hard Goods even that are produced that have software you know that are a part of producing them that unit cost is many times and you can see that as an output over here that should be an automated output of that model right I want to understand I transacted a thousand of these things this month it cost me a million dollars and X is is my unit cost for that you know sort of P times Q rationale the chargeback concept then really is just well are we trying to break even are we trying to be at 5% are we trying to be at you know that golden zero at the end of the year if we're just trying to cover our costs um from from an IT perspective so it really um is those two t things put together and I also have a slide here in a little bit that kind of shows a side by-side comparison of okay I understand my average unit cost coming from my cost model depending on where I want to land as an organization then my service rate should be you know 3% uplift or the exact same and a lot of that comes into Charles where you explain sort of the life cycle management of a digital product that in my mind should be bullet points they should be areas that we're focusing on and sort of right sizing those product offerings to make sure if our costs are going up or going down to deliver my product well my explicit pricing and rate that I'm charging from a chargeback perspective should be as well but it should also be defensible and transparent as to why yeah so kind of tying this in into my part of this like when I'm first starting to sketch out here's this needed product and and we're starting to build that case to to go to the company for for investment part of what you need is your cost model like here's where we're anticipating costs to be born and again it's over the full life cycle and so starting with a model like this makes that drastically easier iier than if your organization doesn't have a cost modeling taxonomy this Al this forces you to go in and ask all the right questions and figure out which of these boxes Your Parts play in it helps keep you honest for for estimating the cost and then what you try and balance that with in your business case would be here's our benefit statements here here's the the value delivery that by experiencing all this cost you're doing it in the hope of getting this value um to whoever the consumers of your digital product are right yeah and I I always think back to the personas that that you guys covered as well and if I think about you know what does this model do it also brings people together it helps us speak a Common Language across all of those personas in in a business friendly fashion exactly I have a question oh yes please yeah going back at that slide that is that is so high level that you if the itsm or APM or itom or any of these areas in service now my takea away from this slide is that the unit costing and all those parts that are dollars are some object in service now so for example in service now you have models whether Hardware or software and it has cost and models can publish or catalog items we publish from models and those catalog items you present via employees Center and they have price and or price and recurring price and then you have the purchasing model and Service uh the P you know the U purchasing suite and service now where you could do your POS and again all costing and then if you bring in general ledger all costing so the question is with this slide right this Slide the underpinning is assuming that the way service now is been designed and all those objects matter what suite you're using that has cost or Price information and in this previous slide that you showed earlier where you showing or presenting those costs in the dashboard that's the expectation here right you're taking those objects that have price cost or whatever and you're rolling that up in your digital productservice pipeline or is there something other store app or from proven Optics p pie that is being used by service now that includes all that as a kind of a module plugin that's going to roll all that up say for example to that other dashboard you were showing I'm confused uh yeah apologies for the confusion I can try and my best to lighten that um so in this case you did call it out so proven Optics is a store application so this is packaged functionality that can live on your service now instance no different than APM SPM itsm whatever it is right now there is not an assumption from proven Optics you own these things right we and you said it um as well right we we're bringing in the truest form of financial data in this case from a best practice standpoint from that general ledger from that fixed asset Ledger from your procurement systems all of those areas right and we're rolling those costs up through objects within the model that are informed by service now data right so when you look at each of these buckets Technical Services devices business applications in a Utopia sort of State all of the in service now now we know that that's not always the case we might need to ingest external data um into the model from something like um a plan view PPM solution because we're not using service now PPM as an example so the costs at the bottom to your point are absolutely meant to be rolled up and related to one another and ultimately at the that business service application and consumer level we see all of the pieces put together so service now is meant to inform or our cost model within proven opics is meant to drive and inform relation relationships between objects but at the top we're understanding total cost of ownership unit-based costing based on those relationships and allocations that are going up to a business or a business unit or customer John I don't know if you have anything there as well or hopefully that answers a question yeah I think we're talking about about multiple sides right is that where we're talking about hey I'm a product manager and I want to see how much it costs my my unit costs for delivering my product so I'm going to go get all these costs then divide it by how many I expect to deliver and then there's the charging side right where I'm take in taking money in from that whatever form that is whether it's an internal charge back or a you know actually charging a customer where you're collecting a payment so there's kind of those all those different angles that you kind of kind of consider so what angle are you talking about l you talking about I'm a product manager I want to see how much it costs to to sell these on a unit basis or no my apologies to all on the call because that was the best answer of the day so far thank you yeah yeah definitely the the rollup of all the data coming from all those places that's hard to do is get that combined stuff so cool all right the other thing I wanted to mention I put a link to it in the chat the offering that is defined when when defining a service in also captures cost what's the unit what's the cost what's what is the so there's already a mechanism to capture this information within the platform that I find many organizations don't do and I think that is not that is the best practice is to capture that data at each service offering level so that I the link there will teach you how to do that thanks Mark okay thanks all right so I'll speed through this one this slide is really then just meant to lose your Point earlier break down the big buckets of highlevel information right so we think about what's included in each of these pieces and I'm going to speed through this right this is meant to be defined by you and it's meant to fit the digital product relationships that you want to drive up through the model and ultimately see costs represented in right all the way down to the bottom where we're going to start to see things like um appd app support time from the developers that are linked to my digital product or or groups like that or Consultants that may be even a part of the puzzle um lastly that I wanted to point out and we I want to leave a few minutes for questions here at the end um is how this leverages the data model within service now right we are meant to inherit that data model we come out of the box with a taxonomy and a best practice in a very prescriptive fashion and a proven method to of course understand um total cost of ownership understand unit costs and drive that charge back that P * Q rationale that's going out to the consumption of of my digital product but keep in mind this is meant to be defined by customers so whether you're using csdm or a particular data model or haven't quite got there yet the model is meant to be flexible enough to meet our client you know meet you at the point of data maturity that you are lastly um this is one of the slides that I talked about earlier understanding that unit cost against our service rate so in the sense of a chargeback invoicing program we can see you know various cost drivers these are our services these are our digital products how are they being consumed head count license user allocated a gigabyte that's ultimately meant to be defined by the digital product being consumed in that product manager and then of course who's consuming it this is an agency a business unit a um it could even be an external company right um and then we're of course driving that invoice as you can see here the rates are of course going to be rate times unit is going to be what you're going to find under that invoice in this case um and on the right as a part of that life cycle management as we're right sizing our offerings as we're understanding what we want to charge in That explicit pricing sort of example and the definition that Charles gave earlier we want to see those things side by side right because as a part of that meeting as a part of those those U quarterly yearly planning sessions we want to understand that average unit cost when did it flux during the year and what should drive my service rate hey yeah couple questions is this um list view part of your solution it is is yep I'm I'm trying my best not to to call out our applications and kind of focus on the outcomes um and what and driving kind of the digital product methodology here but yes this is is a part of um this is more of the atomic level ATA I would say than it is like the reporting that's the output of of these items but this is absolutely a a you know automated output of our product yes no no no problem I just wanted to make sure I didn't missed something that was like hidden in the platform that I I had I was like okay I've been there for a while okay and then the other thing and we haven't really addressed this and maybe Mark will address it in his piece we have this list the breakdown of capex Opex oops sorry was ficient for the mute button there um you absolutely could see those items under the hood for each of these things I this is more of a I would say a summarization of a line but if we were to look at that total amount right that's being driven or rolled up in this case to our business application you would see a number of cost drivers underneath it the pieces that make up that product offering basically and some of them may be defined as there could be project dollars going towards it that are defined as capex versus labor which maybe you know keep the lights on Opex expenses okay great thank you I appreciate there's one more question on the chat that I think's uh relevant to get asked answered quickly does the TBM model mapping to C SDM come from your company or where does that come from the TBM taxonomy the TBM to uh csdm mapping slide that you had I think that that was something that we put together with John and service now I don't know if it was exactly John but I know it was something that we put together with service now a while back I think that even screenshot to be honest I'm not a csdm expert but I think it's even a little older it's one of the older csdm versions it's really just meant to show conceptually that look if you're following following this data model this csdm practice there's a natural sort of flow and a natural architecture that can easily be inherited into a cost model whether that cost model taxonomy is TBM or not right we have as proven Optics right TBM is kind of the industry standard out there we did not come up with that I'll be very honest um we have our own um we have our own cost model taxonomy as well that a lot of our non-federal customers actually find a lot more value and little simpler a little more efficient I think Mark did that model um last year the map TBM over to cstm yeah y that that one's a couple years old actually but uh yeah and it needs to be revised there's csdm involved and we also are it's not all completely product Centric yet so that's that's really what we're going to be working over the next year to kind of simplify that model and bring it home to product centricity wa Mark maybe we can uh link up this is this is Al praska that was my that was my question so that TBM comes from the industry or that's just sort of tribal knowledge of you know this is the way TBM looked to you guys Kyle when you were making up this diagram nope TBM is a industry standard that does not come from us that TBM taxonomy there is a an industry standard um that's out there yeah and let's let's be you know incredibly crystal clear though it it it's a standard based on ap's product today correct okay so it is Adam it is it is based on Adam and and they and they basically rule the roost in terms of TBM they do not let others play and and evolve that that is something that the IBM acquisition may change in the future uh but today think of that is the TBM atum model from apto specifically cool we work with Adam so I just wanted to make sure that they were that it was the same Source um and Mark that's the closest I've ever heard you sounding unhappy about something uh yeah I I'm all for Open Standards folks you know so um I I just know that that TBM currently is not not not all the players in the industry can actually help and influence and mod and evolve that standard today yeah it's it's quite strict from what we've heard from a lot of folks as well and can be hard to adopt to um and that's one of the benefits and big differentiators that we find working within the service now platform is just the general flexibility thanks yeah thanks for the questions all right awesome stuff today guys lots to talk about in this area so that's a good start right Charles Kyle Ed thank you very much and thanks everybody we got a lot bye everybody thank you