Budgeting Core 1.0.0 | Targetprocess - Enterprise Agility Solution

Budgeting Core 1.0.0

Note: The solution requires additional manual configuration, check the Solution Configuration section for the details. Solution Overview There are the following phases of a budgeting process, which are covered by Budgeting solution in Apptio Targetprocess: Budget Target - describes the company's initial

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Note: The solution requires additional manual configuration, check the Solution Configuration section for the details.

Solution Overview

There are the following phases of a budgeting process, which are covered by Budgeting solution in Apptio Targetprocess:

  • Budget Target - describes the company's initial idea of distributing funds across Portfolios and defining guardrails (Run vs Grow, CapEx vs OpEx).
  • Budget Proposal - describes budgets proposed by Project Managers or Portfolio Epic Owners based on the funds needed to implement Projects or Portfolio Epics.
  • Budget Approval - comparing the numbers in a Budget Target and Budget Proposal reflects the final decision on the investment into each Portfolio.
  • Actuals - shares information about labor and non-labor expenses related to a Portfolio and Portfolio Epics.

Budgeting solution allows you to fund People (Value Streams, Solution Trains, Agile Release Trains or Teams), Products or Work (Portfolio Epics (Projects)), calculate Proposed Budget and/or see Actual Costs and Expenses for any of them.

Note: The mentioned on the diagram entities should be non-global for the solution to work. If you already use Product, Value Stream, Solution Train or Agile Release Train, which are global, please contact us for further assistance.

Solution Flow

During the solution installation you'll need to decide which entities you'd like to do Budgeting for: People (Value Streams, Solution Trains, Agile Release Trains and/or Teams)Work (Portfolio Epics, i.e. Projects), or/and Products (Products), as well as what levels of People, Work or Products you'd like to track Proposed Budget and Actuals. The solution supports any combination of them. 

For example, you can fund Value Streams from Portfolio and able see the Proposed Budget and Actuals for the other (Work or Product) hierarchies.

Or you can fund Portfolio Epics from Portfolio and see the Proposed Budget and Actuals for the other (People or Product) hierarchies.

Also you can fund Products from Portfolio and see the Proposed Budget and Actuals for the other (People or Work) hierarchies.

You'll see Budgeting: Structure folder in the left menu. By default, the solution will generate Budgets only for the current Year. In case you'd like to generate Budgets for more Years, simply click Generate Budgets on the Budget Generation view.

Note 1: If you need to generate Budgets for many entities and many Years, please uninstall Budgeting: Metrics solution, generate Budgets and then install it again to speed up the calculations.

Note 2: Do not click "Generate Budgets" simultaneously for two or more years. Please wait until budgets are generated for one selected year and then click "Generate Budgets" for the following year.

Note 3: When somebody creates a new entity (Portfolio, Portfolio Epic, Product, etc.), Budgets will be created automatically for the current year and future years for which Budgets have already been generated.

Note 4: The levels you'd like to enable the Budgeting solution are configurable. Please contact us if you'd like to implement it for different work entity types.

Note 5: If you don't see Budgets on the views, please make sure Budgeting Portfolio is selected in the filters:

Solution Flow

When the solution is installed you can go through the Budgeting flow. Here is an example of Funding Portfolio Epics (Projects) flow. You can see more examples in Budgeting: 'Entity Type' Funding Views components of the solution.

Step 1: Set Budget Targets

Budget Target describes the company's initial idea of distributing funds across Portfolios and further between Portfolio Epics. It's done based on the company vision and strategy for the following year's top-down. It answers the following questions:

  • How much do we plan to invest in each Portfolio?
  • How will this be distributed across Portfolio Epics?

Portfolio Owners usually perform budget targeting. Their main goal is to split the Target Budget across different Portfolios, define guardrails, and set what percentage of capitalization should be headed to, as well as the grow and run targets.

Portfolio Owners will handle planning on the Budget Targets dashboard, where you enter a Target Budget for a Portfolio and then for each Portfolio Epic.

Target CapEx and Opex (Percentage) define desired capitalizable and non-capitalizable expenses. Target Grow and Run (Percentage) – desired Run vs Grow expenses percentage on a Portfolio and each Portfolio Epic (Project). 

Target Budget In Scope for Portfolio is a sum of Portfolio Epic (Project) Target Budgets. It's used to see if we distributed the total Portfolio Budgets properly and didn't over or under-plan it. It will be highlighted in red if the sum of Portfolio Epic Target Budgets will be more than a Portfolio Target Budget, meaning we have planned to distribute more funds than available.

You can also enter the numbers on a Portfolio Annual Budget detailed view -> Budgeting tab:

Portfolio Epic Owners will see and can update the information about Target Budget of a specific Portfolio Epic on a Portfolio Epic Annual Budget view.

Step 2: Budget Proposal

Budget Proposal is provided by Portfolio Epic Owners or Project Managers and includes information on how much funds are needed to implement a Portfolio Epic in the upcoming Year.

 It answers the following questions:

  • What resources are needed to implement a Portfolio Epic?
  • What are the forecasted funds for Labor Costs and necessary Non-Labor Expenses?

There can be different ways of calculating a Proposed Budget for a Portfolio Epic: based on User and Team Work AllocationHeadcountPortfolio Epic estimates, or other parameters (using additional solutions), or manually entered in this solution if the numbers come from another system or are approximately guessed by Portfolio Epic Owners.

The Proposed Budget consists of a Proposed Labor Budget and a Proposed Non-Labor Budget (defines expected non-labor expenses, such as SoftwareHardware, etc.).

Budget Proposal - Labor

The Proposed Labor Budget usually reflects how much money is needed for labor expenses. Here you can use one of the following solutions:

  • Proposed Budget based on Work Allocations (b82de5e7-4b6e-48b0-aa7c-c533d423711a), where Project Managers would create User, Team and/or ARTs Work Allocations, defining the needed people for a project, desired period and percentage.
  • Proposed Budget based on Headcount (22c6f9f4-9d5e-49d3-b9cc-c3bc025d245b), where Project Managers would define the needed annual Headcount (number of people of required Job Profiles and Locations)and Forecasted Cost will be calculated based on Blended Rates.

Calculated Costs will be distributed across Portfolio Epic Monthly Budgets and roll up to Quarterly and Annual Budgets. Thus, we'll see the Proposed Labor Budget on a Portfolio Epic Annual Budget.

Budget Proposal - Non-Labor

The Proposed Non Labor Budget will be formed based on the Expenses Proposed amount. First, you'll create the estimated Non-Labor Expenses, defining the needed amount. The Expenses will be connected to the respective MonthQuarter and Year and be shown as a total Annual Proposed Non-Labor Budget.

Step 3: Budget Approval

Comparing Target Budget and Proposed Budget for each Portfolio on a Budget Approval dashboard, Portfolio Owners decide if they will go with the initial Target Budget or increase/decrease and distribute it differently across Portfolios. 

Further, the budget is distributed across Portfolio Epics. In the Approved Labor Delta and Approved Non-Labor Delta fields, you can see the difference between a budget approved for the Portfolio and the total budget approved for Portfolio Epics in the Portfolio so that you know you approved the correct total budget across Portfolio Epics.

There can be a situation where a Portfolio Epics Proposed Budget is much higher than a Portfolio Target BudgetPortfolio Owner needs to decide whether we will go with the suggested scope and increase a Portfolio Budget or decrease the scope by removing some Portfolio Epics.

On the same dashboard, you can also check whether Target Portfolio Guardrails match the planned Portfolio Epics CapEx/OpEx and Run/Grow parameters.

Step 4: Actuals

Costs represent Labor Costs. They can be calculated based on spent Hours and people rates, imported from a different financial system or entered manually. The Costs will be split into CapEx/OpEx, and Run/Grow to see aggregated by each category for a Portfolio Epic and a Portfolio.

Expenses represent Non-Labor Expenses. You'll enter Actuals, which will also be split by the above categories.

The total Actuals will be aggregated for each Portfolio Epic and a Portfolio by Month, Quarter, and Year and can be viewed on the Actuals dashboard. Here you can focus on a specific YearPortfolio or select a Portfolio Epic to focus on the details.

Solution Configuration

Limited Access Portfolio

The solution requires to store the data in the limited access Portfolio (Project), so that the information is only available for individuals who needs to see this data. All the Budgets, Costs, and Expenses will be kept in this project by default. By assigning people to this project, you will provide access to the budgeting details. People who don't have access to the Budgeting Portfolio (Project) won't see anything on the Budgeting tab at Portfolio or Portfolio Epic views.  To do that: 

  • Create a new Portfolio (Project) 
  • Name it Budgeting
  • Copy the ID of this Portfolio, as it'll be required during the solution installation

Configure Portfolio Budget Type

There is a metric on Portfolio Budgets that defines which vertical (WorkPeople, or Products) you'll be FUNDING (budgeting). By default, it is Work (Portfolio Epic). If you fund People or Products, the value in the metric needs to be updated respectively. To do that:

  • Go to Settings -> Metrics
  • Replace the value based on chosen funding vertical (WorkPeople, or Product) for the Portfolio Budget Type in the following metric:
    • Portfolio Budget Type for Budgets
  • Save the metric.

Note: if you fund Portfolio Epics, click Recalculate to set "Work" as Portfolio Budget Type for all existing budgets.

Integrations

See how Targetprocess aligns and empowers business and IT with the help of powerful integrations.

Targetprocess facilitates enterprise agility at all levels by enabling both Business and IT to work in one holistic solution. To help ensure value flow visibility and collaboration across the entire enterprise, Targetprocess allows a powerful set of integrations covering use cases for different levels and roles within organization.

For Transparency above the Team Level 
 
EXPAND 2 INTEGRATIONS

Azure DevOps
Azure DevOps
Add Targetprocess on top of the team level tool: get visibility on Product and Portfolio level.
Atlassian Jira Software
Atlassian Jira Software
Ensure free data flow from Jira to Targetprocess for greater visibility for all team members.

For Continuous Integration and Continuous Delivery 
 
EXPAND 6 INTEGRATIONS

Azure DevOps
Azure DevOps
Automatically associate branches and pull requests with Targetprocess entities
GitLab
GitLab
Automatically link branches and merge requests to Targetprocess entities.
GitHub
GitHub
Automatically associate branches and pull requests with Targetprocess entities.
Phabricator
Phabricator
Link code revisions with any Targetprocess entity.
Bitbucket
Bitbucket
Automatically associate branches and pull requests with Targetprocess entities.
Jenkins
Jenkins
Connect Targetprocess entities with work items, reflect issues back as Bugs or User Stories.

For Product Management, ITSM, Sales and Marketing to Stay on the Same Page 
 
EXPAND 5 INTEGRATIONS

Miro
Miro
Centralize unstructured communication on Miro’s online whiteboard inside Targetprocess.
Microsoft Project Server
Microsoft Project Server
Provide visibility into high-level goals and details about implementation for all teams.
Salesforce
Salesforce
Synchronize customer service, sales, the PM office, and development teams.
Zendesk
Zendesk
Allow all team members to collaborate on shared artifacts from customer service tickets.
ServiceNow
ServiceNow
Collaborate on shared work items, consolidate reporting across the entire organization.