[++] TBMA Challenge: Assess impact of wrong allocation strategy

Document created by cdavidson@apptio.com Employee on Sep 19, 2017Last modified by mbeasley@apptio.com on Jan 16, 2019
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TBMA challenges are designed to help sharpen your TBM and Apptio skills. See title for rating: [+] Easy   [++] Moderate   [+++] Challenging


OK TBMAs who never back down from a challenge. You know how you are  We've got a scenario. If you've got the right answer, we'll update your profile with the Apptio U Star award  (worth 30 points!)


We'll follow up Oct 4 with the answer and badge winners. Make sure to get in the game before then by reviewing Premier CSM Christopher Davidson's scenario below and clicking the button to submit your answer.



In my cost transparency project's Cost model, this month I'm allocating $200,000 from IT Resource Towers object (where IT Resource Tower Name = "Data Centers") to Data Centers object.


I have 8 data centers.

Originally I was just evenly spreading the money: $200,000 / 8 = $25,000 per data center (DC).


Then I read Jenny's post and realized there were better ways to estimate per-DC costs.

Data centers are full of tracked metrics: square footage, occupied volume, rackmount units (RU), power, cooling, and more.


I'm torn between a space-based and a power-based allocation weighting strategy.

I could go with square footage. Or power consumption. Or a hybrid of both. Or something entirely different.

I could instead set up multiple allocations to accommodate different incoming cost types.


My total monthly tracked IT cost is $4,000,000 by the way.


Before I choose a weighting strategy for the $200,000/mo DC cost, my more pressing issue is:


What is the impact of choosing incorrectly?


More specifically: How can I calculate worst-case scenario effects (if my weighting strategy is absolutely the opposite of reality) or sample average error effects (if my weighting strategy is perhaps close to but not 100% reflective of reality)?

I need to be able to show my manager quantitative evidence of why I should or should not spend 2-4 hours researching and improving this specific model allocation.

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