MagicOrange optimises SPAR's cost management with Azure

Make informed decisions.

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MagicOrange, an IT financial management and FinOps software as a service company, empowers businesses to make more informed business decisions, which ultimately enhances profitability. MagicOrange is hosted on Azure and leverages Power BI. One of MagicOrange’s clients is major retailer SPAR South Africa. SPAR's immediate financial discrepancies are being addressed with four transformative models deployed on the MagicOrange platform: VPN actuals; VPN Current Recoveries; Azure Cloud Model; and a general ledger actuals vs budget model. These models will help SPAR achieve more comprehensive cost recovery and budgeting, leveraging detailed insights into SPAR’s expenditures.

Headquartered in the United Kingdom and operating in the US, UK, Australia and South Africa, MagicOrange has been empowering businesses with its cloud native IT financial management and FinOps software since 2015. The MagicOrange solution, hosted on Microsoft Azure, enables customers to gain a deeper understanding of their costs, which in turn informs their strategic business decisions.

MagicOrange has been a Microsoft independent software vendor (ISV) for years, building its solution on the Azure cloud and serving many of Microsoft’s customers. More recently, MagicOrange made its Prism solution transactable on the Azure Marketplace with the use of Microsoft Azure Consumption Credits (MACC). “We are able to scale up when we want and provide potential customers with more than one avenue to procure our service – that is a key differentiator for us,” says Janine Pickard-Green, FinOps Practice Lead at MagicOrange.

Microsoft and MagicOrange are members of the FinOps Foundation, with the commitment to ensure that customers obtain maximum value. The FinOps Framework has three stages: Inform, optimise and operate. MagicOrange helps clients gain visibility into their cloud bill, then optimise their coverage to operate more efficiently.

The MagicOrange team at their office in South Africa.

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“Having MagicOrange listed on the Azure Marketplace enables us to scale up when we want and provides potential customers with more than one avenue to procure our service – that is a key differentiator for us,” says Pickard-Green.

One of MagicOrange’s customers, major retailer SPAR, leverages MagicOrange to better understand its cost structure. “Like many customers, SPAR, with more than 2 500 stores, needed better control over its cloud costs. We realised SPAR had a coverage of 12%, whereas the FinOps framework recommends 30% reserved instance (RI) coverage,” shares Sandhya Maharaj, Customer Success Analyst at MagicOrange.

For SPAR as a group, it was essential to gain more visibility into its IT costs in order to optimise and manage them more effectively. “It's crucial to understand the granular detail because we deal with such complex and large volumes of financial data. We need to explain the costs in fine detail,” states Peter Moynihan, Specialist Consultant at SPAR South Africa. "This information is imperative at both the retail and group level to enable a deeper analysis and understanding of costs."

MagicOrange provides valuable insight into detailed costing per store that is facilitating informed decision-making to optimise cost and recovery models for both retailers and the group.

MagicOrange’s capabilities aligned with SPAR's principles: speed, simplicity, re-usability and clear cost categorisation, facilitating common business practices. “The support we received from MagicOrange during our digital transformation was absolutely critical,” states Moynihan. “I had a clear vision, but their team generated ideas and quickly delivered a proof of concept that we improved on together.”

To bring precision to SPAR's financial management practices, MagicOrange deployed the virtual private network (VPN) actuals and VPN recovery models. "These models will now help us to accurately track VPN costs per store," states Moynihan.

“Through this novel approach, we hope to optimise costs and increase process efficiencies.”

SPAR also needed a model to ensure that all cloud costs were being tracked and managed effectively. “MagicOrange has transformed our approach from purely tagging resources for technical purposes, to understanding the cost of every resource we use,” says Moynihan. “With the cloud tagging model, we are able to apportion costs appropriately across the group with confidence."

To take SPAR’s cost management strategy even further, MagicOrange introduced the general ledger actuals vs budget model. This model enables a monthly view of financial dynamics, spotlighting any inconsistencies and offering chances to investigate them. “At the beginning of SPAR's financial year, we input its budgets. On a monthly basis, we also input the actuals," Maharaj clarifies.

The model is visualised with Microsoft Power BI, transforming static financial records into a real-time, vibrant and interactive presentation of the data. In the hands of SPAR’s decision-makers, it has proved its worth. "The goal is to load SPAR’s ICT entire budget and actuals onto MagicOrange Prism and view the total cost of ownership for each application," Maharaj explains. The number of hours saved for the IT team as well as the speed and accuracy in understanding software costs and resource usage will enable SPAR South Africa’s staff to get their job done more effectively. The benefits are clear to Moynihan: “Hosted on Azure, MagicOrange Prism gives us the ability to make more informed business decisions, and ultimately, enhance profitability. That's most important in retail.”