Technology Business Management (TBM)

Definition - What is Technology Business Management (TBM)?

Technology Business Management (TBM)is an IT management framework that implements a standard IT spend taxonomy. TBM enables organizations to disaggregate IT spending into smaller, consistent categories to provide CIOs and other C-suite executives with a more accurate and detailed understanding of their organization’s IT costs. This allows CIOs to identify duplicative or unnecessary spending and to make better informed decisions regarding future investments.

Principles of Technology Business Management (TBM)

According to the TBM Council, the 10 core principles of TBM includes:

• Position for value: Define what IT offers and how the department is valued throughout the organization.
• Continuous improvement: Build a roadmap for TBM maturity by embracing TBM into the day-to-day business and ensuring TBM is at the forefront of every value conversation.
• Create transparency: Help define IT’s value by translating “spending, consumption and capacity into meaningful perspectives for technology and business decision-makers.”
• Shape business demand: Highlight cost and consumption trends across business units to inform future budgets and decisions.
• Deliver value for money: Offer valuable and cost-effective services and products.
• Plan and govern: Collaborate and align business units’ budgets with IT so all technology needs are met.
• Cost for performance: Offer innovative technology and services while maintaining an eye on the bottom line.
• Business-aligned portfolio: Build a portfolio that demonstrates how much value is offered by a service, product or processes compared to the level of spending.
• Investment in innovation: Assign resources to innovative projects throughout the organization.
• Enterprise agility: Respond quickly to opportunities and threats as they pop up in the industry.

TBM Roadmap to Maximize the value proposition of your IT

Technology Business Management (TBM) is the discipline that targets maximizing the value proposition of your IT. Making your expenses transparent will create the base for systematic optimisation. Maximized IT value propositions are possible by ‘managing IT like a business’ and are the foundations that a competitive edge is built on. Two essential principles describe the necessary TBM actions that optimise the value proposition of IT:

• Reducing ‘Run the Business’ costs to a sensible minimum
• Managing investments in ‘Grow the Business’ and ‘Change the Business’

source: Indi Tango

Impementing Technology Business Management (TBM)

The U.S. General Services Administration and the U.S. Department of Education teamed up to share lessons learned through the creation of the Technology Business Management (TBM) Playbook. The playbook, which supports progress towards the TBM Cross-Agency Priority Goal was built to assist federal agencies as they start TBM implementation. While each agency will tailor its TBM plan to their organization’s current state and desired outcomes, this is a great starting point based on real life experience from some of the Federal Government’s early adopters. Each play includes a plan of action or strategy used to move toward a goal or objective. The 7 plays in this book will improve your chances of beginning a successful TBM implementation. They include:

• Identify key players and stakeholders: An effective TBM program consists of business stakeholders, financial analysts, and IT and acquisition professionals. Together, this team drives change through collection, analysis, reporting, and informed review of IT data.
• Determine current state: To understand what the TBM journey will look like for your agency, it’s necessary to understand current data collection and aggregation methods, financial systems, business processes, and models your agency already has to support TBM. No matter your current state, TBM can bring value.
• Identify measurable desired outcome: Identify how your agency can deliver the right IT services for the best possible price as you work with stakeholders to identify priority areas to focus your TBM efforts.
• Start aligning data: Based on your agency’s current state and desired near term outcomes, it’s time to start working with financial data. Starting from the bottom up is recommended - aligning financial data to cost pools before moving to tower and service mapping.
• Look for insights" Now that you have started mapping your data, where does that data lead you? Focus on examining the data to see how it provides insights into issues or benefits around the identified outcomes.
• Rollout and adoption: Now that you have completed the first iteration of your TBM implementation, start integrating TBM principles, data, and value discussions into meetings and funding reviews.
• Keep maturing the TBM implementation: Assess your maturity and identify opportunities to maximize your TBM implementation.

See Also

IT Financial Management (ITFM)
IT Cost Allocation
IT Chargeback
IT Cost Optimization
Federal IT Acquisition Reform Act (FITARA)
Total Cost of Ownership (TCO)

Further Reading

• Technology Business Management: The Four Value Conversations CIOs Must Have With Their Businesses Todd Tucker
• 6 Steps to Implementing Technology Business Management at Your Agency TCG