Ever heard of technology business management? When digital transformation does not proceed smoothly, adopting TBM could be the answer…
In the past, companies built their IT cost models using Excel because they lacked better solutions. Today, there are technology business management (TBM) solutions that can provide CIOs with data-driven insights about their spending, and the value of their IT services, in support of attaining their business goals.
TBM is an industry framework designed to improve business outcomes by giving organizations visibility into their technology investments in order to parlay that information into business value. The framework defines the tools, processes, data, and people needed to manage the business of technology.
The Technology Business Management Council, a non-profit organization dedicated to advancing the discipline of TBM through education, standards, and collaboration between IT leaders and business partners, brings together more than 10,000 IT and finance leaders to define and implement what are current best practices for IT leaders.
DigiconAsia.net found out from Tarun Kumar Kalra, Regional Vice President, Apptio, a firm specializing in providing this automation framework, about the latest buzz around TBM.
DigiconAsia: How are technology business management solutions providing CIOs with data-driven insights about their spending, and the value of their IT services, in support of attaining their business goals?
Tarun Kumar Kalra (TKK): As organizations act with urgency to meet digital business ambitions, Information and communications technology (ICT) spend is accelerating. However, there is a widening performance gap between top IT organizations and the rest.
In top performing companies, technology leaders are involved in company-wide strategy. To participate in strategy, technology leaders need to be fiscally responsible; they therefore need to be armed with deep insights into their technology spend, which will enable them to make informed decisions and elevate them into participating in the company’s strategic planning.
TBM is a discipline that enhances business results by providing businesses with a systematic approach to transform technology spend into business value. It is supported by a defined taxonomy that maps technological assets and resources to business results. The framework connects IT, financial, and business management to acquire a clear picture of their corporation’s IT footprint. It also enables IT leaders to make quicker decisions, respond swiftly to changing business dynamics, and maximize the use of cloud and Agile approaches.
DigiconAsia: How did TBM help organizations tackle the pandemic in the last three years?
TKK: As an unprecedented situation, the COVID-19 pandemic accelerated digital transformation in all industries. since corporations were unable to anticipate substantial hurdles such as pandemic, they lacked of foresight, which made the digital transformation process more challenging. However, through the massive crisis, they learned that they need a robust and recoverable infrastructure, including tools, procedures, and people.
At this stage, TBM helps leaders identify where they may save money on cloud, recurring SaaS charges, mobile telco, and end user devices. TBM facilitates the implementation of consistent and reliable planning, budgeting, and forecasting processes, as well as benchmarking against peers for continuous improvement, and with the right approach, they can break even in as short as eight months.
DigiconAsia: What are some real-world TBM success stories and also near-misses in improving fiscal transparency and communication of corporate value?
TKK: Budgets today are constrained for additional investment. CXOs need to do more with their budgets, and they are being asked by their Board of Directors to redirect resources to fund digital acceleration.
TBM solutions automatically ingest and intelligently structure vast amounts of enterprise and technology-specific spend, as well as operational data, which enables users across all disciplines to report, analyze, plan, and govern their investments collaboratively, efficiently, and with confidence. It enhances efficiency and builds in greater transparency into their IT costs across all business units.
The benefits for CIOs and CFOs are the tangible, real-time insights into their IT spend. TBM helps them accelerate the identification, execution, and benefit realization of their cost optimization efforts. Recently, a pan-regional bank of size in Asia adopted the industry framework. The project helped them identify and cancel 1,200 unused or excess service numbers in the first 30 days. Additionally, the TBM implementation benefitted them with:
- 50% reduction in time to answer adhoc questions about costs
- 2% annual public cloud costs savings
- Insights reduced vendor invoice validation time from 14 to 6 days
- Established platform for continuous cost optimization
Another example is a multi-billion-dollar vertically integrated engineering group which wanted to digitalize their highly complex and manual IT chargeback process. The firm worked within the TBM framework via Apptio to analyze the existing business structure and chargeback rules set for 20,000 global employees, who work in 100 subsidiaries and associated companies spread across 24 countries.
As a result, the conglomerate’s existing systems were reconfigured to match how consumption of services, budgeted consumption, trend reporting and variance analysis would be managed in a digital sense, before overseeing the implementation of the digital system of chargeback management. As usual, TBM in this case enabled the IT leaders to leverage data and inform their decision making so that they can react quickly to changing market dynamics, reallocate their resources, and optimize their cloud and agile strategies to deliver on business objectives.
DigiconAsia thanks Tarun for sharing his objective insights of TBM.