The modern CIO is becoming a master of the balancing act, especially as digital innovation continues to accelerate so quickly. Surging demand for improved technology has seen the role of the CIO grow in importance. This is especially true as the technology economy, comprising of traditional information technology spending and supporting labour, is estimated to have reached more than $6.3 trillion globally. IT has truly become a critical component of business performance, differentiation amongst competitors and revenue generation. However, with the evolving and ever-important CIO role comes heightened budget responsibilities. A recent survey of European CIOs revealed that while there is an expectation of increased budgets to pay for innovation, there are still concerns over balancing this with operational concerns. Yet, the simple fact is that CIOs don’t have time to look at every financial spreadsheet to find the data they really need.
This is why many are now turning towards Technology Business Management (TBM) to address this growing challenge. Rather than treating IT as a list of costs, the TBM framework helps CIOs to gain a granular view of their overall IT spend, including complex costs such as cloud, end-user compute and security, and associated staffing. Most businesses engage in the practice even if they don’t realise it; using cost metrics, implementing chargeback procedures and generally moving beyond viewing IT as a service cost are all examples.
But to really gain an understanding of IT finance, and work to both support the running of the business and instigate technological change, CIOs should be actively embracing TBM and weaving it into the way they work. Treating IT as its own business within the business, and partnering with other BUs to enhance their work, is vital to ensuring everyone gets the most out of IT. The benefits of employing TBM are clear. Organisations that have implemented this discipline produce 69 per cent more income per dollar spent on “run the business” expenses. In addition to this, it also has the added benefit of benchmarking IT spend against competitors – and also internally – which helps organisations realise the progress they have made, or even need to make.
Beyond this however, by adopting TBM, IT leaders can become strategic partners to the business by clearly demonstrating the value of IT investments, accelerating innovation and shifting their technology investments from running the business to actual digital innovation.
We’ve spoken to hundreds of IT leaders about their experiences since starting to actively practise TBM – we’ve distilled all those conversations into 10 things you should know before you start too.
1. TBM is a state of mind – not just a one off
“So many people are just starting out on their TBM journey, but you realise that it’s an ongoing thing. You move forwards with it every day, week and month that goes by.”
Planning and Performance Manager, Cancer Research UK
2. TBM is something everyone in the business should know about
“Having a central core metric that speaks to the business is something that I’m really going to take away and think about. The idea of TBM [is] really relevant to not just people involved in infrastructure and finance but widely accepted by the rest [of the business].”
IT TBM Manager, Burberry
3. It helps you to really know where IT spend is going and how customers get value
“It means the possibility to get a grip on our costs and have transparency on them, know what to do with our costs, and identify the cost drivers together with our customers.”
Head of Technology Business Management Office, S-IT Solutions
4. It gives the power of choice back to the business
“It also means driving those conversation with business… We can show the structure of our costs and the drivers of our costs and we can actually give the choice back to our business, because it is a choice, and we make those choices transparent and we make those decisions transparent.”
Head of Performance and Business Management, RBS
5. It helps to standardise technology across the business
“One thing to take away is that taxonomy and the standardisation of technology applied in your business. It will add value. I can tell you from personal experience it has enabled me to go back and achieve some amazing things in my career.”
Head of Global Compute, Uber
6. However, the rest of the business may view TBM differently…
“TBM to me is to run technology as a business, to my organisation, it’s cost transparency, we wish to understand what it costs to deliver our business services and what our applications cost us front to back full stop.”
Business Manager for Infrastructure, ICBC Standard Bank
7. …so TBM should be used to help you communicate the value of IT more clearly
“TBM mainly for me means, in the past, to have a standard framework to do IT service costing and, in the future, I would say to find a common language between IT and business to talk about what is really the value of IT.”
Head of IT Controlling, Amadeus
8. It helps to stop IT being taken for granted
“From a TBM perspective, the majority of our focus is on our internal chargebacks…the application owner can see what their footprint is and they can understand the cost and the expense. A lot of people take IT for granted. There’s a lot that goes on in the background to enable it.”
Director of the TBM Office, MetLife
9. It can help you plan for the future
“It’s a way to understand our costs better and to go in fact-based management and also to be able to simulate a cost like in the future for our decision-making today.”
Finance Director, Kone Technology
10. It elevates the CIO and IT organisation to that of a valued business partner
“Taking what is often perceived as a cumbersome and bureaucratic back office and transforming it into a true business partner – flexible, forward-thinking, and adaptable in support of our various businesses – has made me very proud of the IT team.”
Jack Bischof, Regional Vice-President EMEA, TBM Council
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