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What is Technology Business Management (TBM)

What is TBM?

Technology Business Management is a collaborative framework that helps businesses align their IT departments with overall business goals, an essential practice for today’s digital enterprise.

It isn’t prescriptive, per se; because it’s solution-oriented, businesses can use it with a degree of flexibility like many of the other frameworks on the market (think ITIL). The goal is that TBM scales with your organization, and as you grow, so does your usage of this system.

What is the Technology Business Management Council?

Technology Business Management Council is a Washington-based non-profit organization with the goal of creating and promoting “best practices for running IT as a business”. TecBMC’s mission is to foster discussion and innovation in the areas of business/IT alignment, governance, transformation, strategy and integration. The purpose of the organization is to promote best practices, through networking and meeting forums.

Guide to TBM

  1. TBM is a process, not a project

According to Gartner, TBM is a comprehensive approach that:

  • Considers the entire IT department
  • Analyzes and prioritizes business and IT

Using TBM helps organizations figure out ways to run IT more like a business unit, not simply “an overhead” or “a cost center.” Consider the following benefits:

  • Focus on the business needs
  • Create clear roles
  • Aligns IT with the business

First and foremost, the main benefit of TBM is that IT is an extension of other business groups. TBM is a part of an organization, not in some way separate from it. This is one of the most important aspects of implementing TBM; the IT department should truly be aligned and working hand in hand with other departments to achieve business goals. Rather than pretending we can be in isolation, IT needs to be embedded in the organization and working together with units like sales and manufacturing.

  1. Key metrics make TBM actionable

One area where IT departments often fall down, especially with the new digital enterprise, is that they can’t prove the value they bring to the larger organization. With TBM, both IT and business units leverage performance metrics to identify trends like these, and address them in real time:

  • Cost to deliver a solution
  • Attribute of IT that IT and the business unit value most
  • Level of service

In terms of demonstrating value, the metrics you select in TBM are very important. When you show value, you provide a service that benefits both parties. This is a powerful synergy that’s hard to achieve in other ways, so it’s important to customize this value. Metrics that will show value in different ways depend on where your organization is and where it wants to go, so a little bit of trial and error may be needed to get the hang of it.

  1. TBM scales as your organization grows

Growth is an important factor for TBM, because it helps organizations leverage their teams in different ways. Consider the following:

  • Ensure you keep the same focus
  • Make your teams more agile
  • Assess and test

TBM provides a framework that your organization can use to develop new goals and initiatives as they are needed, rather than trying to somehow shoehorn everything into a single engagement model. A programmable system like TBM has the power to help your organization take its goals, new initiatives, and ongoing objectives into account as it grows, delivering value and increasing agility.

  1. TBM makes your company stand out

Big companies are coming out with TBM frameworks, and small companies don’t want to miss out.

Big companies are coming out with TBM frameworks, and small companies don’t want to miss out. In an era of continually evolving technology, digital transformation is a necessity to survive. Companies of all sizes are seeking ways to enhance the agility of their IT departments to remain competitive in today’s economy. With TBM, your organization can get back some of the agility you may have lost in the past with a more traditional IT department structure.

  1. TBM provides a roadmap

TBM doesn’t appear out of thin air. It’s the result of a strategic roadmap that the organization conceives.

TBM doesn’t appear out of thin air. It’s the result of a strategic roadmap that the organization conceives, which is then followed by a cycle of measurement, learning, and change. TBM is the end result of this process, one that allows an organization to define the types of applications, software, and testing necessary to achieve its goals. The bigger your organization is, the more TBM can help, because big businesses typically have a lot of moving parts that need to fit together in a specific way.

  1. It’s cheaper

The benefits of TBM aren’t solely strategic. Businesses who adopt TBM find that they can save money as well as achieve other benefits. Consider some of the advantages:

  • Reduce costs
  • Improve security
  • Enhance continuous improvement

TBM enables IT to provide applications that are more cost-effective than traditional IT frameworks. It may be hard to put a precise number on what such savings can amount to, but they can be significant if you use TBM in a fundamentally different way than previous technologies. IT functions like security, continuous improvement, and other maintenance tasks can be fine-tuned when you use TBM as a base.

  1. It reduces risks

In a recent report, Gartner cited the top obstacles to implementing TBM, saying:

“A lack of management support, no business urgency, a strategic focus on innovation, lack of buy-in from business managers, a lack of trained staff, lack of executive sponsorship, a lack of business sponsorship, and organizational culture and inertia.”

Once you’ve assessed your ability to overcome these obstacles, you’ll likely find that at least some of the benefit of TBM is immediately available to you.

  1. It enables new business opportunities

TBM can help IT departments grow, and according to Gartner, this also helps create new business opportunities. Consider:

  • New business opportunities
  • Better workforce productivity
  • Faster evolution/change

With TBM, IT can take on a new role that’s more aligned with the other business units in the company. This closer relationship can lead to faster change, better productivity, and stronger business opportunities in the long run.

Technology Business Management Framework

Technology Business Management (TBM) is a value-management framework instituted by CIOs, CTOs, and other technology leaders. Founded on transparency of costs, consumption, and performance, TBM gives technology leaders and their business partners the facts they need to collaborate on business aligned decisions. Those decisions span supply and demand to enable the financial and performance tradeoffs that are necessary to optimize run-the-business spending and accelerate business change. The framework is backed by a community of CIOs, CTOs, and other business leaders on the Technology Business Management Council.

What is the Technology Business Management Framework?

The Framework is a prescription for getting the necessary business-aligned decisions for optimal spending for a team of transactional-based business operations and organization units and a portfolio of transformational business units.

The Framework iterates between prescribing the cycle of spend decisions and investment decisions along two parallel tracks defining systems of resources and systems of capabilities.

The Framework calls for the use of common language between technology and business. It provides a common vocabulary and visualization to clarify:

  • where the value of technology ultimately resides with respect to transforming and operating the business in three time horizons,
  • on what dimensions of value technology creates the greatest value and the lowest value to the business, and
  • in what proportion, related to both business units and time horizons, it creates value and in what proportion it erodes value.

The result is a repeatable process for working together to align technology spend and investment with business growth opportunities and maximize value from the technology budget.

The Framework is a set of processes and a collection of concepts, data, and models. It can be applied to:

  • team of business units in an existing enterprise with a legacy portfolio of systems today,
  • looking to fully optimize those existing systems for run-the-business purposes to maximize run-the-business spend, and
  • looking to build a portfolio of new systems for transformational purposes to maximize transformational spend.

Processes

The Framework prescribes four processes for aligning technology and business value. It is a prescription rather than an actual process. The technology executive team will need to decide on the most appropriate sequence or mix of processes to execute against the existing portfolio. The frameworks elements of the process tools and techniques for conducting the processes of the Framework will be described in a companion article later.

Optimizing Run-the-Business Value. For business units with a legacy technology portfolio, the optimization process uses cost, consumption data, and performance data to optimize spending. The process recommends how to balance the spending on three run-the-business resources: people, applications, and infrastructure to achieve strategic financial and operational results. The process combines data from other functions in the organization, such as finance, HR, and customer service, to develop the full picture of the costs and benefits of each technology to the overall business performance. The process leverages portfolio and investment management models. It assembles the data from these models and visualizes the resultant matrix to describe the complete portfolio value. The process provides recommendations for optimizing the portfolio and aligning spending with the revenue opportunities available to the business.

Build Transformational Value. For business units with a portfolio of new business opportunities, the strategy and investment process uses strategic opportunity data, strategic impact data, and budget data to recommend a strategy, build business cases, and engage in the fast track to get a portfolio of new systems running with the fast track of business processes. A fast track project plan calls for the business to run “lean and mean” through the first two to two and a half years of the new venture’s existence. The process models the tradeoffs between the total system value and the system and environmental competency value determined by the business. Given the relative timing of the strategic and operational benefits over the new venture’s existence, it provides recommendations for the generation of a steady flow of transformational value in small increments as the system is operationally refined and enhanced. The process uses portfolio and investment management models. It assembles the data from these models and visualizes the resultant matrix to describe the complete portfolio value. The process provides recommendations for building a portfolio of new systems that grow transformational value.

Recover Value from Backlog. For business units with a legacy portfolio of unmonitored investments, the triage process recommends how to reprioritize and redirect investments and project funds while minimizing the disruptions to the business’ operations. The process starts with a list of “backlog” products and services. The first effort is to determine if these backlog items are “must do” systems that will stand on their own without much further system development. If these items are standalone, they are released into production as legacy systems that will run until they fail. If they are not standalone, the process recommends a path for the “not quite done” systems. The viable next steps for “not quite done” systems are to complete them or to replace them with a new system that will be operational without going into production. The process uses portfolio and investment management models. It assembles the data from these models and visualizes the resultant matrix to describe the complete portfolio value. The process provides recommendations for recouping value from the money that was allocated to the backlog items.

Adopting TBM isn’t a one-time event. It’s a continual process that IT must follow to align IT with the business’ needs and goals. Consider how TBM can help you transform your business.

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