IT Cost Optimisation Through TCO, TBM and FinOps

Commence your complimentary self-assessment for Total Cost of Ownership (TCO) now and discover:

 

• Where your largest cost centres lie – from licences to cloud services
• How to allocate IT expenditure precisely on a service basis (TBM)
• Immediately implementable measures for cost reduction and efficiency enhancement

TCO offers a comprehensive approach to evaluating the total cost of an IT asset or IT solution throughout its complete lifecycle.¹ Rather than focusing solely on acquisition costs, TCO considers all direct and indirect costs associated with operation, maintenance, and ultimately decommissioning.

This approach is particularly important when:

 

• You are under high cost pressure and need to identify potential savings
• Transparency is required for investment decisions or technology roadmaps
• The connection between IT costs and IT services is unclear

 

Implementing a TCO model enables you to:

 

• Gain complete transparency over all cost-effective factors
• Make informed make-or-buy decisions for IT services
• Compare different solution alternatives effectively
• Achieve long-term planning reliability for IT investments

 

TCO is especially effective when evaluating application developments and building profitability models, as it considers a multitude of variables.¹

Without TCO analysis, there is a risk of poor decision-making in system implementations, excessive operating costs and uncontrolled cost development. Intero Consulting offers you a proven methodology to fully capture costs, structure them systematically and allocate them to IT services.

TBM is a framework that categorises and links IT costs, IT resources and solutions to enable holistic insights into IT expenditure.² It provides a common language for IT and finance departments and enables cost allocation based on causation.

Whilst TCO focuses on the total cost of an asset, TBM focuses on the allocation and management of the entire IT budget.³ The multi-level taxonomy of TBM ensures:

 

• Transparent cost allocation to business units
• Value-tracking of IT investments
• Better alignment between IT and business
• Well-founded decision-making bases for technology investments

 

TBM enables organisations to model the total operating costs of IT resources across hybrid and multi-cloud environments⁴, which is invaluable particularly in complex IT landscapes.

TBM thus goes a step further and connects costs, performance and benefits of IT. This approach is ideal for companies that:

 

• Want to position IT as a strategic business enabler
• Suffer from silo thinking and lack of transparency
• Want to demonstrate the value contribution of IT to business success
• Want to conduct a benchmarking analysis against their competitors

 

TBM creates a common language between IT and business departments. It enables cost allocation based on causation and makes business value transparent. Intero Consulting supports you not only in model development but also in concrete implementation – with an interdisciplinary approach covering IT, controlling and strategy.

With the rapid rise of cloud technologies, FinOps has established itself as an essential framework for cloud cost management. FinOps combines financial, technological and business expertise to optimise cloud expenditure and maximise business value. As cloud computing has risen, new challenges in cost management have emerged. FinOps addresses precisely these problems:

 

• Lack of overview of ongoing cloud costs
• Uncontrolled cost growth through pay-per-use models
• Insufficient governance and responsibilities

 

In contrast to TBM, which manages the entire IT budget, FinOps focuses specifically on cloud costs.³ The key principles are:

 

• Transparency and allocation of cloud expenditure
• Real-time monitoring and forecasting of cloud costs
• Responsibility for resource utilisation
• Continuous optimisation of cloud expenditure

 

FinOps provides granular insights into cloud costs⁴ and supports companies in effectively optimising cloud and licence costs⁵.

A particularly important aspect of FinOps is cloud cost forecasting, which helps organisations predict future expenditure and plan accordingly.⁶

Intero Consulting helps you build the necessary governance structures and bring finance & IT together. Our technology-agnostic approach works with all common cloud platforms.

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