The Transformative Power of TBM

In today's rapidly evolving business landscape, technology is not only driving organisational innovation and digital transformation but also playing a crucial role in maintaining competitive advantage. In this changing business world, IT and effective financial IT management is increasingly taking centre stage. Digitalisation, FinOps and key technologies such as cloud transformation are reshaping business by enhancing scalability, efficiency, and connectivity within organisations. However, digitalisation initiatives and the implementation of the latest technologies do not inherently guarantee streamlined operations or cost efficiencies. This challenge is particularly evident in the IT sector, where the continued use of disparate data systems leads to disconnects in data and transparency issues, despite cloud migration and digitalisation efforts. This highlights a lack of unity across IT operations within organisations.

In answer to this challenge, companies require a unifying framework that consolidates disparate data sources and delivers actionable insights relevant to business operations. This is where Technology Business Management (TBM) steps in. Intero specialises in implementing TBM frameworks, enabling organisations to unify their IT operations, enhance data transparency, and achieve greater operational efficiency.

What is TBM?

Before we jump into how Intero is here to help you, we’d like to begin by introducing TBM and its value-add: TBM is a value management framework developed by the TBM Council that enables organisations to better understand the costs, consumption and performance of IT services and resources from a business perspective. As a framework specifically created for the IT sector by C-suite and technology leaders, TBM is unparalleled in providing a structured approach to managing and understanding IT costs.

Building upon the established and popular IT Financial Management (ITFM) framework, TBM represents the next iteration in managing IT costs. ITFM has long been a trusted approach for tracking and controlling IT expenditures, but TBM expands on this foundation by integrating a critical business perspective. This evolution is making waves in the IT sector, having introduced a holistic view to financial insight that aligns IT investments with business objectives. TBM’s unique ability to connect finance and business sets TBM apart, providing companies with a more comprehensive and beneficial framework than hitherto available.

How does TBM work?

So, how does TBM function on a practical level? The TBM framework provides comprehensive visibility, planning, billing and benchmarking of a company’s technology investments to the business, finance and tech leaders. TBM consists of a multi-tiered taxonomy that categorises and connects IT costs, IT resources and solutions to provide holistic insights into the business value generated by an organisation´s IT portfolio. 

In the taxonomy, cost data is gathered from various data sources across the organisation. These costs are then sorted into distinct cost pools, such as labour, to group similar expenses. Next, these cost pools are organised further into IT Towers, which represent the IT resources contributing to the operation of a service. For example, a workplace communication service may make use of the “end user” Tower, as the workplace employees will consume internal messaging capabilities. These IT Towers are then connected to the relevant IT solutions at the solution level, where the individual IT solutions (whether they be applications, services or products) are themselves categorised according to their purpose. The solutions themselves are then grouped into business categories, such as revenue-generating solutions. 

Below is a simplified depiction of how the taxonomy functions:

The four main layers of the taxonomy not only translate between financial and IT perspectives, but also produce insights from a business perspective. The business layer of the taxonomy provides organisations and business leaders with the necessary, comprehensive insights into the value that IT services bring to the company within specific business contexts. The taxonomy in TBM is not standalone; rather, it is integrated into a model that consolidates the different data sources in one place and maps costs to their uses. The model acts as the vehicle for layering the data, following allocation rules and providing key metrics and visualisations. 

Since the TBM framework and model are intended to be used on an organisation-wide level, standardised terminology is used to provide a common language for finance, IT and business leaders to understand the data. This common ground enables meaningful intra-departmental discussions to take place and helps simplify implementing TBM. 

Why TBM?

Given TBM’s robust foundation in IT Financial Management (ITFM) and its scalability, TBM is an increasingly popular framework among organisations seeking to optimise their IT investments. As a US-based organisation, TBM has found significant success among American companies. However, over the past decade, TBM has rapidly been growing in popularity across Europe, with Germany-based companies notably having emerged as leading adopters of TBM. Based on our research and experience, TBM is gaining traction due to its versatility and usefulness in key areas such as agile transformation, strategic planning, and business optimisation. Based on TBM Council’s public information on the ways in which companies are leveraging TBM, below is a depiction of which companies are benefiting from implementing TBM across several key operational and strategic areas: 

Whether TBM is leveraged for the purposes listed above, or a range of other motives, TBM offers several advantages for the effective management of IT costs and resources on operational and strategic levels: 

These advantages of TBM help to drive significant improvements across various aspects of IT and business operations and ensure maximum business value can be leveraged. 

At Intero Consulting, we possess the expertise to support your organisation with implementing the TBM framework from start to finish. Our knowledge spans the intersection of IT, Finance and Business, enabling us to provide comprehensive support at all levels. We take a structured and methodical approach to implementing the TBM framework to ensure a seamless and effective implementation tailored to your organisation's needs. Here’s how we begin the process:

1. Initial Assessment: We start by gaining a comprehensive understanding of your organisation’s current technology landscape by assessing the existing IT and financial processes and where the challenges lie. This involves reviewing existing data sources, systems, and processes to identify gaps and areas for improvement.
2. Defining Scope and Objectives: We define the scope of the TBM implementation project, including specific deliverables, timelines, and milestones. To do this, we engage key stakeholders across IT, Finance and Business units to gather perspectives on TBM goals and expectations. This ensures that all parties have a clear understanding of the project’s objectives and expected outcomes. We then work with you to set measurable objectives for the TBM implementation, such as improving cost transparency, enhancing investment decision-making, or streamlining financial reporting.
3. Data and System Integration Planning: We assess the data quality and integration requirements, identifying key data sources and systems that need to be integrated for effective TBM implementation. We develop a detailed strategy and timeline for integrating disparate data sources, including mapping data flows, defining data governance processes, and ensuring data accuracy and consistency.
4. Project Planning: Together we establish a project team and work structure, and also develop a communication plan to keep all stakeholders informed and engaged throughout the implementation process.

If you are interested in integrating TBM into your organisation, our experts will be happy to provide you with end-to-end support throughout the implementation process. We look forward to helping you unlock the full potential of TBM and achieve sustainable business transformation.