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TBM: from measurement to a core business function

Posted: 07/09/2016 - 09:53

IT reaches far and wide within organisations, particularly in the case of large enterprises, but it can be difficult to understand exactly what it does and how it is having an impact, especially when it comes to measuring return on investment. Enter Technology Business Management (TBM). Simply, TBM provides an end-to-end view of the delivery of IT, capturing how both resource and cost are being consumed by the business. This facilitates more informed conversations around IT spend and helps demonstrate IT’s strategic value to the rest of the business. Gaining valuable insights starts with benchmarking and cost transparency. This means using tools to standardise and align financial information, taking into account the unit and total cost of delivery, to reduce the time it takes to collect data and allow for a fact-based approach to IT strategy transformation. Having visibility of the financial information and data brings IT out into the open so that it is not simply a support function for internal clients, but rather a contributor to the company’s strategy, growth and success. Yet some companies treat benchmarking as a routine “check-box” item on a list of annual tasks, using it simply to provide a baseline view into costs. Historically, it was difficult to gain the transparency so important to enable accurate benchmarking, and there were significant challenges to getting the data in the right shape to extract relevant insights. This may go some way to explain why its use beyond benchmarking has not been more universally recognised. The TBM process has since overcome these historical challenges, and is now used not only as a catalyst for understanding and managing IT spending, but as an integral part of an organisation’s strategic performance managing processes, which stretch across departments well beyond the core IT function. In addition to enabling much-needed cost transparency within IT, TBM allows companies to join up process flows across their business, which in turn enables them to better understand how IT spend connects to supply chain management, finance, human resources and other service areas. It works like this: primary TBM processes are first defined by specific inputs and outputs, then mapped to the organisation’s most pressing needs. These are identified in the IT system by stakeholders across the organisation and range from challenges such as migrating applications to the cloud to decommissioning legacy mainframes. Such cases provide further evidence of the way in which TBM reaches across the business. By following this process of aligning each function to primary TBM processes, enterprises are able to create clear roadmaps, complete with organisational design strategies, swim lane charts, process cards and timelines. This level of cross-department integration brings a number of benefits. Chiefly, embedding TBM within the broader performance management framework puts an organisation in a position to draw in support for the program from across the business. This helps key stakeholders track investment value and opportunities and, crucially, empowers companies to better communicate the value of IT. When used in this way, TBM gives IT a better understanding of what the broader organisation needs to succeed and grow, and plan accordingly, optimising costs and transforming the entire business of IT so that it too runs like a business.

 

ISG

Information Services Group (ISG) (NASDAQ: III) is a leading technology insights, market intelligence and advisory services company, serving more than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector organisations to transform and optimise their operational environments through research, benchmarking, consulting and managed services, with a focus on information technology, business process transformation, program management services and enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the deepest data source in the industry, and more than five decades of experience of global leadership in information and advisory services. Based in Stamford, Conn., the company has more than 800 employees and operates in 21 countries.

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About The Author

Nigel Hughes is Partner at Information Services Group (ISG). Nigel has over 20 years’ experience of advising UK and global clients on service development, change management and sourcing strategy. Nigel’s IT and business process expertise spans financial services, public sector and utilities where he has been instrumental in delivering clients significant savings, drawing on his deep experience in operating model definition, Technology Business Management (TBM), benchmarking and data-driven analytics. Nigel is recognised as a thought leader on outcome-based service definitions and the transition to standardised services.