Over the last two decades, our collective understanding of the role of information technology (IT) in enterprise has undergone a remarkable transformation. Once considered an overhead expense, with investment capped at a predetermined percentage of revenue, IT is now correctly understood as a strategic driver of business.

However, this shift doesn’t mean that organizations can afford to throw unexamined amounts of money at technology and call it business strategy. Enterprises need a tactical decision-making approach that engages IT as a partner in reducing duplication and waste while ensuring that operations run as smoothly as possible.

Technology Business Management (TBM) provides that approach. TBM helps enterprises ensure that their mission is being fulfilled both effectively and efficiently.

What is TBM?

Technology Business Management is a decision-making framework devoted to planning, managing, and optimizing the value of tech investments across all business units. A comprehensive TBM strategy helps frame business decisions properly to align all tech investments in support of business goals, clarify and reduce the unit economic cost of IT, and realize the full value of applications and service level agreements (SLAs) with vendors.

A good TBM Framework is designed to be collaborative rather than prescriptive. It provides guidance for a flexible business management approach that supports the whole enterprise. Centered around technology investment, TBM is crucial to maintaining business operations ranging from manufacturing to accounting to marketing at their most efficient and effective. That’s because technology underscores nearly every operation in every sector. IT is no longer a support system but an integral aspect of enterprises as diverse as agriculture, academia, grant-making, and government. (In fact, GSA publishes a TBM playbook that’s a valuable guide for entities well beyond the federal government.)

Partnering with IT to Minimize Redundancy and Waste

One of the tools created by the TBM Council to help organizations evaluate their TBM to ensure operational efficiency and efficacy is the TBM Index. The index is a standardized assessment that offers a benchmark for enterprises using TBM around the globe.

In concert with a trained TBM analyst, an organization might use the findings of the TBM Index to assess what TBM elements they already use and which ones they might adopt to improve IT management — and by extension, the management of operations and service provision across the enterprise. The goal is to align IT, finance, and business stakeholders and create a holistic, transparent approach to technology investment.

Why a holistic approach? Because when investments are made without an understanding of all business units’ existing needs and resources, you risk creating silos of duplicated software and hardware. For example, three separate business units could hold three separate licenses for the same software platform when a single license could service them all. A bank of laptops could sit unused in one department while another unknowingly scrambles to find all the hardware needed to serve an increasingly remote workforce. By partnering with IT leadership, leaders of other business units can minimize redundancy and waste in maintaining their operations.

Using the TBM Taxonomy to Guide Decision-Making

Another implement in the TBM toolkit is a standard taxonomy that describes cost sources, technologies, resources (hardware, software, and workers), applications, and services. Most enterprises use generally accepted accounting principles (GAAP) to standardize financial reporting and enable comparability between financial statements. The TBM taxonomy provides a similarly generalized way of categorizing and reporting IT costs, including hardware, software, labor, services, and facilities.

Understanding these costs translates into an understanding of IT’s value across all business units, which in turn aids in strategic decisions about legacy technology and new investments to support or expand existing operations. According to the TBM Council, the taxonomy provides multiple perspectives on each cost, according to the following breakdown:

• Finance View
• IT View
• Business View

This taxonomy allows organizations to initiate and engage in discussions that focus on the needs of each business unit by allowing leadership to categorize IT infrastructure and services.

Reliable data is, therefore, key to maintaining business operations via a TBM framework. With the proper data, TBM can describe the whole range of IT needs and expenses, from revenue drivers to revenue supporters to keep-the-lights-on (KTLO) infrastructure needs, including labor and licensing costs. TBM may also help eliminate the practice of budget padding — adding funds at the outset to cover unexpected costs later — by making technology needs understandable and transparent. By emphasizing the strategic advantages of TBM, including the very likely cost-savings, and by collaborating with users at all levels of the organization to access usable data — and in some cases relying on self-service business intelligence tools and even machine learning — IT can be a more powerful operational partner.

Maintaining Your Business Operations with a TBM Framework

A TBM framework rooted in the technology business management taxonomy is increasingly essential to maintaining business operations regardless of sector. TBM helps practitioners integrate IT across all business units and align IT goals with business goals, enabling efficient, transparent, and responsive operations.

Are you using a TBM framework to maintain your business operations? If your leadership team needs guidance translating TBM to your enterprise, Momentum can help. Drop us a line to learn more.