Speaker: Ron Brill, President & Chairman
Technology Business Management, or TBM, is a methodology designed to implement IT financial management (ITFM). The main goal of TBM is to run IT like a business, allowing important conversations to happen between IT, finance, and other business units.
In this episode, Ron Brill, President & Chairman of Anglepoint, gives an overview of Technology Business Management and ITAM, and how the two can work together. When done correctly, IT can change from being seen as a cost center to being a business value driver.
This episode covers:
- The Technology Business Management taxonomy
- Examples of Technology Business Management and ITAM together
- The four value conversations of Technology Business Management
- And more
If you’re interested in learning more about Ron, connect with him on LinkedIn.
Listen in on our latest podcasts by checking out the ITAM Executive.
Hi everyone. I’m Ron Brill, president, chairman of Anglepoint.
Outside of Anglepoint. I am chairing the ISO Committee for ITAM Standards. That’s the committee that owns the ISO 19770 family of standards has participants from 25 countries working on the ISO standards. I’m also the project editor for the next edition, the fourth edition of 19700-1 for ITAM system.
As part of that I also Participate in the ITAM Forum on the board of trustees and vice chair. And I also co-lead the ITAM and FinOps special interest group as part of the FinOps Foundation.
Very exciting to be speaking with you all. One of the things we were hoping to do today is really focus on where we’re seeing the ITAM industry heading in the next five plus years. And this is based on our daily work and conversations with hundreds of enterprise clients around the world. That’s the primary source. Most of those are within the Fortune Global 1000 and so on. So getting really good perspective from that as well as what we’re hearing from the analyst firms, industry events, conversations within ISO outside our specific committee as well. And so we’ve consolidated all those different inputs and put this together.
So today I want to talk about, Technology Business Management, TBM, which is really one specific methodology to implement IT Financial Management, ITFM. So you may be familiar more with ITFM as a term rather than TBM.
TBM is a specific one. And what is TBM? It’s really trying to help organizations translate technology investments to business value. So basically allowing to run IT like a business, run IT with the business and allow a conversation to happened between finance IT and the business units. And, using taxonomy and language at all three parties understand versus just IT or just finance.
And there are a number of benefits that could be driven and could be affected once you have that in place. And so what is it based on? Based on a methodology. It’s the TBM council is behind encourage you to check them out. Apptio is the Firm that’s behind the TBM Council.
There’s a book that came out that outlines the methodology, their certifications and they have really great resources about tbm. And again, this is just one methodology for doing IT Financial Management. You can, you could follow any other there’s a whole lot of change when you actually, look under the hood.
What is it? So this is the picture of the taxonomy that we’re talking about, right? So finance’s view of the business is really all around cost. Cost pools, the general ledger entries, right? That’s how finance sees the world of it through ledger entries, and so forth.
So you see some of the main categories here. Hardware, software, and sort of services, which includes cloud and SaaS. That’s where IT lives. Those three are of the most interest to us, right? So if you’ve if you’re paying, Oracle, $1 million a year, it’ll be part of what measure here in the software.
But IT doesn’t view itself that way. IT views itself mostly in, within the context of IT towers. Which is the term that the TBM methodology uses. That’s how IT runs itself internally. That’s how IT refers to itself. As well as looking at things like infrastructures and platforms and so forth.
So this is how, IT views itself when you get to what is running on those infrastructures and platforms and so forth as well. Those are things like applications, products, and services. And that’s the first level that’s actually visible to the business as well, that the business has an understanding of those applications, products and services then drive things like customer and partner facing applications and solutions enabling business units and so forth. So this is the business view of the business, which is essentially. What you see here, plus maybe applications, product and services.
This is the IT view of the business, and this is the cost pools, which is the finance view of the business. What this taxonomy allows you to do once you have that in place, is really to have that translation from one end to another and be able to express cost in terms of the business value that they bring.
So for example, if you’re paying, going back to what we said before, you’re paying Oracle 1 million a year. You’d be able to say that, 50K out of that 1 million is driving at the end, application XYZ’s part of business unit A that’s driving 10 million revenue for the business.
You’d be able to do that translation all across. If you look at just the FinOps view And you can see those, the specific elements that FinOps touches on FinOps was designed from the start to fit within this model. So for those of you familiar with the FinOps methodology, it’s really all about that, having that transparency, have that show back, having using unit economics to express value within the cloud and so forth.
So FinOps does TBM just for that cloud slice of it. But TBM is really about all of it, not just the cloud. And the interesting thing as well here is that if you look at sustainability, it can actually fit very nicely within this overall model because it’s essentially if, just looking at the taxonomy piece of TBM, it’s a chargeback mechanism on a chargeback on steroids, if you will. It does many other things, but just this translation model, this taxonomy, you can view it as a chargeback model and almost like it’s a black box where you put something on one end and it allocates it to based on the rules that you’ve built to the right business units and applications and so on.
And the business KPIs be revenue daily users. What, whatever your unit economics metrics are. You can put dollars on one end and have them allocated, or you can put tons of CO2 and have them allocated the same way. So if you know that, an external let’s AWS you get a report from them monthly that says, this is your carbon footprint this last month, you’d be able to allocate it using the exact same model to all the right customer partner facing applications and be able to say each one of them, what is the carbon footprint that application generates.
But as we mentioned the model is TBM is about a lot more than just a fancy chargeback mechanism, although that’s the basis for it. What it really allows you to do, and there’s a whole methodology behind it, is have what TBM model calls the four value conversations, which essentially are the four key questions that every CIO needs to ask themselves, right? And this is almost like the job description of a CIO. Two of these questions have to do with running the business. Two of these questions have to do with evolving, growing, changing the business, right?
Are we delivering the right performance at the best price?
Are we spending our resources to get the biggest return possible in those resources, right?
Are we maximizing our innovation dollars?
Are we improving the speed of the business and so forth?
Once you see this, then I think it all comes together in the sense of the value that ITAM and FinOps bring to the business.
Because if you go back to the previous model, these three boxes, cloud services software and hardware are where most of the heavy lifting takes place, right? For many of these others, it’s relatively straightforward or more straightforward. I would say this is where a lot of the heavy lifting is happening, and this model allows you to really just take it to the last mile and make the data relevant to the CIO by supporting this, so in essentially what TBM does for ITAM and FinOps, first of all, it’s the glue that’s where, FinOps and ITAM hangs together at the level where they meet and work together to provide the CIO with that single pane of glass or transparency into the IT organization and enabled the CIO to have conversation with their C-suite peers across the organization and really elevate the discussion and show the value of what we do.
And that’s one of the things that that I like about TBM and IT financial management in general. With the pace of decision making within our organization having significantly increased post pandemic, these conversations are going to become a lot more relevant to everything that we do.
Essentially what this conversation obviously does is move the perception of IT from being a cost center to being a business value driver. And as you do that, you’re evolving the conversation from one that’s focused on cost to one that’s focused on value. And this is really what we’re trying to do in the model.
And again, it already does that to an extent. FinOps does that to an extent. IT financial management, TBM does that for all of IT and brings it all together in a more consistent manner that would be relevant for a CIO to consume. There are a lot of Case studies that you can find them on the TBM council of large companies that have transformed themselves with TBM and again, just as a reminder, big part of what TBM is really ITAM and FinOps.
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