Quick Rundown of Technology Business Management (TBM) Fundamentals

Every day, the pace of technological progress quickens. Each day, tech becomes more integral to business. This – coupled with uncertainties in the economy – that it’s never been more crucial for companies to understand how their investments in tech drive value to the wider organization.

Enter technology business management (or TBM). TBM is a methodology for businesses to manage their IT as if it were their own business, focusing on value delivered rather than solely costs. But how does it work? In this article, we’ll run through the basics of TBM, its framework, taxonomy and model. We’ll also look at the benefits of TBM to your business and how you can get started.

How is TBM defined?

The TBM Council defines technology business management as ‘a discipline that improves business outcomes by giving organizations a consistent way to translate technology investments into business value.’ It’s there to help businesses take their tech to the next level, managing their IT more effectively and aligning it with the goals and strategies of the broader company.

TBM is often used interchangeably with IT financial business management (ITFM), but in reality, the two are quite different. ITFM focuses on the cost of IT services, spreading out to include non-personnel and operational costs such as hardware, software and services. However, TBM is like ITFM on steroids, going further to analyze the business-added value from IT services, allowing CIOs and CFOs to make data-driven decisions on technology investment.

TBM framework and taxonomy

The pillars of TBM are its framework and taxonomy. Let’s look at each of these.

TBM’s framework is its foundation. It’s the structure that gives leaders total visibility into the tech investments regardless of the tech stack, delivery or development model. Its ten elements ensure optimization for increased business value, aligned with company goals. Like a sales team with a CRM or a finance team with an ERP, your tech team succeeds with the TBM framework. With it, you can understand how the tech in your business operates, the resources it uses, the solutions it delivers and the outcomes it creates.

The TBM taxonomy is a standardized way to organize IT cost structures. It’s a template that allows businesses to allocate IT expenses into one of four ‘towers’, or spending areas:

  • Cost Pools
  • IT Towers
  • Solutions
  • Consumers

When everyone speaks the same language, complex concepts suddenly become easier to understand. Organizations can react faster to changes in the market, let the data guide their decision-making and align around overarching business objectives.

With the help of specialist software, businesses can utilize a TBM model, fairly allocating costs according to usage and dependence on other parts of the organization, while translating investments to business value.

Download the free guide:
A CIO’s Guide To Reaching TBM Maturity

The clear benefits of TBM

In business, success comes to the fastest movers. It’s why the top 10% best-performing companies (economically) check in on their IT budget on a monthly or even weekly basis. But to do this effectively, tech and finance leaders need complete visibility into their tech spend and the value it brings.

TBM delivers that visibility – and the outcomes we’ve seen TBM create are often dramatic:

  • Financial management – 3-5% more effective budget optimization, real-time insight for better decision-making
  • Cloud transformation – 25% faster migration decisions, 30% better optimized SaaS and multi-cloud
  • Digital innovation – Planning time cut by 80%, constant product delivery at scale

TBM gives IT and finance leaders confidence on a level not seen before. It allows you to run IT like you run a business, accurately assessing the costs of an investment and plotting them against the value it will deliver. With that information, you can instantly see whether it’s the right opportunity for you.

Tackling TBM with Serviceware

Serviceware’s answer to TBM is the Digital Value Model, enabling CIOs and CFOs to make a data-driven assessment of the value created by their IT services and investments. This solution combines an optimized TBM model with a comprehensive set of best practices to enable a holistic view of your organization's people, processes and data across all IT services.

Whether you are just starting your technology business management journey or looking to optimize a current TBM approach, get in touch with our experts today.

Sam Wilson

Written by Sam Wilson

Sam Wilson is Head of International at Serviceware SE, a leading enterprise management software company. Serviceware provide solutions to digitalize and automate service processes, enabling companies to improve service quality and efficiently manage service costs. Sam has 10+ years of international experience in enterprise IT and IT financial management and has helped many global organizations realize value through their IT investments over the years.

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