Estimated reading time: 5 minutes
TBM Council of the Technology Business Management Council, is a discipline that improves business outcomes by giving organisations a consistent way to connect business value to technology investments. Its regional VP, Ben Allard, talks to EITN about ICT spending, and organisational need to make decisions at speed.
EITN: According to your description, “increasing complexity in IT spend means that IT executives can no longer rely on spreadsheets and disjointed procedures for the analysis of their spend on IT management and cost accounting.” What is the present situation, and what are the issues that organisations are facing?
Ben Allard: ICT spend is accelerating as companies act with urgency to improve customer experience, products and services and ability to innovate. Although IT spend is only increasing by +1.8% in Southeast Asia (Gartner), requiring CIO’s to do more with less. IT executives need to be armed with real-time insights into where spend is misaligned with strategy and efficiency opportunities, so they can shift funding from run to innovation.
Spreadsheets and disjointed processes inhibit an organisation’s ability to make decisions at speed – identify insights, evaluate scenarios, adjust forecast and track the impact of their decisions.
EITN: Please elaborate on the regulatory accountability that organisations must confront. Is this a rule that applies to all regions? What are the possible nuances/differences?
Spreadsheets and disjointed processes inhibit an organisation’s ability to make decisions at speed – identify insights, evaluate scenarios, adjust forecast and track the impact of their decisions.
Ben Allard: Many organisations, particularly banks, are required by regulators to track inter-company agreements and transactions between legal entities. For example, ICT shared services provided by an entity in Asia to their HQ in US or Europe. These rules apply to all regions but have nuances by industry and size of business. The inability to provide transparency and traceability into these transactions and respond to regulatory changes in a timely manner may result in heavy fines or constraints being places on business growth.
EITN: What exactly is TBM? How can it assist organizations in dealing with their existing spending management challenges?
Ben Allard: Technology Business Management (TBM) is a discipline that gives organizations a consistent way to translate technology investments to business value. At its core, TBM brings IT, Finance and Business leaders together to ensure technology spending is aligned with business goals, identify waste, prioritize investment in innovation and agility to respond and adapt to new business opportunities and threats. TBM is adopted by leading organisations around the world, including 60% of the Fortune 100. The discipline continues to evolve to help organisations accelerate their adoption of new operating models that include cloud, agile, DevOps and shift from projects to products.
EITN: How can executives balance business demands while prioritiaing revenue development, as well as how Apptio’s IT financial management solutions assist enterprises in analyaing, managing, and optimiaing the cost and value of their IT spend?
Ben Allard: Apptio provides executives with visibility into their spend and breakdowns that include run vs grow vs transform vs innovate. Combined with an understanding of cost to serve by product and demand metrics such as number of residential home loans executives can identify opportunities to shift funding on run or business as usual to innovation that supports revenue growth.
Apptio’s SaaS solutions include IT Financial Management capabilities that include cost transparency, budgeting and forecasting, billing and demand management. These capabilities are integrated in an end-to-end solution that empower executives with the data to continuously optimise and ensure technology investments are aligned with business strategy. Customers can adopt these capabilities in a modular approach to ensure rapid time to value in 30-90 days.
EITN: How can IT finance management assist businesses in increasing transparency and successfully communicating their company value?
Ben Allard: One of the core challenges businesses face with increasing transparency and communicating the value of technology is an often-endless debate with stakeholders on what defines a business application, how to calculate the total cost of ownership and translate cost to business value. IT Financial Management and the TBM taxonomy eliminates this debate by providing businesses with a standard that guides customers on what data to gather, how to organise and calculate TCO. The resulting transparency empowers IT, Finance and Business stakeholders with the data and insights to communicate value and expose opportunities where cost and value are misaligned.
An Asian bank that adopted the Technology Business Management (TBM) industry framework, powered by Apptio, was able to identify 1,200 unused or excess service numbers, communicate the cost of this waste to their respective business partners and cancel these services in the first 30 days.
EITN: In terms of technology spending, what lessons have tech businesses learnt from the pandemic, in your opinion?
Ben Allard: The pandemic forced businesses to rapidly adjust their technology spending to fund innovation and deliver the digital capabilities their customers demanded. Businesses quickly came to the realization that their existing processes, tools and practices did not provide them with the agility to respond to unforeseen business or market conditions.
The businesses that had invested in enhancing their IT Financial Management capabilities prior to the pandemic were able to react faster, adjust supply to match changing demand and shift funding to innovation. This included the accelerated use of cloud technologies procured on demand, continuous cost optimisation, adoption of lean portfolio management practices to prioritise investment decisions and shift to product operating models where product owners are more accountable for funding decisions.
An Asian bank that adopted the Technology Business Management (TBM) industry framework, powered by Apptio, was able to identify 1,200 unused or excess service numbers, communicate the cost of this waste to their respective business partners and cancel these services in the first 30 days.
