The Intersection of Technology Business Management and IT Sourcing – What You Need to Know

By Jeff Muscarella

EVP, IT Spend Management Services, NPI

January 22, 2015

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I recently attended the Technology Business Management (TBM) conference in Miami, FL. Some of you may think “Okay, but what is Technology Business Management?”

TBM is a new paradigm for thinking about how IT operates and serves the business. Said more officially by the TBM Council website, "Technology Business Management (TBM) provides a practical, applied discipline for maximizing the value of the IT investment portfolio by enabling technology leaders and their business partners to collaborate on business aligned decisions. Relying on transparency, TBM defines a foundation for managing supply and demand by enabling financial and performance trade-offs needed to optimize run-the-business spending and improve change-the-business investments.”

TBM is the brainchild of Apptio, the leading backer of the TBM Council and the creator of the activity-based costing software used to enable TBM. In addition to developing the software platform needed to enable TBM principles, Apptio is also supporting the development of the ATOM cost model, which aims to help companies define standard ways for mapping IT costs to business services.

Now, many of you in IT sourcing may be a bit skeptical about this new buzzword and its merits. But, if you read the description closely, you’ll notice key words like “maximizing the value of the IT portfolio,” “transparency” and “managing supply and demand.”

Sounds a lot like strategic sourcing, doesn’t it? Also of note are the caliber of companies adopting and championing TBM. The Coca Cola Company, Morgan Stanley, Visa and even MIT are getting involved in developing standards, processes and educational materials for TBM. Ultimately, TBM’s goal is to allow business users to easily select from a menu of services provided by IT and easily know and understand the costs and capabilities associated with them in common business terms. It’s also designed to change the conversation between the CIO and the rest of the C-Suite – speaking in language they understand.

So, what does this mean for IT sourcing? For starters, find out if your IT department is using or considering Apptio. Many of our clients are, and IT sourcing is not always included in the decision or as a potential user of the solution. Why is that important? Well, two of the greatest challenges we see IT sourcing face are spend visibility and IT vendor management. TBM’s focus on transparency helps address both of these issues and allows sourcing to join the business discussion in companies. It’s our belief that IT sourcing can and should play an important role in organizations that have decided to embark on the TBM path. Today typical stakeholders include IT, finance and executive row. It’s time sourcing join the mix!