#22. So you do FinOps for Cloud 👏. But what about the Business Value for the Rest of IT? — Consider TBM.

A company without an IT department belongs only in a 70s movie. Now though, the nature of most businesses has changed radically, with IT becoming the business itself. What does that mean?

When was the last time you went to an agency to book a flight ticket? Where do you buy your gadgets—in department stores or online? Do you wave for a taxi on the street or book an Uber? The list goes on. Even if you maintain traditional business operations, customers now expect companies to have an online presence or some form of digitalization. As a result, IT budgets and strategies are paramount to the very existence of the business. IT is no longer merely a business cost—it's becoming the business itself.

If you are a CIO, your job is likely all about connecting the cost of IT to business value. That being said, today we have frameworks like FinOps which aim to connect Cloud costs to business values. However, we know that Cloud is only a subset of the total IT budget, so what can help you make IT decisions that drive your business successfully?

💡 Technology Business Management (TBM) is a discipline that improves business outcomes by giving organizations a consistent way to translate technology investments to business value. — TBM Council

The Problems Technology Business Management (TBM) Solves

Should we migrate to Cloud? Should we optimize our operations in the data center or migrate to Cloud and hope to reduce the costs? We've calculated that cloud migration would cost $5M for the first year—is that a good or bad investment?

→ TBM provides full visibility into IT costs, helping you evaluate both opportunities from an objective perspective. You can now benchmark both proposals and weigh the options.

Justifying Cybersecurity Investments. Your company faces increasing cyber threats but struggles to justify the cost of enhanced security measures to the board.

→ TBM will help you understand the the total cost of ownership (TCO) for specific IT services or applications, hence it quantifies the potential financial impact of a data breach, including regulatory fines and repetitional damage. Now we measure IT investment as business value, namely protecting customers data and maintain business continuity.

Should we launch a new Mobile App? IT resources are stretched thin, so we need to prioritize investments and align them with the app's success.

→ TBM shows the link between IT investments and the app's projected revenue and customer acquisition. It helps prioritize projects based on their impact on the app launch, enabling us to focus on business opportunities according to the available budget. Additionally, TBM provides data to track the app's performance and measure the return on IT investments.

TBM and FinOps have Similarities

If these scenarios sounds similar to what FinOps achieves, then you are right, they are similar.

• Both TBM and FinOps aim at providing cost visibility, improve financial accountability and optimize technology spending and hence “maximizing the business value”.
• They both have operate at different maturity levels
• They both connect different audience (personas) to drive business. These are typically business, finance and engineers.

The main difference is that FinOps is concerned about Cloud spend while TBM covers the entire IT costs. In fact, FinOps is considered a practice of TBM.

How does TBM Work?

Just like FinOps, TBM aims to bridge the gaps between business, tech and finance. This is achieved by standardizing a common language between them. This is known as the TBM Taxonomy.

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Now that we have standardized the terminology, we can connect the technology to business values. This process is well defined in the TBM Model, which is the data-driven method for mapping and allocating costs and resource consumption from their sources to their uses.

Just as in FinOps, TBM helps CIOs to measure, improve, and communicate business value through key performance indicators (KPIs) known as TBM Metrics.

Finally, you don't want to do all this work manually. TBM should operate with a TBM System, which is an enterprise management software, data, and model that automates analytics and processes to manage the technology business.

Summary

If you are already familiar with FinOps, you should also learn about TBM. TBM helps organizations make informed decisions about their IT business by providing a consistent way to translate technology investments into business value.

FinOps is a subset (or a practice) of TBM, hence there are many similarities between them. This article gave a glimpse of why you need TBM and how this practice is delivered.

Finally, please leave us some comments if you're interested in digging deeper into these topics or if you'd like us to publish more articles about TBM.

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💡 All pictures and references were taken from the TBM Council website and a book by Todd Tucker “Technology Business Management —The Four Value Conversations CIOs Must Have With Their Businesses”

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