Written by Kevin Heisey
on July 21, 2022

Across organizations today, nearly every business process leverages technology. Low-code and no-code, Cloud-based Software-as-a-Service (SaaS) tools can be easily accessed and purchased by anyone in the organization. IT and Business are now interdependent and no longer exist in separate silos and, as a result, the framework for maximizing the business value of your organization’s IT assets need to reflect this.

Technology Business Management (TBM) is a framework created for this new reality that seeks to transparently communicate the value digital resources provide and their associated costs in terms that are understandable from the Finance, IT and Business perspective. It provides the data-based information needed for leaders to collaborate on business decisions and optimize technology spending.

Shadow IT
Shadow IT – broadly defined as technology services that IT doesn’t know about, manage or control – serves as an example of how organizations are benefiting from TBM. SaaS spending has exploded, to the point that Gartner predicts it will reach $145 billion by the end of 2022. Most SaaS spending is happening outside of IT and is the main driver of Shadow IT. As they implement TBM, organizations are discovering significant expenditure in technology procured and managed outside of IT’s umbrella.

The challenge is that as SaaS becomes more accessible and easier to purchase and use, Business Stakeholders buy tools that aren’t initially thought of as traditional technology purchases. IT is unaware of the purchase, and the business unit is unaware that what was purchased should be considered IT. The challenge is less about who has control over technology spending as much as it is about having a clear view of technology spending across business functions and using IT to optimize business value. In that sense Shadow IT is a by-product of the reality of the rapidly growing, easily accessible technology throughout all organizational functions and the need for new frameworks to understand and optimize technology spending.

Leveraging TBM for Visibility and Value
TBM can be leveraged so organizations gain transparency and a shared understanding of their total IT spending and, from that, they can transform IT from being seen as a cost center to a driver of business value. Capturing the total cost of technology throughout your organization provides a starting point for reducing IT run costs through integration and eliminating redundancy freeing up funds that can then be allocated to growth-oriented projects.

Shadow IT can be eliminated by directing technology purchases through appropriate procurement channels. Then, rather than taking a provision on-demand approach where a Stakeholder has a need, an available tool meets the need and it is requested and purchased, the IT team can turn to the holistic view of costs and capabilities that TBM provides and more effectively vet requests. They can readily see if the organization already possesses a capacity to meet that need with existing technology assets. If they have the capacity, they not only save by avoiding redundant purchases, but they also save time by providing the needed services immediately. Teams don’t have to wait for approvals and funding and can get what they need faster.

As organizations increasingly adopt Agile and Product approaches, they are structured around value streams that transcend traditional organizational boundaries and include Operational, Technology, Product and other Business Stakeholders. TBM provides a transparent picture of technology spending and a common taxonomy understood by stakeholders across traditional functions so they can have fact-based value conversations that provide visibility that eliminates Shadow IT, reduces costs and empowers decision makers with the right data to make better decisions more efficiently.