As organizations shift from Project to Product and scale Agile, they require new frameworks for funding value streams and measuring value delivered. When projects were contained within entire departments with end goals determined by timelines, resources and financial budgets, it was much easier to understanding funding and account for value delivery. With an Agile Product approach, resources and tooling are combined across collaborative, cross-functional teams and Program Increments. Agile teams work in Sprints to release Minimum Viable Products, establish feedback loops with customers and then iterate to learn and improve products as they are developed. Accounting and control for business decision makers are not as straightforward when work is distributed across functions and iterations, driven by learning about and solving unique problems and adjusting along the way towards achieving optimal outcomes.
Technology Business Management (TBM) is a value management framework developed in response to the inherent differences between traditional and technology-based projects. It is a framework that transparently communicates the value digital resources provide with their costs in business terms that can be understood from the Finance, IT and Business perspectives. TBM provides technology leaders with a data-based shared understanding of IT spending and the value it delivers.
With a shared understanding and single source of truth, technology leaders can effectively collaborate on the trade-offs and decisions that arise from value conversations that draw out tradeoffs between cost, consumption, capacity, performance and risk and address the questions:
- Are there opportunities to improve efficiency without impacting service quality?
- Is a SaaS offering a better fit versus what you can do internally, on-premises?
- Should we engage with a third party to rationalize technology initiatives and manage risk?
- Does a proposed new application or service add business value?
TBM allows CIOs to illustrate how user demand shapes the cost of the IT resources they maintain, and non-IT business leaders can use the same insights to guide their demand for and consumption of IT resources. TBM tools allow for benchmarking and comparison of unit costs of technologies over time or from one business unit, vendor or data center to another connecting technologists and business leaders in ways that accelerate and increase value delivery based on improved collaboration and transparent, fact-based decisions.
The value of TBM can be illustrated through a common challenge facing organizations moving into the Cloud. A big draw of the Cloud is the promise of lower cost for greater performance and flexibility, but that can be derailed by failure to effectively monitor and turn off your services when they are not being used.
A transparent, shared view of actual Cloud spending tied to value delivery gives decision makers an understanding of how to optimally provision Cloud services and the total cost of ownership that can be compared to on-premises solutions or other alternatives. From there, IT and business can work together with a shared, fact-based understanding informing their value conversations and decision making to optimize their use of funds, align technology spending to business priorities and deliver customer value.