An Introduction to Technology Business Management TBM Presented

An Introduction to Technology Business Management (TBM) Presented By: Peter Wilson Senior Fellow ICF February 13, 2018

Topics We Will Cover • What is TBM? • The TBM Value Proposition • The TBM Framework • The TBM Taxonomy • Sample Metrics and KPI’s • Federal Adoption of TBM 2

What Is TBM? • Technology Business Management (TBM) is a valuemanagement methodology to provide IT cost, consumption, and performance transparency. • Initiated in private industry and adopted by Australia, OMB has included TBM into the FY 19 budget formulation process • Per recent A-11 and CPIC guidance, TBM has 4 taxonomy layers (Cost Pool/Sub-Pool, IT Tower & Sub-Tower, Applications & Services, Business Units) and will be implemented in a phased, multi-year fashion. 3

The TBM Value Proposition IT Customers IT Executives Service Managers Project Managers Engineers Investment Managers Understand cost of service Communicate the value of IT Understand cost of service Business Case Rationale Enhanced decision – making Align IT spend to mission need Justification for service cost and performance Rationalize application architecture Drive awareness of the cost of tech services Target costs, actual costs, and run rate visibility Select viable technologies Service modernization impact analysis Provide defensible cost allocations Historical project / performance data Manage consumption Influence mission demand Right size application infrastructure Easier comparisons for cost of service TBM is a framework to manage your IT organization like a business

The TBM Framework Continuously Improve Plan & Govern Run-the-Business Deliver Value for Money Cost for Performance Business – Aligned Portfolio Change-the-Business Investment in Innovation Value Conversation Create Transparency Position for Value Enterprise Agility Shape Business Demand

The TBM Taxonomy https: //www. actiac. org/system/files/Federal-IT-COST-Commission-Report_Accelerating-the%20 Mission_July%2021. 2016%20. pdf. Page 16.

Using Cost Pools Common cost pools enable enhanced analysis

Sample Run-the-Business Metrics & Key Performance Indicators (KPI’s) Improving Cost for Performance Essential Activities Key Performance Indicators Aligning the IT Portfolio § Unitize outputs § Measure volume § Measure cost per unit § Capture how Cx. O’s think IT should be spending to achieve goals § Define meaningful portfolios § Unit cost actuals vs. targets for IT towers § Unit cost actuals vs. targets for business-facing services or applications (what customers see) § % business-facing services meeting service level agreements § Satisfaction scores for businessfacing services § Actual spending against targets for corporate outcomes § Actual spending against targets for business-facing applications § Total spending against targets for each vendor category § Spending targets for TIME categories

TBM Is Being Adopted Incrementally • OMB is aligning Capital Planning and Investment Control (CPIC) to the TBM taxonomy • IT leaders anticipate a multiyear adoption path • The Federal government will not take a “big bang” approach • TBM value requires active support by stakeholders

2019 Capital Planning & Investment Control Guidance • In the FY 2018 IT Budget OMB introduced two standard investments: IT Security and Compliance and IT Management. • These investments align with IT Towers in the Technology Business Management (TBM) Framework. • In the future, Federal IT budget data aligned with the taxonomy will become the basis for the IT Capital Planning and Investment Control process.

Thank You! Questions?

References • http: //www. tbmcouncil. org • Tucker, Todd. Technology Business Management: The Four Value Conversations CIOs Must Have With Their Businesses. TBM Council. 2016. • Coyne, Kevin. Technology Business Management (TBM) Overview. 2017. • Federal IT Cost Commission. Accelerating the Mission: Recommendations for Optimizing Federal Technology Cost and Value in the Age of FITARA. TBM Council. 2016.