Consulting T2 - Benchmarking TBM

Measuring the (Sometimes Hard-to-Measure) Business End of IT

For large enterprises, the impact of Information Technology (IT) reaches far and wide, but it can be difficult to measure its ripple effect, especially when it comes to return on investment. That’s where Technology Business Management (TBM) can help. TBM provides the insights that enable C-suite executives to measure and manage the business of IT.

TBM brings the back end of the IT department – the programming, networking and systems management – closer to the front end. It captures the costs, the strategic value to the rest of the business and the ways IT drives meaningful transformation, not just within IT itself, but throughout the entire company.

Gaining visibility into those IT costs starts with benchmarking and cost transparency. Such transparency brings IT out into the open so that it is not simply a support function with internal clients, but, rather, a contributor to the company’s strategy, growth and success.

IT benchmarking has been around since 1979 with the creation of a company called Compass, which became recognized as a leader in the field and was later acquired by ISG. Since that time, benchmarking has become widely used as a catalyst for understanding and managing a company’s technology spending.

While companies today often include benchmarking as a routine “check-the-box” item on the list of annual tasks, those that use it to compare themselves against their industry peers and leverage that comparison to drive transformational change are discovering new cost efficiencies, synergies and innovations.

IT benchmarking, at its most basic, provides a baseline view into costs, but, when used strategically, it provides important insights that help an organization understand, plan and transform how they acquire, provide and provision IT services. Using this benchmark, companies can better communicate the value of IT, and better plan for its use. Ultimately, it helps optimize costs and transform the entire business of IT so that it, too, runs like a business.

IT benchmarking has continued to evolve since Compass first introduced the concept. Though some enterprises experienced challenges in collecting and aggregating data, and in effectively developing and deploying strategies based on the output of traditional benchmarking, TBM technology and processes overcome these historical challenges. With TBM, IT can reach its full strategic potential and give the entire business deeper insights into its value. At the same time, IT can gain a better understanding of the broader business and what it needs to succeed and grow.

Today, tools like the Apptio TBM Unified Model™ (ATUM) standardize and align financial information with ISG’s taxonomy to reduce the time it takes to collect data and allow for a fact-based approach to IT strategy transformation. To learn more about how TBM and benchmarking can help you increase visibility and transform IT, read my colleague Alex-Paul Manders’ white paper, Benchmarking along the TBM Journey: How Technology Business Management Builds a Bridge between IT and the Business.  And please contact Alex or me if you wish to discuss the details.

About the author

Steve Hall helps enterprises think through the opportunities and complexities brought about by today’s dizzying array of emerging technologies. He is a seasoned professional, fluent in how to make transformational change with cloud, automation, mobile or DevOps and discerning in where and when they add value. He has helped implement many global service delivery models and advised large multi-national corporations on their IT strategies. Steve co-authored Managing Global Development Risk, A Guide to Managing Global Software Development. As a Partner and member of ISG’s Executive Board, Steve leads ISG’s Digital Strategy and all ISG Service Lines for the Americas. Steve also leads ISG’s Alliance group and is ISG’s Executive Sponsor to the TBM Council.