Post authored by Jason Byrd, Managing Director, CIO Advisory, KPMG - a TBM Council Alliance Partner.
With digital disruption, cyber security risks and the “as-a-service economy” driving IT to new level of prominence across the executive suite, it’s no surprise that the discussion is finally shifting from IT spend to IT value. It was against this backdrop that sessions during TBM Conference 2016 included, “TBM: A Differentiating Force for Change”, “Under the Hood: Improving Speed, Agility & Efficiency When the Future is Now”, and “High-Velocity Innovation: Accelerating Development in Today’s Data-Fueled Digital Economy.”
KPMG’s session, “The Six Habits of TBM Success”, was based on our analysis of the responses to our 2016 TBM Proficiency Survey. The survey, conducted among more than 200 IT, finance and business executives in 170+ global companies worldwide, sought to identify the key factors for TBM proficiency, and evaluate how much they matter in the success of implementation of TBM disciplines to create value from IT.
As expected, the survey results confirmed what TBM advocates already knew: that TBM significantly helps CIOs and IT leaders gain a full view and deep understanding of their IT services’ cost and performance. Through deep analysis of the responses against our TBM Proficiency Index, we identified six unique sets of behaviors that enable TBM Leaders to successfully reduce IT operating cost while increasing spend control, articulate the business value of IT, and keep technology cost structures from impeding business responsiveness.
So, what are the six habits of TBM success?
1. The power of service clarity
The right place to start is investing the time to define and publish your technical infrastructure services – e.g., data center, compute, network, and end user computing – as doing so will drive clear visibility to align cost allocations to each service. Our research shows that clearer technical service offerings boost your likelihood of TBM success by a factor of six. And aligning your IT services to your service catalog can make your four times more successful.
2. Collect and maintain the right data
A well-defined process for improving data quality is a critical part of your TBM journey, as data equals credibility. Your focus should be on data to support transparency. While you don’t need perfect data at the outset, you should build a sustainable process for improving data quality. Analysis of our survey results demonstrates that this can make you 10 times more successful in your TBM initiative.
3. Industrialize TBM tools
There are purpose-built, TBM-enabled tools and toolsets available to sustainably manage and maintain a TBM transformation, and TBM Leaders rely on them, rather than spreadsheets. Our survey showed that organizations increase their likelihood of success by a factor of six when they moved financial management and reporting from spreadsheets to a commercial application or platform designed specifically for TBM.
4. Build the right skills and processes to sustain the TBM journey
Our survey data shows a possible 11 times increase in success with a blend of IT and business knowledge to articulate IT value in terms that business partners understand. The key here is having the right people/skills, governance and processes in place. Required skills include the ability to: simultaneously speak the language of business, finance and IT; provide business partners with information on the trade-offs between service costs, quality and performance; and manage service capacity in response to changes in business demand to IT supply.
5. Conduct periodic reviews of IT portfolios
TBM leaders regularly review their entire portfolios – at minimum quarterly – to use the accuracy of cost transparency as a foundation for cost reduction and service quality optimization opportunities. A disciplined review process driven by focused performance assessment and remodel goals is a critical enabler to moving across the continuum from cost data to cost visibility and insight to business value. According to our survey, regular reviews can multiply your likelihood of success by a factor of five.
6. Put the CIO or CFO in charge of TBM
Our survey data shows that TBM initiatives are four times more likely to be a success if your CIO or CFO is in charge and responsible for TBM outcomes. The CIO tends to be the more natural owner, as movement of the CIO role into a more transformation business leader aligns to TBM’s purpose as an enabler and accelerator of technology-driven business transformation.
Organizations of all sizes and types of operating models can achieve TBM success and deliver true business value from IT. By embracing the above habits at the beginning of your TBM journey, your organization can too.
To learn more about these habits, please read KPMG’s Technology Business Management Proficiency Assessment Global Report 2016.
If you’re interested in taking our TBM Proficiency Survey – which is now part of the on-boarding process for the TBM Council of newly registered organizations – you can access it here.
About the Author:
Jason Bryd is a Managing Director in KPMG’s CIO Advisory practice, focusing on IT Financial Management and Technology Business Management. Responsible to sell and deliver transformational projects helping clients through their TBM journey. Manage a team of consultants and individuals in the KPMG Solution Deployment Center for Disruptive Technolgies. Develop and publish TBM thought-leadership. Facilitate the development and management of the various TBM toolkits. To contact Jason directly, please email jcbyrd@kpmg.com.