Implementing TBM can bring into question some well-established organisational practices, and one of the most complex to plan for and manage is the question of cost accountability.
Before implementing TBM it is normal for an organisation to be structured with straightforward hierarchical accountability for cost, with a manager having complete control of all of the expense managed in their structure. The provision of Products or Services in this case often sits within the same rigid structure, and there is little opportunity or incentive for cross-functional cost management or saving.
TBM might change this view, as the manager of a Business Service or Infrastructure Service would appear to have accountability for the end-to-end costs of their deliverable, regardless of which other manager originally owns the cost in their Cost Centre.
How do you deliver this apparent change in financial accountability if you switch to a Service rather than Cost Management view? The options include
- keeping acccountability aligned to the original Cost Manager, but that reduces the effectiveness and authority of Service Management.
- switching accountability to the Service Managers, but that is very challenging to deliver at the same time as implementing Services.
- running both at the same time as a matrix, with overlapping targets and incentives across the disciplines.
I would advocate the last of these, but this also needs careful management as the apparent reduction in accountability for the Cost Managers, which they have worked for over time, is something that can cause significant friction. The alternative, of making the same people Cost Managers and Service Managers can be an option, but needs to take into account that there will be a bias against the necessary changes that TBM should bring.
More on this topic can be found in Practical Technology Business Management.
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