For those outside the IT world, technology procurement can be confusing, making it harder for those in charge of purchasing and management to justify how things are being done.
Technology Business Management (TBM) is a discipline that hopes to change that, and other states have begun requiring something along those lines for transparency's sake. Now several California state government agencies are jumping on board.
The California Public Employees' Retirement System (CalPERS) is one of those entities, having adopted the data-driven strategy in 2016.
“TBM is a common framework and discipline for managing IT organizations as a business and maximizing the value of IT spend,” CalPERS spokeswoman Deborah Reyman wrote to Techwire. “Through cost transparency and standard taxonomy, it provides the means for IT and business partners to understand the costs of IT and collaboratively align spend to value.”
CalPERS uses software from Apptio, which the nonprofit TBM Council refers to as “a SaaS platform that allows you to more easily practice TBM by providing real-time visibility into tech spend and usage.”
CalPERS wanted to find a way to speak the same language as tech, business and consumer.
“CalPERS is using TBM to manage and communicate the cost and value of CalPERS IT services to our business partners,” Reyman wrote. “Our challenge was explaining the cost of IT in business terms rather than in technical jargon (e.g., server costs, network costs, etc.).”
“We didn’t call it TBM, we called it enterprise portfolio management back in the previous decade,” said Dale Jablonsky, West Coast advisory director for KPMG, said while serving on a panel last week at the California Public Sector CIO Academy. “This was never an option when I was growing up as a CIO. Cloud wasn’t ready yet. The commodities of IT are what you should be worried about.”
Those commodities are among the categories analyzed under TBM. Others include people, process and how to choose technologies.
“We’re up to eight or nine pillars now, of what really needs to be managed. Governance is in there; there’s risk and compliance,” Jablonsky said.
Gaining visibility and being able to fine-tune the labor, materials and programs involved in a department’s IT projects and operation is meant to optimize resource use.
“The idea behind TBM is to get a hold of the levers to do something with, once you get transparency. It’s transparency to fix,” Steve Bates, principal of advisory services for KPMG, said at the CIO Academy. “I want to make sure that the things I’ve already placed bets on pay off.”
The IT COST Commission, a private- and public-sector group under the TBM Council, has been focusing on bringing private-sector practices to the public sector, especially as transparency regulations increase at the state and federal levels.
CapPERS' Reyman explained: “We are able to accurately map our general ledger to our IT costs and then to our services and business layers. This allows us to communicate those costs in a way that is directly applicable to the business.”
According to Jablonsky, the state Department of Finance is considering combining TBM with its Fi$Cal turnover. He also said Caltrans is watching CalPERS' experience for information about how it could improve.
When CalPERS started the model, it was under scrutiny from the media and stakeholders.
“You’re going to shine a light on us,” Jablonsky said of criticism when he began using TBM as CIO of CalPERS. “Yes and it’s going to make us better. ... Being transparent instills discipline.”
