The role of IT is constantly evolving and growing; its influence in a business’s success has become much more than just a background support system. Initially viewed by many as a support function or cost center, IT has proven its ability to help keep a business running (Lutchen, 2004).
To fully take advantage of the work IT does, you must run it as a business (Overby, 2004). Incorporating Technology Business Management framework (TBM), companies can move away from legacy habits and shift towards a revolutionary and effective practice. TBM was founded on transparency of costs, consumption, and performance. It actually focuses on using common business management practices and applying it to IT. Utilizing this methodology, efficiency will improve and business value will be added. Most importantly is that TBM “connects everything your people do to business outcomes,” (Tucker, 2016, 11). Through following TBM, it will be clear that some major changes for those outcomes are needed surrounding transparency, value, collaboration, strategy, and innovation.
Transparency is a major theme in multiple texts surrounding TBM. “Fact-based conversations and data-driven decision-making are the core elements of TBM,” (Tucker, 2016, 14). Through providing transparent pricing to customers it breeds brand loyalty, improves customer satisfaction, and puts facts into “meaningful contexts for decision makers,” (Tucker, 2016, 16). Through sharing your costs internally as well as externally, you empower your staff to make value-based decisions and help to speed up initiatives that are important to your business. Transparency also holds IT accountable for their actions and choices, causing them to be more likely to try harder and fix problems quicker.
Focusing on value and outcomes should become the technique used by IT (Tedder, 2018). Traditionally IT has focused on activities and may have shied away from sharing their costs publicly as well as performance for fear of rebuke. “If you look only at costs, you can get angry pretty quickly,” (Woods, 2009). Technology and its accompanying costs have increased, but with it IT’s value to a company. Rather than just focusing on the costs, it is important to view the link between IT and business activity (Tucker, 2016). Understanding how IT impacts business helps not just IT but the whole company. IT is dangerous to view as a separate entity rather than a part of the business when it comes to costs. Running IT like a business means IT must have “strong financial and business acumen,” (Tedder, 2018). IT should strive to keep track clearly of where it spends its money, and how the costs of equipment and services can be reduced. Furthermore, IT should have a strong understanding of how the business makes its money, and how they can add to that value (Tedder, 2018). A technique suggested by TBM is to ask why costs are higher or lower rather than how much you should be spending on IT. This information is actionable and allows staff to see what is needed to improve value
Working together as a team within the company is another factor that should be considered. Multiple aspects of TBM is about collaboration and sharing the burden of decisions within IT. Ensuring that IT folks are included in the decision making process or given as seat at the leadership table can help the entire organization. Through including IT communication as an important aspect within business IT is treated as a peer rather than an afterthought. The act of transparency helps to inform decision makers and empowers distributed decision making. Giving staff the facts needed to make decisions creates a culture of empowerment (Tucker, 2016). Combining the business, finance and IT departments is not an easy task. They use different verbiage, methodologies and mindsets. However, empowering them to work together and giving them tools to be successful is a great step. One of the tools to help all parties be empowered to run IT as a business is the Technology Business Management model and tools.
There are available tools and methods for TBM that support companies bridging the gap between business and IT. First there is a framework that is a helpful tool for “exploiting the disciplines of investment portfolio management, cost transparency, and business demand management,” (Tucker, 2016, 28). The TBM framework assists with decision making for enhancing the business value of a technology portfolio. The TBM framework has ten aspects as described in the text Technology Business Management (Tucker, 2016). This template assists IT in improving the running of the business as well as change management for the business. Doing so can achieve a greater business value based on the goals of the company.
Another useful tool is the TBM taxonomy that helps to classify the language and structure of business, IT and Finance to get all parties on the same page. The TBM council has seen great acceptance across different industries due to the different guided models. TBM is a helpful place to start for IT leaders who plan to manage IT and shift it towards a business focus.
Using innovative IT methods helps to transform business. Focusing on IT as a business rather than using a legacy model of traditional methods enables business agility, greater innovation growth and competitiveness. Rather than using a project centric approach, it helps to use a business centric method. By doing so, businesses have a more comprehensive overview of costs, can manage investments with a service-oriented approach, fund an innovation program and drive shared investments (Tucker, 2016). Innovation is often a goal of companies. However, it is many times viewed as a hypothetical or far future action, rather than the immediate and available now. Technology is constantly evolving and methods are changing. Keeping track of the trends and new methods helps a company use innovation in a less jarring way. Leaders need to encourage innovation and be willing to spend money for innovation outside of the regular IT budget (Tucker, 2016). Investment in innovation is an important step for running IT as a business.
There are some barriers and obstacles that businesses will face when shifting IT from a cost center to a business partner. One challenge is time. It takes time to “reconfigure IT as a business” and is listed as a top barrier according to a survey (Overby, 2004). Another obstacle is cultural resistance. “A change in how IT operates could affect the nature of people’s daily work across ever y area of a company,” (Overby, 2004). The unified and standardized use of IT may feel like a loss of control for those who had their own ways of interacting with IT. But this can be overcome by setting clear expectations, goals and roles. Additionally, the transparency of IT can be an issue showing the flaws openly. However, it should be noted that many times “IT folks work harder on fixing their flaws when they are visible to others,” (Overby, 2004). Finally, the barrier of finances can be difficult to face. Providing a budget for IT is easier when IT is transparent, clearly documents and shows where they are making value, but it is less clear when starting out and the data is not readily available. Allowing for a slow start in the transformation from business to IT is necessary as there are many moving parts to keep track of.
Without running IT like a business, companies will not meet their full potential. It is not an easy task, but the challenges are worth the reward, when all aspects of IT are well planned, marketed, and financially accounted for, IT is a fruitful business partner. For leaders hoping to grow their company, there are many aspects needed to be taken into consideration and using the TBM is a great place to start. IT’s reputation has been damaged over years of mismanagement, and it will take a lot of work to switch IT to a business partner. This mindset may be challenging for folks in IT as well as others in the company, but it has been shown to help grow company revenue, improve customer satisfaction, support IT staff performance and enhance quality assurance.