TBM success stories: Improving the value of IT

CIOs are turning to financial analytics to automate technology business management (TBM), a framework for aligning the value of IT services with the cost to produce them.

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CIOs have long struggled to quantify the value of IT services relative to production costs, a financial black box that sows distrust between the tech department and business divisions. As IT implements additional digital capabilities in service of the business, this disconnect is widening, inspiring more CIOs to embrace technology business management (TBM), which largely comprises financial management software aimed at documenting the value of IT services.

TBM isn’t new. For years, IT staffs have crafted spreadsheets to chart the time saved and cost to produce an IT service. If a business peer asks for the information, CIOs share the corresponding spreadsheet. But the share-a-spreadsheet model is hardly sustainable in an era where business executives expect to view metrics and charts on a computer, tablet or smartphone.

Spending on IT financial management (ITFM) tools is expected to grow at an estimated 19 percent compound annual growth rate over the next five years, according to researcher Gartner. But Apptio, the undisputed 800-pound gorilla in a market that includes Nicus Software, ServiceNow and Cloudyn, boasts dozens of large enterprises.

The company, recently acquired by Vista Equity Partners, offers a SaaS solution that automates TBM, eliminating the onerous task of typing financial metrics into a spreadsheet. The software has helped IT leaders eliminate redundant applications and other legacy tools that have accrued over years, shaving hundreds of millions of dollars in sunk costs.

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