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IT is a Strategic Weapon

Posted by laplaine Jun 18, 2015

[Note: This article was originally posted to Mental Effort on January 5, 2015.]


Change is afoot.


In a twelve part series I’m going to discuss transforming IT into a catalyst for driving business improvements. I will share my views and approach to this transformation. Topics I’ll cover include: the IT tribe I have been building, the steps I’m taking to change culture, and why a transparent financial model of IT is essential.


It all starts with a simple premise that IT is a strategic weapon. One that should be leveraged for competitive advantage, efficiency, and enable product and service excellence. Technology is not a “means to an end”, it is an essential part of producing, delivering, and consuming products and services. If you produce or consume digital content, IT is both on the critical path and the service offering.


Photo Credits: Chad Horwedel



In 1998 I had the opportunity to fly in this B-17, Aluminum Overcast, one of only 12 air worthy B-17’s left in the world. I’ve been using this photo and caption in presentations to my staff as a symbol of building a strategic weapon for the past 18 months.

The later half of the 20th century brought about the Digital Revolution with the proliferation of the personal computer, the Internet, mobile devices, and cloud computing. Today we live in an economy dominated by digital information and automation. Every industry is being shaped by the Information Age, and every Information Technology (IT) shop needs to update their approach to managing in this era. To stay competitive, progressive thinking technology leaders are adjusting their approach to IT, managing technology like a business versus operating like a traditional cost center.To be successful in this modern age, an IT leader will need to address:


  • Culture: What does this digital shift mean to the IT staff? How do the other business units interact with IT when it is run as a business unit? How do you garner executive support?  How do you address the stereotypical cost center connotation? What happens to your own job?


  • Language: IT leaders need to talk less about technology and more about business. You must understand and speak in financial terms. You need to learn about product management. You need to interact face-to-face with the real customers (the one’s who are sending money to your company, not other internal business units).


  • Transparency: Be open about poor services, deficiencies in procedures, outages and problems to address. Talk about what your doing to fix these things. Share operating costs. Share operating metrics.


  • Technology Trends: What are competitors doing? What is your cloud strategy? [Don’t have one? I bet your internal consumers of IT do (it might be wrong, but they have thoughts here if you don’t )]. What are the disruptive technologies you should be researching?


  • Blocking and Tackling: To be allowed to be transformative, you must get the blocking and tackling covered. If you have chronic outages, capacity shortages, missing alarms, and too many human mistakes, you must address these as priority one. A foundation of operational excellence is required to act as a catalyst for change to rest of the company. Ignoring these issues will allow misdirection to derail your efforts.


  • Vision:  When I ask leaders about their IT roadmap the answers generally fall into two broad categories:
    • No roadmaps exists for our products or services from the GMs and business units, so IT is primarily in reactive mode
    • IT goals are all related to supporting the plans of others, a subservient role in the organization


In my view, technology leaders who are unwilling or fail to address these categories, jeopardize their positions and their companies and will be overtaken by companies with IT leadership that are champions for this modern approach to IT.

In the next post I’ll discuss Technology Business Management, a mindset for formalizing the approach to running Information Technology like a business.


James LaPlaine is the SVP, Technology Operations at AOL. You can follow James on his blog Mental Effort and on twitter @JamesLaPlaine.


In a twelve part series about IT business transformation, James explores the need for the modern technology leader to be a catalyst for change, leverage IT value as a corporate strategic weapon, and lead the way for complete financial transparency. Utilizing this approach, today's technology leader can provide the foundation for the company to build better products and services and gain approval for technology led initiatives that often struggle for executive support and funding.

Data-driven culture is a hot topic. As I was writing my previous post, I came across another article on the topic entitled, "Cabinet Office minister Matt Hancock calls for 'data culture' across government." The article describes how UK Cabinet Office minister Matthew Hancock has called for a “data culture” across government to help make better decisions on where best to spend money on an austerity budget.


Using data to make better decisions on where best to spend money on an austerity budget...sound familiar? It does to us, as it's a popular theme with CIOs who have adopted TBM. During the great recession, most IT budgets were cut, leading many CIOs to use TBM as a way to cut with a scalpel instead of a chain saw.


Even though the economy has improved, IT budgets remain austere. But there is a strong emphasis on improving value and investing wisely to create growth, improve customer retention or cut operational costs. The UK article hints at ways that IT leaders also can do this:


Hancock said the government is adopting an “invest to save” approach, where money is spent only if it delivers savings. He said using big data and data science is critical to making sure the money is spent effectively.


“To have an effective invest-to-save proposition, it’s critical the data demonstrates you’re going to get the savings. This is one of the really exciting opportunities for the use of big data that unlocks these sorts of propositions. You can be much more scientific using data science on the likelihood of how you get success,” he said.


While TBM might not qualify as "big data," it certainly exploits data to make similar types of decisions. TBM integrates costs with the consumption of resources, applications, and services, and often marries those facts with quality metrics. This unique combination helps businesses decide where to save and where to invest.


For an example of this data-driven decision making, Carl Stumpf and his team at CME Group partnered with his tech leaders to use these metrics (e.g., cost, utilization, consumption, satisfaction) to change the way they manage peak demand. Watch him tell the story in this 2014 TBM Award video:



We'd love to hear how others have used TBM to create a data-driven culture. What's the best way to do that? Submit for a TBM Award! If you're a finalist, we'll help you tell your story to the rest of the TBM Council community.

In a recent CSC World article entitled "6 Survival Strategies for CIOs," CTO Dan Hushon writes that CIOs should make data-driven decisions not just about the business but about IT:


"Many firms say they are data driven, but their big data projects focus on customer acquisition. How many perform deep analytics and root cause analysis on their core systems, for continuous improvement? As CIO, you need to put the right metrics behind your progression toward innovation.


"Create a culture that holds itself to a quantitative discipline and establish relevant key performance indicators (KPIs). For example, your goal might be: This year, we’ll spend 30 percent of our time and budget doing something new. If you establish such a goal and can produce results on your investments in innovation, more funding will follow."


This reminds me of an often overlooked fact of TBM: it helps improve data, but not just for managing the business of IT. Instead, by putting dollar amounts on all sorts of data, such as IT assets, CMDB, user entitlements, time tracking, personnel records, utilization data, incidents and more, TBM helps IT improve the overall quality of management data. This has benefits far beyond traditional TBM use cases.


I'll give you an example. One of our Oil & Gas CIO members recently told me how TBM helped improve their user entitlement data. His team discovered that by using entitlements to allocate application costs back to the business units, the business units took notice of their entitlement data. In turn, they helped fix the entitlement errors, such as records that weren't updated after an employee transfer or termination. As a result, the company arguably reduced its risk, improved compliance and made it easier to manage software licenses.


In another example, a Fortune 500 insurance provider CIO found that TBM helped them prioritize their data quality work. By putting a dollar figure on their data, they discovered where to focus. Instead of focusing on data quality problems that represented smaller costs, they focused on those that represented the bigger costs. As it turns out, the bigger costs also represented their most important business applications, assets and labor pools.


Many CIOs tell us their data is bad. They believe this inhibits TBM. But it also inhibits being a data-driven IT organization. No IT leader should think that improving data quality is a TBM problem; it's an IT management problem, and one that impacts IT's ability to deliver efficient and reliable services. TBM helps overcome the IT data quality problem in more ways than one, while providing the more direct benefits associated with TBM.


In our metrics work, we've hypothesized that TBM data quality is an indicator of IT transformation. IT organizations that are well managed, highly automated and data-driven will have good data. In turn, their CIOs foster a data-driven culture. We believe this is more than just a survival skill; executives like Rebecca Jacoby at Cisco, Larry Godec at First American, James LaPlaine at Aol, Debra Bailey at Nationwide Building Society, Carl Stumpf at CME Group and many others use data to thrive in their roles by making a difference for their businesses.

The second European TBM Summit drew a stellar line-up of IT executives from the world’s largest brands including The Coca-Cola Company, Shell International, Bank of America Merrill Lynch, Nationwide Building Society, AXA Investment Managers, Royal Sun Alliance, Citrix and Gazprom Marketing & Trading to London’s stunning Institution of Civil Engineers and Westminster Abbey. An audience comprising over 200 of the most senior IT decision-makers in Europe were treated to a feast of world-class thought leadership delivered by those best qualified to do so, their peers. The slideshow below captures moments from this amazing event.

Delegates heard how and why Technology Business Management was driving wholesale strategic change, some frank discussion on bringing boards along on the strategic journey to TBM and details on the upside for organizations using the transparency of TBM to drive competitive advantage. For those, unable to join on the day, here are some of the highlights:

  • TBM Council President Chris Pick, kicked off proceedings by reiterating the three TBM Council mandates; to educate, build standards and foster collaboration and peer networking. He also announced how key deliverables like the TBM framework, the TBM Index and TBM taxonomy and more were all now available on the new TBM Connect online community.
  • Nationwide Building Society CIO Debra Bailey deployed TBM to support a service and digital transformation. With TBM, Debra has delivered a cost-optimized and tiered service catalogue to give her business partners real choices. TBM enables a more effective supply chain for her as well as a commercial view of innovation spending. Lesson: TBM accelerates service transformation.
  • AXA Investments Managers CIO Hervé Morel-Derocle employs TBM to create an integrated ecosystem for managing all of the business. TBM has also facilitated a culture of shared responsibility on cost and driven teaming across the business. Lesson: TBM helps change the culture to be cost-conscious.
  • Shell Global IT4IT and Cost Performance Improvement Manager Mary Jarrett is driving IT cost optimization and making TBM sustainable based on business outcomes. Lesson: TBM is a long-term initiative with significant gains along the way.
  • Bank of America Merrill Lynch Managing Director Mohit Sarvaiya leveraged TBM to power the bank’s cost improvement initiatives of expense management, volume reduction and IT service delivery. Lesson: TBM helps optimize costs after major business events, such as economic downturns and M&As.

The afternoon breakout sessions provided more in-depth exploration of the practicalities of TBM with sessions on IT Planning, operationalizing TBM within the organization and making it “the new normal”. For those of you interested in our standards-related work, I shared an update on the CIO Business-Value Metrics.

And of course, what started at TBM Conference 2014 and is fast becoming a tradition for TBM Council events, we held a series of PechaKucha-style presentations covering key TBM areas including data, the Apptio TBM Unified Model (ATUM), saving costs without stifling innovation and more.

Apptio CEO Sunny Gupta moderated a panel on Transforming IT for Business Growth with senior IT and Procurement leaders from Gazprom CIO Rob Pringle, RSA Insurance Chief Procurement Officer Andrew Cameron and Citrix VP of Infrastructure & Service Delivery Martin Kelly. They all shared why TBM was important for their businesses, and the importance of getting started no matter how mature your IT organization is.

Discussions continued in the thirteenth century Cloisters of Westminster Abbey, where attendees representing the leading lights in the fast-evolving world of TBM, reflected just how pervasive TBM has become in just 12 months.

I want to once again thank our speakers, who did a wonderful job and are leading the TBM movement in Europe. And of course we couldn’t do this without our partners and sponsors like KPMG, ISG, Cherwell, Deloitte and Ellix. We look forward to seeing you all next year!

As you may have seen, I have accepted a new role with the Technology Business Management Council -- General Manager. This means I'm now responsible for its entire mission which spans delivering Standards, Education and Collaboration for CIOs and their peers on managing the business of IT. It's a very exciting time in my career, and I appreciate everyone's words of encouragement.

Taking this step caused me to think back to how it all began. One moment stands out for me: shortly after our founding the TBM Council as a non-profit organization back in 2012, I assembled a crack team of our principal members to discuss the TBM book and the TBM framework (see picture above). We had 18 PMs there: Chuck Niethold (VP of TBM at First American), Rob Webb (then CIO of Hilton Worldwide, now CIO at Etihad Airlines), Majid Iqbal (principal author of ITIL v3), Joe Rafter (now Sr. Director of Enterprise Change at PG&E), Chris Levitt (formerly CFO of IT at Con-way and now with Apptio), Tony Bishop (now VP of Global Enterprise at Equinix), Josh Sparaga (now VP of Technology Governance at Univision), Dan Cavey (now TBM Consultant at PNC), Susan Blew (then Senior Business Leader at Visa) and many more.


We had a very productive meeting. But what I recall most was the shared sentiment, that we're all in this together. In fact, during our introductions at the start of our two days together, after several executives shared their reason for participating in the TBM Council, Sue said, "I feel like I found a home. This is my band of homies." Of course, we chuckled, but we all felt it rang true: everyone in the group was in a similar situation.

What was that situation that brought us together? They said things like:

  • Value is elusive -- it's not only hard to show value but it's also hard to make the tradeoffs that are needed to improve it.
  • We're a shared resource, but the business consumes IT as if there weren't any limits (i.e., unchecked demand is a problem).
  • After years of cost-cutting, it's getting very hard to find increased efficiencies and yet we're facing top-down budget cuts.
  • We don't have the capacity to innovate so we're seen as the department of no.


To my group of PMs, these weren't just problems for their companies; they were problems they personally wanted to solve. They had (and still have) a passion for fixing them.

We're still working on these problems, but we've accomplished a lot. We ratified and introduced the TBM Framework, published a first-of-its-kind TBM iBook (with lots of videos and rich media tools), launched the TBM Index to measure TBM maturity, and delivered the first ever TBM taxonomy to provide a "Rosetta Stone" that translates between finance, IT and business.  We've also launched a series of work groups for CFOs of IT, infrastructure leaders, strategy and planning professionals and executives in key vertical industries. And after two global annual conferences (plus regional summits), we've grown our general membership to more than 1,650 IT, finance and business leaders.

All of this has made a difference. To see it, just watch the videos of our past TBM award winners. You'll hear how CME Group used facts to reduce the cost of peak demand; State of Washington signed TBM into law to drive the efficiency of agency IT spending; Nationwide Building Society improved innovation and the delivery of shared services to its business and its customers. We've also heard how Kaiser Permanente shifted money from infrastructure to improving teleneurology and neonatal intensive care and First American shifted money to customer-facing technologies as the real estate market picked up again. You can see it's not just about cost-cutting; it's about value for the money and managing both the supply of and demand for IT.

So I'm super proud to be part of this group and to be named the General Manager. I will do everything in my power to keep connecting smart people, capturing the collective knowledge, and helping others apply TBM to address their own challenges. After all, when you join the Council, you join our band of homies.

Membership in the TBM Council is free and open to any qualified IT, finance or business leader who wants to learn more about TBM or contribute to our mission. Please contact me if you want to participate.

“Recognizing TBM leaders at the forefront of institutionalizing TBM as a methodology within their organizations.”


To make a deep impact with Technology Business Management, organizations must evangelize from the inside out. The TBM Champion award recognizes TBM leaders, TBM architects and governance professionals who are leading the TBM initiative by institutionalizing its practices as a methodology and functional role within their organizations. The most transformative TBM leaders apply rigor and expertise to the TBM methodology to elevate and ensure its practices across the business and across time.


The most successful TBM Champions:

  • Educate IT and business executives about TBM and the importance of its adoption; evangelizes TBM through community engagement, such as through the TBM Council.
  • Make TBM reporting a core component of operational meetings, business reviews, annual strategy and planning and other IT or business meetings.
  • Empower IT leaders to make better, faster decisions.
  • Empower business and finance leaders with transparency into the IT costs and consumption driven by the lines of business.
  • Collaborate with business partners to understand their plans and anticipate demand.


The TBM Awards Selection Committee identified the following three finalists because of their impressive display of truly championing TBM methodology over the last year. We are confident this notable trio of nominees are exceedingly deserving of recognition and we’re excited to share why they made the cut as finalists.


The Award Finalists


Comerica: Comerica is among the 25 largest U.S. banking companies, with roughly 9,000 employees. They began the process of transitioning to a service management organization two years ago, starting in IT, with the goal of providing financial insights into services. However, the group was using Excel spreadsheets, which quickly proved inefficient and unmanageable to meet the company’s transformational plans. Comerica knew they needed to operate differently and chose a TBM approach, despite a lack of support from finance. The plan: provide financial metrics for every service Comerica has defined, evangelize TBM across the company, and build successes so TBM is not only utilized but also institutionalized. The results flew in, as TBM was rapidly deployed with across the organization and early success was presented to the executive team. Comerica developed a TBM roadmap that IT presents on a rolling basis to all possible stakeholders in the organization today, ensuring everyone in the organization understands “what the art of the possible is.”


Cox Enterprises: Cox Enterprises, owner of one of the largest cable operators and media groups in the United States, has a diversified business. Currently in the process of becoming a corporate shared services center with five major divisions, it is critical for Cox to understand its costs to serve the enterprise. The company recognized early on that transparency was not the end goal. Rather, it needed to ensure IT spend was in support of business strategies and priorities. Ultimately, TBM for Cox and its divisions became about business and IT alignment and strengthened partnership. TBM was embraced as a new way of thinking about how IT would conduct itself internally. Cox relies on TBM to champion the way IT provides services to its customers, in a common language, while also providing transparency. Today, Cox companies (AutoTrader, Manheim, Cox Communications, Cox Media Group and Cox Enterprises) have become evangelist for TBM both in national and local venues. Professionals within Cox are on the TBM Board as well as principal members who have contributed to the thought leadership of TBM— proving their loyalty to TBM in multiple ways.


State of Washington: Each year the State of Washington spends nearly $1 billion on IT staff, infrastructure, applications, maintenance, and operations. Mandated benchmarking reports commissioned by the Legislature shed little insight into IT spend and performance. So, in 2012, the incoming CIO turned to TBM as a way to meet the Legislature’s requests for transparency. The state set out to work closely with legislators to evangelize the need for TBM and establish the TBM Program within Office of the CIO (OCIO) to bring the state’s separate agencies on board, collaboratively and willingly. Today, Washington State has made valiant steps towards infusing TBM practices into daily procedures. A TBM advisory group was formed to create a strategic roadmap with feasible and achievable milestones along the way; a significant portion of the OCIO website is dedicated to explaining the TBM program; and most notably, TBM is essentially now mandated by law for Washington state agencies— talk about a TBM champion!


After reading about the above nominees, it should be clear that The Technology Business Management (TBM) Awards are recognizing IT and finance leaders for their ingenuity, creativity, and contribution to Technology Business Management. The TBM Champion Award specifically honors organizations who have proven they are the gold standard for successfully implementing TBM practices and we are very proud of this year’s nominees.


If you want to learn more, be sure to check out the TBM Award page here. You can also find us on Twitter at @TBMCouncil and through the #TBMC14 hashtag for all conference updates!


Register here for the only conference focused on managing the business of IT! Enjoy inspiring conversations and sessions from a packed agenda, followed by eventful nights in Miami Beach’s famous Fontainebleau Hotel, October 28-30th.

“Recognizing finance leaders who drive an IT financial strategy that matches the new demands of the IT organization.”


Modern technology leaders are constantly faced with demands to produce more, faster and cheaper —near impossible expectations without exceptional financial guidance. The most successful IT finance leaders are able to create cost transparency and build a flexible IT cost structure that scales with business demands. The IT Financial Pioneer award recognizes CFOs of IT, VP of IT Finance and/or Technology Controllers who don’t simply account for IT spend, but drive an IT financial strategy and capability that matches the ever-changing demands of the IT organization. They can be championed as chief financial officers of the IT organization.


This year’s TBM Conference Selection Committee identified nominees for this award who demonstrated the following characteristics typical of the most successful IT Financial Pioneers:

  • Translating cost data into meaningful perspectives for technology and business decision makers.
  • Informing decision makers of cost, quality, capacity and consumption tradeoffs.
  • Communicating costs to business partners in a way that helps shape business demand.
  • Finding ways to “variablize” IT costs and enabling public and private cloud adoption.
  • Collaborating with corporate financial officers on strategies to fund innovation and growth.


To qualify as an IT Financial Pioneer nominee, it is clear from the list above exceptional accomplishments have been made. The nominees for this award — The Clorox Company, CME Group, and Wells Fargo — have proven themselves in a substantial way and we are honored to recognize each of them.


The Award Finalists


The Clorox Company: As a multinational manufacturer and marketer of consumer and professional products, Clorox embarked on their TVM journey three years ago. They possessed a clear vision: increased financial accountability and improved financial visibility and cost transparency at every level of detail, from infrastructure RUs to application cost by business unit. Prior to TBM, Clorox faced budgeting and transparency issues. To fix the issue, Clorox established a TBM Office (TBMO) with dedicated resources to drive all of its financial packages, including: Budget, forecast, LRP (loan repayment program), variance analysis, projects and SOX compliance. The results were extensive. Clear insight into financials enabled IT to find ~10% percent of cost savings in IT budget, driving that money into innovation. As a follow-up, Clorox requested – and for the first time, received – innovation funds for IT. This money was used to fund innovation in mobile computing for the next generation of workers, and other IT projects.


CME Group: CME Group Inc. is one of the world’s largest options and futures exchanges. While they had been utilizing TBM methodologies for the past decade to create cost models, it had been doing so manually. However, when CME hit a period of expansion in the mid-2000s, spreadsheets were no longer effective. Couple that with the 2008 recession and a change was needed. And by 2009 CME began to look ahead, planning for growth. It focused on a set of core initiatives, including the re-implementation of cost modeling – enabled by TBM technology -- with a specific goal: Change customer behavior, which in turn impacts demand. Today, CME Group began utilizing TBM to determine their actions on profitability. The TBM group created a partnership with the business, implemented a message efficiency program that models order to trade ratios, created a consolidated view of product profitability, and more. Thanks to the metrics enabled by TBM, CME Group is now looking to implement a spatial computing language to change the way that complex, real-time, high volume computations are distributed across a global infrastructure.


Wells Fargo: Technology at Wells Fargo is increasingly becoming more and more relevant to how the company differentiates itself from its competitors. Following the recession, Wells Fargo set out to determine how it could more effectively manage and operationalize its business, including back office functions and they began by utilizing TBM to enable true costing and transparency to alleviate trust issues. Wells Fargo’s approach was layered. They developed an internal system that allowed the IT division to create and manage IT services, created a transparent IT Bill to the respective businesses that consume IT services, led extensive trainings to demonstrate capabilities, and more. Today, Wells Fargo’s data is cleaned up, costs are aligned and services identified; the IT division is able to identify the true driver of cost, resulting in business decisions around consumption and demand; business leaders can now influence IT costs and they are, in turn, better demand managers; and trusted IT cost trending analytics and IT benchmarking were provided to the C-Suite.


The TBM Awards were created to recognize IT and finance leaders for their forward thinking, creativity, and overall dedication to advancing TBM practices, we’re pleased to recognize the above group for doing just that.


The nominees selected for the IT Financial Pioneer Award are exceptional in unique and notable ways. All of the IT leaders showcased have had a remarkable impact on their organization and are well deserving of a TBM Award nomination.


Want to learn more? Check out the TBM Awards page here! Be sure to follow @TBMCouncil on Twitter and #TBMC14 to stay update on all conference announcements!


Access the TBM Conference registration page here and prepare to share best practices and TBM stories with IT leaders- Miami Beach doesn't know what it has coming in October!

“Recognizing leaders who have transformed IT from a technology focused organization into a strategic business partner.”


Transitioning from a cost center to a services-based organization is a journey. It requires relationship building skills that facilitate a cultural shift throughout an organization and, at the same time, uses TBM as a common language that allows IT, finance and business leaders to understand technology investments, usage and outcomes. This award recognizes CIOs, Business Relationship Management, Governance, Service and/or Account Management leaders who have implemented effective business relationship methodologies, and a TBM-based language that communicates the value and metrics of TBM, and improves the capabilities, productivity and credibility of the IT organization. These leaders have transformed IT from a technology focused, order taking organization with little credibility with the business, into a highly regarded and strategic business partner that consistently brings the value of IT to the business as a whole.


Successful IT Transformers focus on:

  • TBM informs key decisions within IT and in business, including sourcing, investment levels in services and portfolios, and IT funding, M&A and partnering.
  • IT services portfolio is aligned with the needs of the business.
  • A consultative, client centered approach.
  • Communications excellence and change management excellence.
  • Effective governance structures.


It is clear that nominees for the IT Services Transformation Award are up against a big challenge, and have proven themselves in a significant way. We believe the following three finalists are well deserving of recognition and we are excited to acknowledge each of their contributions to advancing the TBM practice.


The Award Finalists


AXA Investment Managers: The AXA Group, a top ten global asset manager, is a conglomerate of independently run businesses, operated according to the laws and regulations of many different countries. Within AXA Investment Managers, the Technology department is the largest from a total cost perspective. Prior to 2013, technology was viewed as an expensive overheard due to intangible expenses. With a change of CIO last year, the technology group started down the TBM road, and in the process implemented a governance structure that changed the culture of the IT organization, all cemented in TBM methodology. To do this, AXA built a Service Catalogue clients were already familiar with– the first step in transforming to TBM for the group—and implemented a TBM governance model that rooted TBM throughout the organization. This initiated a cultural shift within the organization’s Technology group. After educating the staff, AXA was able to focus on the transformation of its cost base into services. Today, the technology department is being transformed, all with the helping hand of a modern CIO and TBM implementation.


Fannie Mae: After The Federal National Mortgage Association, better known as Fannie Mae, was rocked by the 2008 financial crisis, it was clear a change needed to be made. In the quest to respond to the transformation underway in its market, Fannie Mae IT began taking measures to be more efficient and responsive, and ultimately manage IT like a business. However, in attempting to respond to the business’ request for more efficiency, Fannie’s IT organization realized it had no real insights into its technology portfolio, IT costs or performance and thus could not make the strategic decisions. A transformation was in order and the process of understanding costs – the “why” of IT – through a transformation to a services based organization, facilitated by the implementation of TBM began. Today, IT acts as the TBM Center of Excellence. Fannie Mae implemented a business show back report to enable businesses to gain transparency into IT costs, created clear show back messaging that IT provides transparency to enable collaborative decision-making, utilized complexity measures to drive dollars— all driving towards better decision making and a transformational IT service structure.


Nationwide Building Society: Nationwide Building Society is a British mutual financial institution and the largest building society, or retail bank, in the world. Nationwide is a complicated organization with a complex set of applications, systems, and IT— which makes sense their biggest issue was a lack of transparency: of the cost of IT; of the unit cost of delivery of IT; and the actual run cost of IT. In short, the TBM methodology helped transform the way Nationwide communicates. Once they addresses the problem, actions were put in place to work towards a solution. The approach: implement strategic cost management, financial controls and demand management. These changes created a cultural change in the Services Group, where “there is a different way of doing things” is embraced. A TBM governance group was born to provide an approval and escalation path for cost allocation decisions, priority and forward planning of development of the solution and other areas with traditionally contending views. Today, TBM helps determine how to deliver the right capacity to the business at the right time and was a key player in Nationwide’s successful IT transformation.


As it is likely evident from the above look into these three finalists, the Technology Business Management Awards are honoring IT and finance leaders for their ingenuity, creativity and contribution to advancing the practice of TBM.


These IT leaders are having a significant impact on their companies due to their keen focus on empowering operational excellence, business innovation, and business transformation.


Interested in more? Find out more on the TBM Award page here. Don’t forget to follow @TBMCouncil on Twitter and use the #TBMC14 for all conference updates!

Register here for the TBM Conference to share best practices and TBM stories with IT leaders, all set to a beautiful backdrop of Miami Beach!

“Recognizing technology leaders who have leveraged infrastructure engineering for a new level of business results.”


Technology is changing the world as we know it and the challenge now is to not only keep up, but to get ahead. The infrastructure of yesterday is all but extinct today but a select few IT leaders have managed to not only get ahead of this dilemma, but blaze the trail while doing so. This award recognizes CTOs and/or SVPs of Infrastructure who have leveraged infrastructure engineering for a new level of business result, gracefully navigating this new age of technology as data analytics, cloud services and advancements in networking operations transform.


Elements that define successful Infrastructure Trailblazers include:

  • Migrated their business to cloud-based technologies in a meaningful way and/or successfully addressed the need to support mobility through changes to backend operations and architecture.
  • Successful, technical applications of virtualized desktops and other tools that change the entire user experience.
  • Made highly technical changes in their company’s IT architecture, resulting in major improvements in performance and profitability.
  • Developed an internal IT architecture practice to reduce complexity, eliminate redundancies, and end non-compliant IT spend – all in a measurable fashion.
  • Leveraged big data by addressing the complex problems of integrated data across multiple, disparate sources and platforms.


With a list of accolades as impressive as this, it should be clear that the organizations nominated for the Infrastructure Trailblazer Award are in a category all on their own. These three nominees are the shining example of how to distinguish imitator from innovator. Read on to find out why:


The Award Finalists


Mylan: As the second largest generic and specialty pharmaceuticals company in the world, Mylan undertook a global corporate restructuring effort over the last two years that moved the company from a regional management style to a centralized approach. The goal: double its $8 billion in revenues in the next five years; and triple it in the next ten. As part of the transformation, new leadership was brought on board, including a Global CIO, Michael Smith, who brought a different—trailblazing— mindset to what IT is all about, and he did it with TBM. Utilizing TBM, IT is providing cost transparency on all cloud-based systems for Mylan, ultimating resulting in transformative results. As the transition to the cloud continues, with TBM as the driver, Mylan is a leading infrastructure trailblazer due to its notable transparency and visibility initiatives.


AOL: Two years into a five-year transformation, AOL is currently changing their data center strategy in a massive way in parallel to implementing the TBM model. The goal: reduce technical debt, streamline operational costs and migrate out of legacy data centers. As part of this transformation effort, Technology Operations determined that it wanted to change the way that it interacts with the business by changing the discussion from a defensive standpoint – defending the ever-increasing costs of IT – to one that sheds light on business decisions that impact IT spend. When the company as a whole mandated a move to segment level reporting, IT Operations took its cue and began implementing TBM. Due to its already undeniable success, the TBM model is actively being considered for used for sales and other areas outside of the technical space.


Microsoft: The Cloud Infrastructure group at Microsoft embarked on its TBM journey nearly five years ago with a charter to manage cloud infrastructure costs – a mandate that could not be achieved without continual downward pressure on capital and operating expenses. The driver: create incentives for both the operators as well as the service teams to employ utilization and availability. Microsoft’s approach was to develop a system called the Business Management System (BMS) that allows the Cloud Infrastructure team to plan, design, implement, and operate cloud infrastructure cost management methodologies and processes using TBM methodologies. The results rolled in. They reduced 56 core systems to just a handful, removed redundancies between processes and tools, standardized hardware, created a convergence with software and more. All this momentum has produced strong feedback from stakeholders that the TBM approach has improved the planning, operational management and financial management disciplines.


The TBM Awards focus on organizations and leaders who have a keen focus on the TBM vision and best practices. Designed to highlight IT and finance leaders, this year’s nominees inspired the selection committee with their creativity, ingenuity, and overall contribution to TBM.


Find out more at the TBM Award page here! For our social media lovers, be sure to follow @TBMCouncil on Twitter and use the #TBMC14 and #Going2Miami hashtags for all conference updates!


Register now for the only conference focused on managing the business of IT, with the flavor of the one and only Miami Beach added in for fun!

“Recognizing CXOs that think differently about their business - through a digital innovation lens.”


Technology leaders must be at the cutting edge of the digital transformation. With CEOs turning toward marketing and sales leaders and Chief Digital Officers to steer the digital charge, CIOs must step in and bring their considerable knowledge of digital technologies and strategies to bear on the future of their companies.


The Digital Innovator award category was created to recognize CIOs who are leading their organizations to “think differently” about their business. The nominees the TBM Conference Selection Committee identified for the Digital Innovator award stood out among the rest as forward-thinkers and true pioneers in the digital age.


Digital innovation can range from customer engagement to new sales channels to digitally enhanced business processes to deriving new business value from big data. Successful Digital innovators focus on:

  • Connecting digitally with customers while effectively partnering with the marketing organization.
  • Building successful partnerships with a new array of technology providers.
  • Shifting the majority of the IT budget from maintenance costs to high-value investments.
  • Leveraging technology for new markets, new sales channels and new sources of revenue.
  • Providing digital technology leadership to business executives.


We chose the below three finalists because they exhibited the characteristics of a digital innovator listed above, and more. This impressive trio of finalists truly live at the forefront of the digital transformation and are deeply deserving of recognition.


The Award Finalists


DIRECTV: DIRECTV has been an early adopter of TBM and its CIO, Mike Benson, has been a proponent of TBM from the very beginning of the TBM Council. Most recently, Mike has been relentlessly focused on improving the ability to innovate. The approach? DIRECTV is managing its run-the-business spend as a portfolio. They are utilizing TBM to help organize and present data to help show internal and external partners their service costs and align better on decision making, and finding great success. DIRECTV is paving its own path, partnering with the business units to provide them with an architecture in which IT strives to fail quickly and improve so that it can get ideas into the market rapidly, safely and with low total cost — truly innovating the way digital is done today.


HBO Latin America: As the media industry continues to evolve at a rapid pace, HBO Latin America’s ability to support multiple digital platforms, and generate revenue on each, has been an evolution – one that has forced the company to transform to be able to keep up, and move forward. To keep up, they have created a TBM- infused approach to transform the IT organization to a services-based organization and free up capital for digital innovation. The result? HBO Latin America was able to build a digital roadmap that was never possible at the outset of the IT organization transformation, adding revenue generating digital services all thanks to their forward-thinking, innovative approach.


NutriSavings: NutriSavings was nominated for its innovative approach to bridging a gap in healthcare, using digital technologies. In April, 2013, Boston-based NutriSavings was spun-off from its parent company Edenred Group, a French developer of prepaid corporate services. NutriSavings focus: Build a digital eco-system that connects supermarket, food manufactures and growers with consumers through their health plans. Its mission: to improve America’s healthcare system through an innovative corporate wellness program. NutriSavings utilizes TBM methodologies to gain insight into relevant, timely and actionable guidance for its IT leaders. The company's TBM journey started with evaluation of a cloud based business continuity opportunity.


It should be evident by the incredible list of nominees that Technology Business Management Awards are honoring IT and finance leaders for their ingenuity, creativity and contribution to Technology Business Management.


The awards recognize the profound impact that these professionals have on their organizations by empowering operational excellence, business innovation, business transformation, TBM vision and best practices.


Interested in learning more? Check out the TBM Award page here. Be sure to follow @TBMCouncil on Twitter and use the #TBMC14 for all conference updates!


Register now to network with innovative technology and business leaders in the warm sunshine of Miami Beach!

Modern IT leaders are reinventing themselves with a new set of skills to drive technology innovation. These leaders are focused on delivering better value for their spend, while offering the right services, at the right quality, and the right price. They are driving a dialogue about cost, quality, consumption, and value between the IT department, the finance department, and the business units using language that everyone understands.


Many of you already know this, because you are one of these modern IT leaders and that’s why you’ve joined the TBM Council. It’s also this type of special leader that the TBM Awards were designed to recognize.


After an extensive nomination process, we’re proud to reveal the finalists who are in the running to win a TBM Award today.


These awards recognize the profound impact IT professionals have on their organizations by driving operational excellence, business innovation, business transformation, and the overall TBM vision. These leaders are the best-in-class are we’re thrilled to be honoring them for their contribution to the industry!


And now the drumroll…the 2014 TBM Award Finalists are:



Digital Innovator: Recognizes CIOs who are leading their organizations to “think differently” about their business— through a digital innovation lens and TBM practices. Digital innovators leverage technology for new markets, new sales channels, and new sources of revenue and provide digital technology leadership to business executives.

  • NutriSavings
  • HBO Latin America


Infrastructure Trailblazer: Acknowledging technology leaders who have leveraged infrastructure engineering for a new level of business result with technology business. These companies have likely migrated their business to cloud-based technologies, re-modeled their network architecture to flatten the topology, or developed an internal IT architecture practice to reduce complexity all in a successful way.

  • Mylan
  • AOL
  • Microsoft


IT Services Transformation: Recognizing leaders who have implemented effective TBM-based lingua franca that communicates the value and metrics of TBM, and improves the capabilities, productivity and credibility of the IT organization. These leaders have transformed IT from a technology focused, order taking organization with little credibility with the business, into a highly regarded and strategic business partner that consistently brings the value of IT to the business as a whole.

  • AXA Investment Managers
  • Campbell Soup Company
  • Fannie Mae
  • Hillshire Brands Company
  • Nationwide Building Society


IT Financial Pioneer: Championing leaders who no longer merely account for IT spend, they drive an IT financial strategy and capability that matches the new demands of the IT organization. This group of innovators have become chief financial officers of the IT organization by translating cost data into meaningful perspectives for technology and business decision makers with the help of TBM.

  • CME Group
  • The Clorox Company
  • Wells Fargo


TBM Champion: Honoring teams or team members who are at the forefront of the TBM initiative, institutionalizing TBM as a methodology and functional role within their organizations. TBM leaders apply rigor and expertise to the TBM methodology to elevate and ensure its practices across the business, evangelizing through community engagement, such as through the TBM Council.

  • State of Washington
  • Comerica
  • Cox Enterprises and Cox Automotive Group


In today’s rapidly changing IT landscape, there are certain players who stand out among the rest as visionaries. While we wish we could recognize all the amazing work going towards advancing the practice of TBM, this group who stands out above the rest.


Over the next week, you will see a series of blogs describing why we think these companies are worthy of a TBM Award crown. We are so excited to honor this impressive list of finalists and announce the winners at October’s TBM Conference in Miami on Oct. 28.


To receive all TBM Conference updates, be sure to follow the TBM Conference Twitter handle here and search for the hashtag #TBC14 and #Going2Miami.


Congratulations to all our finalists, you really blew us away with your commitment to advancing the practice of TBM and displaying real innovation within your organizations!

There is no industry group on the planet better positioned to understand intimately those qualities that make an exemplary IT or finance leader – one that has put forth specific initiatives and efforts to transform their organizations -- than those of you who are members of the TBM Council.


As Technology Business Management practitioners, you understand what it takes to move the needle in your IT organization, your finance organization, or your organization as a whole. You’ve put your considerable efforts behind TBM initiatives – it’s been a journey, of course – and there may still more of the path to travel. But you’ve had successes (some big huge successes). Or you’ve learned best practices from colleagues and you’re putting them to the test.


As a TBM Council member, now is your chance to recognize those efforts – either your colleagues or your own – through the TBM Award nominations. Winners will be announced at a gorgeous conference venue in Miami, with nearly one thousand of your peers in attendance.


On that note, the TBM Council Board Members and I are delighted to announce the official opening of the 2nd annual TBM Awards nominations. Click here to read about this year’s categories and submit your nomination.


We’ve created five awards to honor IT and finance leaders for their ingenuity, creativity and contribution to the emerging field of Technology Business Management. The awards recognize the profound impact that these professionals have on their organizations by empowering digital, infrastructure and IT transformation, organizational innovation and TBM vision and establishment.


Last year’s TBM Awards winners included leaders from eBay, Goldman Sachs and Amerisource Bergen, First American and Bill and Melinda Gates Foundation


The 2014 TBM Award categories recognize, in other words, those on the bleeding edge of today’s rapidly changing business environment, regardless of industry sector. They include:

  • Digital Innovator Award: Recognizing CXOs that think differently about their business - through a digital innovation lens.
  • Infrastructure Trailblazer Award: Recognizing technology leaders who have leveraged infrastructure engineering for a new level of business results.
  • IT Transformation Award: Recognizing leaders who have transformed IT from a technology focused organization into a strategic business partner.
  • IT Financial Pioneer Award: Recognizing finance leaders who drive an IT financial strategy that matches the new demands of the IT organization.
  • TBM Champion Award: Recognizing TBM leaders at the forefront of institutionalizing TBM as a methodology within their organizations.


Launched at the 2013 inaugural TBM Conference, our prestigious winners included individuals and teams that accomplished great things through the implementation of TBM methodologies: eBay won the Operational Excellence Award; Goldman Sachs won the Business Innovation award; First American won the Business Transformation Award; The Gates Foundation and Amerisource Bergen won the Director’s Award (two separate awards were given). Click here to read more about their achievements.


This year, the TBM Council has appointed industry recognized technology executives and thought leaders to serve on the TBM Awards selection committee, including:

  • Richard Gilbert | Former CTO / SVP Technology Services, SunTrust Bank
  • Julie Flaschenriem | Former CIO, Park Nicollet Health Services
  • Dean Nelson | Vice President, Global Foundation Services, EBAY
  • Larry Godec | CIO, First American
  • Martha Heller | President, Heller Search Associates
  • George Westerman | Research Scientist, MIT Sloan
  • Brian Watson | IT Leadership Author, Editor & Analyst
  • Romi Mahajan | President KKM Group, Investor, Author, IT Strategist
  • Nigel Hughes | Partner, Information Services Group
  • Steve Bates | Principal, Advisory KPMG


Please join us in recognizing your peers for their remarkable efforts. Nominations will be accepted through Sunday, August 17, 2014. Click here to visit the TBM Awards website and submit your nomination.


Finalists will be announced on Wednesday, September 17, 2014.


Winners will be revealed at the TBM Awards Ceremony on October 28, during the 2014 TBM Conference in Miami.

A big congratulations to the five winners of last night’s inaugural TBM Awards during the TBM Conference! Here’s a quick roundup of the winners:


eBay won the Operational Excellence award. The Operational Excellence award recognizes an organization that employs internal and external IT transparency to improve the cost-effectiveness of the services IT delivers to the wider organization. For eBay, the win came from finding a way to understand how many kilowatt hours are consumed…per each of their 4.3 trillion URL requests! Talk about aligning IT with the business! Check out this link to see eBay’s TBM initiative in action. It helps people make decisions with metrics that measure business value, an organizational structure that drives people toward the same goal and visibility of unit cost performance at a granular level. eBay is a phenomenal case study of TBM in action.



Goldman Sachs took home the Business Innovation award. Goldman aligns IT with business at a stunning scale. Running over 26,000 products day-to-day, Goldman’s shared services group is transforming the way the business works. The company has taken the concepts of business innovation and strategic direction to work into a transformed IT organization focused on cost performance and value delivery. Goldman Sachs was able to translate its Midas touch to TBM and IT value delivery. The return on equity performance monitoring requires IT cost visibility that informs pricing decisions and profitability analysis of products across the enterprise. This allows decision-makers to accurately price IT services and see benchmark comparison near real-time.



First American bagged the award for Business Transformation. The company’s TBM journey started during the economic downturn as a quest for IT cost transparency. First American’s TBM story is about the path toward a mature IT strategy focused on investment in IT to execute a transition from cost containment to customer focus for profitable market share growth. First American embraced TBM as a way to mature their IT strategies and further invest in IT while shifting focus from cost containment to customers and market growth. They were able to consolidate over 30 data centers across the country and remove more than 200 applications.



The Gates Foundation is building solutions to address some of the biggest problems in the world. The Foundation took home the Directors Award for adopting TBM as a core principal and creating a culture around TBM that helps The Foundation run IT like a business of its own. TBM allows The Foundation to increase capacity across core IT disciplines to serve the needs of the wider organization, resulted in improved policies, processes, systems and measurement practices. As a nonprofit, this concept brings together the components needed to help ensure every dollar invested in IT advances the Foundation’s mission.



AmerisourceBergen won the second Directors Award. AmerisourceBergen dedicated its large-company resources to move with small-company agility through a TBM program focused on innovative technology services. Over the past several years, the firm has transitioned from 100 percent corporate allocations, to 85 percent direct costing. And IT didn’t just use TBM to serve internal employees better. Responding to business unit market pressures, IT created a standalone organization focused on boosting revenue and profits through services designed to reduce customer switching costs. The TBM Council was impressed by AmerisourceBergen use of TBM for innovation, internal service improvement and customer cost savings.



Congratulations again to all of those nominated for exemplifying the best practices in TBM! We’re looking forward to sharing more TBM innovation stories. Stay tuned!

Have you registered for the TBM Conference yet? If not, here is another reason: join us as we announce the 2013 TBM Awards on Tuesday, November 5, at the Museum of Flight in Seattle.


After nearly six years of hosting CIO summits, we've heard from CIOs and CTOs at companies like Cisco, The Coca-Cola Company, First American, Disney, Park Nicollet Health Services and many others who have made powerful shifts in the way they deliver business value. We have learned from these innovative IT leaders, so now it’s time to recognize them.


A few weeks ago, we began the nomination process for our first TBM Council Awards. These awards will recognize executives for using TBM to improve value, transform their organizations and drive business innovation. At the November conference, the Council will recognize business technology leaders with three distinct awards, each based on the nature of business impact best demonstrated by their approach:

  • "Operational Excellence" – improving the cost-effectiveness of service delivery as evidenced by reduced unit costs, renegotiations of service levels and quality, the rationalization of applications or similar measurable improvements;
  • "Business Innovation" – funding greater innovation and improving upon the realization of benefits (e.g., new revenue sources, improved business productivity, etc.) from new investments;
  • "Business Transformation" – transforming the organization to become a services-oriented value partner.


We selected approximately 85 nominees from two pools of candidates: qualified participants of the TBM Index, in which more than 160 enterprise IT organizations have benchmarked their TBM practices; and past TBM Summit presenters, where CIOs and other leaders delivered case studies in Technology Business Management. We are currently in the process of interviewing the 19 candidates that chose to participate in the selection process.


Our selection team includes experienced leaders in both business and academia:

  • Mark Martinet, former CIO of Level 3 Communications (selection committee chairman)
  • Phuong Tram, CIO of DuPont and TBM Council Board Member
  • Rob Webb, former CIO of Hilton Worldwide and CEO of the TBM Council
  • M. Eric Johnson, Dean, Vanderbilt Owen Graduate School of Management
  • Art Langer, Director of the Executive MS in Technology Management, Columbia University
  • Chris Levitt, TBM Council CFO Research Director


Hosted by Boeing CIO Kim Hammonds, the awards dinner follows our first full day at the TBM Conference. Join us to see who wins and to learn from dozens of other Technology Business Management leaders important lessons for improving and demonstrating business value.


We look forward to seeing you there!

How can IT leaders measure, manage and communicate business value? In my experience, this is perhaps the biggest challenge that CIOs face today. TBM provides a useful framework and best practices, so it makes sense that the TBM Council would take a leadership role in developing a standard for the profession. I’m pleased to share the results of that effort, which represent a significant step forward for CIOs looking to bridge the language gap with their business-side stakeholders.


This summer we engaged Forrester Research to help define the gap and develop a framework for filling it with meaningful business metrics. The result of the research is a balanced set of key performance indicators (KPIs) that, as part of a business value scorecard, are designed to directly address this challenge.


Forrester developed a hypothesis and proposed a four-domain BT value scorecard based on its research in the area of CIO dashboards.  Forrester then conducted in-depth interviews with 19 C-level business and IT executives to test this hypothesis and to gather opinions on proposed metrics.  Technology leaders were asked to identify KPIs they currently use and how they would change them, while business leaders were asked to identify KPIs that would most benefit them in making business decisions and understanding technology contributions to business outcomes.


Forrester found that most CIOs are still measuring things that are IT-centric, while CFOs and CMOs are looking for metrics that better communicate IT’s contribution to business outcomes. This divide is illustrated by the Forrester chart at the right. To measure business value, many CIOs will fneed to adopt a different set of KPIs.


To create and use a scorecard effectively, there are three things CIOs must get right:

  • First, CIOs must measure and report the right things. Forrester found that an optimal BT value scorecard would span four areas: health, delivery, outcome, and agility. These domains convey the best blend of information to help business leaders truly understand the role and contribution IT makes to business outcomes.
  • Second, CIOs and their senior leaders must communicate in business terms. Many of the business-centric metrics recommended by Forrester are financial in nature. Money helps everyone make smarter tradeoffs, such as how much extra capacity is right for the business or what level of service makes sense. IT leaders who understand and communicate financial impact will be able to facilitate more collaborative discussions, securing a more strategic role for technology in business decision-making.
  • Third, CIOs should partner with their CFOs, CMOs and other business partners to drive a regular governance process based, in part, on the scorecard. These vary from business to business, but often take the form of quarterly business reviews and annual strategy meetings. These give stakeholders a chance to review the KPIs, assess performance and collaborate on decisions to improve value.


All three of these elements depend on choosing an effective portfolio of KPIs. Forrester recommends choosing 8-12 KPIs, with a focus on quality, not quantity. They’ve define four categories of metrics, two of which are more IT centric (health, delivery) and two of which are more business-centric (agility, outcome). Altogether, the research report proposes 36 different possible KPIs, which provide a running start for any IT leader in any industry.


You can download the research findings and recommendations and learn more by attending the TBM Council’s webinar on October 15, where you’ll have a chance to ask Forrester VP Khalid Kark questions about how these KPIs can be applied to different situations. And don’t forget to register for the TBM Conference in Seattle in November, where you’ll hear from an amazing lineup of speakers who have successfully transformed their IT organizations with TBM.


For updates on the TBM Council, be sure to join our LinkedIn Community and follow us on Twitter @TBMCouncil.