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TBM - the next step in reducing costs through government disaggregation

March 8, 2018

 

 

The mantra from within public sector over the past few years has been: contract disaggregation, digital transformation and more cost-effective services. 

 

Above all though, has been the drive to save money.  This has always been very difficult to achieve within public sector.  Public services cost money and the public are extremely demanding of our public agencies who also have to deal with a level of oversight that the private sector doesn’t have to.

 

Could TBM be the answer?

 

Technology Business Management (TBM) provides a standard way to categorize IT costs, technologies, resources, applications, and services, and informs data driven decision making around smart IT investment. TBM adapts successful private sector initiatives to improve IT cost transparency within the government.

 

The TBM framework is a powerful tool that can help the government benchmark IT spending, improve acquisitions, and better understand IT investment costs. Increasing IT cost transparency and integrating data from different sources - budget, acquisition, finance and IT, the TBM taxonomy creates a standardized way to categorize funds so organisations can make better sense of their IT data.

 

The taxonomy provides three views into IT spending which frame how data can be used to support different aspects of an agency’s mission:

 

  • Finance view: basic overview of an organization’s IT spending to help with budget formulation and execution.

  • IT view: shows effectiveness of IT spending within a specific function to support investment decisions.

  • Business view: holistic view of agency IT spending, tailored to the needs of senior executives, to help them understand how IT supports the mission.

 

Add to this the difficulty of understanding cloud costs with the growing reliance on cloud providers such as AWS and Azure;

 

  • Costs and usage are buried in monthly billing details.

  • Cloud costs are scattered due to fragmented purchasing across the organization.

 

TBM could provide public sector with the tools that it needs to address the issues around its digital transformation and contract disaggregation while lowering costs, or more importantly allowing for better decision making around the public spend. Using a standard model allows you to bench mark against non-governmental organisations, which helps justify the costs and manage suppliers (and show value for money).

 

Currently the majority of business cases, cost analysis, budgeting and forecasting is done using excel spreadsheets, and while this provides the data in a certain format it doesn’t give the insights that TBM can give an IT leader.

 

TBM's implementation in international governments

 

TBM has already been adopted by the US and Swedish government using Apptio software and has shown some amazing results yet the UK public sector is still yet to realise the benefits.

 

Read about the positive impact that it has had for the US gov at White House TBM Summit (US Fed) blog and the Swedish Gov press release.

 

In summary, my takeaway thought is that to successfully drive business change, IT needs to be run as a business itself and TBM can be the tool to support this.

 

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