Technology Business Management (TBM) – Putting Information Technology Investments into Focus
As federal agencies and departments continue to invest in and increase their information technology portfolio, there is an increasing need to efficiently leverage these investments to meet enterprise objectives. Federal agencies and departments require a capability to crosswalk IT investments to enterprise objectives and evaluate effectiveness and return-on-investment. Technology Business Management (TBM) delivers a capability enabling federal agencies and departments to transform how they assess IT investments against enterprise goals and objectives.
Efficient IT investment requires traceability between every IT dollar spent and the business objective it enables. TBM provides the methodology and framework to associate IT spending to business objectives, so in November 2016 the Office of Management and Budget (OMB) began releasing TBM implementation guidance to all government agencies.
The Federal IT Acquisition Reform Act (FITARA), passed in December 2014, put federal agency Chief Information Officers (CIOs) in control of IT investments and requires agencies to review their IT investment portfolios to reduce duplication and waste, consolidate acquisition and management functions, and increase cost savings. FITARA was enacted in response to federal IT challenges such as:
- Duplicate IT spending between and within agencies;
- Difficulty in understanding cost & performance of IT investments;
- Lack of visibility into IT spend; and
- An inability to benchmark IT spend within federal entities and between federal and private-sector counterparts.
FITARA delivers increased control to agency CIOs and provides for increased visibility and scrutiny of IT expenditures. Additionally, FITARA provides a framework for scoring agency performance in the management of IT investments. The first FITARA scorecards, compiled by the Government Accountability Office (GAO) in June 2017, revealed that out of 24 agencies, only 8 scored an overall grade of “B” or “A”, and 12 scored lower than “C”. This demonstrates the challenges that face agencies and large IT investments.
TBM provides a methodology and framework to facilitate communication and traceability between the business, IT, and finance domains. Specifically, the TBM framework integrates the following three key perspectives:
- Finance Perspective: Overview of an organization’s IT spending;
- IT Perspective: Evaluation of the effectiveness of IT spending within a specific function(s); and
- Business Perspective: Enterprise view of IT spending, addressing the specific needs of senior executives, that links an agency’s IT portfolio to business objectives and evaluates how IT investments support the overall mission.
The TBM model translates data between the three perspectives and allocates costs from finance (general ledger and cost pools) to IT (IT towers, projects, and services) to the business (operational units and capabilities), providing a detailed view of how the business drives IT spending. Federal departments and agencies are faced with decisions managing financial aspects of the program, development schedules, and modernizing technology. A successful TBM implementation prioritizes the delivery of relevant and accurate data and information to IT and Finance organizations to support their decisions. The TBM Council created the IT COST Commission (ITCC) and tasked it with developing recommendations and best practices in the Federal space.
The ITCC issued a report emphasizing the fact that “Federal technology leaders need the ability to generate accurate, reliable, and benchmarked IT cost data that is consistent across the federal government.”
Successful enterprise implementations require standardization to facilitate consistent and accurate results. To support this objective, the TBM Council identified the need for a standard taxonomy delivering the key benefits including:
- Standardized budget and financial data that supports benchmarking of investments and trend analyses over time;
- Cross department/agency collaboration leveraging transparent data and standardized metrics; and
- Enhanced efficiencies resulting from the ability to benchmark IT investments across an enterprise and highlight best practices and points of success that can be replicated.
Moving Forward and Realizing Benefits
TBM delivers a framework that integrates IT investment data and focus’ on how well these investments serve enterprise objectives. Spry’s approach to TBM is informed by our participation in relevant industry organizations to include the TBM Council and Information Technology Financial Management Association (ITFMA) and collaboration with industry partners to develop an approach with minimal up-front cost and the ability to leverage quick wins. We are working to deliver a TBM adoption approach that provides a gradual, efficient, and sustainable path towards TBM maturity.
In February 2018, the OMB Budget Director confirmed that the administration will continue driving federal governmentwide adoption of the TBM framework and will release additional implementation guidance to agencies. Accurate and timely data is the key to successful TBM adoption and for most agencies significant pre-work is required to prepare. Pre-work includes evaluating the current state of legacy system source data to assess content and accuracy while evaluating IT business processes to ensure the appropriate data is captured during IT business cycles. We support our clients and industry partners through the continual development of our TBM solution enabling the development of best practices and effective tools required for TBM adoption and the optimization of IT investments.
Junius Hayes, Principal Consultant, PMP, ITIL, CTBME. Mr. Hayes has over 30 years of demonstrated technical leadership in the areas of enterprise architecture, solutions architecture, modernization, process improvements, operations & maintenance (O&M) and cloud adoption projects supporting Federal Agencies and Fortune 500 companies. He has extensive program and project management expertise, managing teams including serving as a Chief Architect at USDA Foreign Agricultural Services, and leading a team to develop and continuously improve enterprise architectures. He also has an extensive background in enterprise system implementation support, providing technical expertise and program management oversight for various federal and commercial customers.
Mae Diawatan, Director, Enterprise Services. Ms. Diawatan has over 18 years of business and technical expertise in strategic technology framework, development, capability mapping, and operating models supporting large-scale IT projects for DoD, Intelligence Agencies, and Federal Civilian customers. She has a successful background partnering with stakeholders to develop architecture frameworks that align strategy, process, people, and technology with overall business objectives and in-depth experience establishing best practices and guidelines for selecting, developing, and implementing information systems within enterprise.