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“TBM and Apptio helped us get much more granular insights into our costs, drivers, and consumption. This allows us to have fact-based conversations with the consumers of IT and define joint investment and optimization plans.”
Philips is a global health technology company focused on improving people’s health and well-being through meaningful innovation. As cloud adoption increased and the IT landscape became more complex, Philips needed greater transparency into technology costs, consumption, and value to support business-led decision-making.
By implementing IT Financial Management (ITFM) and FinOps using IBM Apptio and IBM Cloudability, Philips established a fact-based operating model for managing IT as a business. Starting with cloud cost optimization and expanding into broader Technology Business Management (TBM) capabilities, Philips delivered measurable financial and operational results.
Philips is a global health technology company committed to improving people’s health and well-being through meaningful innovation. The company operates across diagnosis and treatment, connected care, and personal health, delivering solutions that integrate systems, smart devices, software, data, and AI-enabled informatics. Philips’ strategy centers on delivering better care for more people by combining innovation, design, and sustainability with disciplined execution.
As a large, global organization with decentralized systems and a rapidly expanding cloud footprint, Philips faced growing challenges around visibility and accountability for technology spend. Business, Finance and IT leaders needed better visibility behind the cost drivers, consumption patterns, and total cost of ownership (TCO) across services and transformation programs. Although cloud cost management was resourced, it relied heavily on manual processes that lagged behind real-time usage and limited the organization’s ability to optimize effectively.
Lazar Detchev, Head of Technology Business Management Office at Philips explained that while Philips had a dedicated team managing cloud spend, “it was a rather manual and lagging process,” making it difficult to keep pace with the fast growing and changing consumption and cost optimization needs. At the same time, the company was shifting toward a business-led operating model, increasing demand for transparency, trust, and data-driven decision-making. Centrally allocated budgets and limited insight into IT services made it challenging to align technology investments with business priorities or clearly demonstrate the value IT delivered.
To address these challenges, Philips adopted IBM Apptio and IBM Cloudability as the foundation for transforming IT from a centralized function into a business-aligned operation. The approach was intentionally step-based, beginning with FinOps to unlock fast, visible value and build momentum across teams.
Cloudability provided real-time visibility into cloud consumption and costs, allowing teams to move from reactive reporting to proactive optimization. In parallel, Philips established a FinOps operating model with a consistent, fact-based cadence that fundamentally changed how teams worked and interacted. As Detchev described, the FinOps model “brought a significant change in how people work and interact together based on facts and a repeated cadence.”
A dedicated TBM Office was created to own governance, data quality, and adoption, ensuring consistency as the program scaled. Over time, Philips expanded its ITFM capabilities by upgrading the IT service catalog, building total cost of ownership (TCO) models, introducing cost transparency and show-back, and integrating planning and forecasting into IBM Apptio. By harmonizing data models and connecting decentralized systems, Philips replaced spreadsheets and fragmented reporting with a single, trusted source of truth.
Within the first year of implementing IBM Apptio and IBM Cloudability, Philips achieved meaningful financial, operational, and cultural outcomes. Cloudability’s commitments and optimization recommendations quickly enabled cloud teams to scale their efforts enabling the organization to realize 10% cloud cost savings, exceeding initial expectations and demonstrating Cloudability’s fast time to value and the success of Philip’s FinOps-led approach. Detchev noted that the program delivered “significant savings in year one, which was more than what we anticipated,” while emphasizing that the focus remains on continuous optimization beyond early wins.
Improved forecasting and real-time visibility into consumption enabled teams to move more effectively from identifying opportunities to realizing savings. At the same time, Philips gained significantly greater transparency into IT services, cost drivers, and consumption, strengthening alignment between IT portfolios and business priorities. Internal processes were simplified, and planning and reporting cycles accelerated as teams transitioned from Excel-based workflows to Apptio-driven planning and reporting.
According to Detchev, harmonizing data models and connecting decentralized systems “significantly improved internal speed and efficiency, including planning, reporting, and day-to-day decision-making,” reinforcing the value of a unified, fact-based approach.
Philips attributes the success of its ITFM and FinOps journey to strong executive leadership and sponsorship, including active involvement from the CIO and IT finance leadership. The organization deliberately followed a realistic, step-based roadmap that prioritized maturity over speed, starting with FinOps to deliver quick, visible value before expanding into broader TBM capabilities.
A strong focus on data availability and quality, owned by the TBM Office, ensured trust in the insights generated. Treating the IT service catalog as a foundational business capability helped shift conversations from cost alone to value and outcomes. Equally important was intentional change management to support the behavioral and mindset shift required to run IT as a business. As Detchev observed, moving IT from a function to a business “requires a fundamental change in behavior and mindset,” along with time, leadership, and consistent coaching.
With a strong FinOps foundation in place, Philips continues to advance its ITFM maturity by expanding business-facing services, strengthening forecasting, and improving strategic portfolio management. By embedding transparency, accountability, and fact-based decision-making into everyday operations, Philips is well positioned to scale innovation, optimize technology investments, and deliver sustainable value through IT.
