Key takeaways from the 2014 TBM Conference
Over 700 CIOs, CTOs and other IT leaders gathered at the annual Technology Business Management Conference in Miami last week. Based on the session content and my conversations at the event, one theme stood out clearly: “The business” needs clarity and simplicity from their CIOs.
This may seem obvious, but many CIOs fail to deliver it. Instead, they either lack transparency or, conversely, provide way too much. This is a problem for a number of reasons. First, internal IT providers must now compete against cloud providers that provide clear options and prices based on business consumption. Second, complexity hinders innovation.
This theme was prominent in two keynotes at the conference. The first, entitled “The New Style of IT,” was delivered by HP’s Global CIO Ramón Baez. Baez repeatedly used the words clarity and simplicity, and said that “without TBM, you won’t have that clarity.” Baez presented his IT strategy that backed this up, along with seven tenets: financial, responsive, transparency, simple, innovative, showcase and inspire. Elements of TBM, such as financial and transparency, are clearly represented. But the real lesson for the 1000+ senior IT leaders that make up TBM Council members, is to avoid the pitfall of complexity when being transparent.
Using a Simple Dashboard to Communicate IT Value
Later in the day, eBay VP Dean Nelson shared how technology is changing global commerce. He told a story of simplicity in transparency. eBay runs a massive commerce engine (worth $200 billion in commerce value each year) on the global infrastructure for which Nelson is responsible. Efficiency of that engine is tremendously important to eBay’s bottom line, as it represents a very large cost to their business. However, sustainability is important for eBay’s top line — it demonstrates environmental stewardship at a time when Internet companies often find themselves under scrutiny for their data centers’ carbon footprints.
Nelson’s early attempts to measuring communicating efficiency and sustainability metrics were too complex and were not clearly connected to their business. So he changed his approach. Using Apptio to model costs, power consumption and other metrics, his team now delivers Digital Service Efficiency (DSE) metrics. In turn, eBay is able to show how a dashboard of cost, performance, revenue and environment – a clear linkage of infrastructure to business. Here, Nelson chose to keep the dashboard simple but actionable. With this information, any executive can see how his or her business is driving infrastructure costs and environmental impact. But they also see the benefit (i.e., performance, revenue) of that infrastructure. Servers aren’t just a cost to the business, each one generated $38,000 in revenue in one quarter (as an example).
How a TBM Unified Model Creates Transparency
Creating simple transparency is, paradoxically, not very simple; your TBM leaders have a lot of work to do. It helps if they don’t have to reinvent the transparency wheel and use what others are also using. This is where the TBM Taxonomy, a major component of the Apptio TBM Unified Model (ATUM), comes into play. Both eBay and HP have used the TBM Taxonomy and ATUM to create transparency that is simple and connected to their businesses. Indeed, Baez emphasized the value of the standard taxonomy: “With TBM, we don’t have to build a new taxonomy every time.”
One other benefit for these two companies is they now have the clarity that is essential when undergoing a corporate split (HP splitting into two companies; PayPal is splitting from eBay). As Nelson demonstrated (below), having a common taxonomy dramatically accelerates analysis and decisions for how the split affects shared infrastructure, applications, and even human resources and outside services.
Divestitures, mergers and acquisitions are rare in most enterprises. However, the ability of the TBM Taxonomy and ATUM to help accelerate important fact-based analyses like these demonstrates how it helps make other, usually simpler decisions, faster and fact-based as well. In part, this acceleration comes from the ATUM’s power to simplify by creating a common and consistent language — categories, costs and metrics — that are used in a complex world of IT.