IT Leaders Discuss TBM Innovation in Manufacturing

Apptio and the TBM Council recently hosted a lively discussion among manufacturing CIOs and IT leaders about Technology Business Management (TBM). The panelists led discussions about innovation in TBM, described what TBM looks like in their organizations, and offered advice to participants on how they could get started on their own TBM journeys.

Defining Innovation in TBM

TBM is a set of disciplines and practices for using data, analytics and processes to improve and communicate the business value of IT. Most businesses already employ many TBM elements in their organizations but are missing elements that make a big impact on the value. The question is: which ones?

McKinsey & Company and the Technology Business Management (TBM) Council partnered to help organizations answer this question with a one-of-a-kind benchmark assessment called the Technology Business Management Index™. During the teleconference, Leandro Santos, Partner at McKinsey & Company, shared some of the many interesting findings from the assessment.

Most of the companies surveyed scored somewhere between a 1 and 2 on a maturity scale of 1 to 5. But what sets those companies scoring 3 to 5 apart from the others? Santos offered an insight into that answer, “One of the things that sets people ahead and rates them as a 3, 4 or 5 is to be able to shift from a showback to a chargeback, meaning that you are not just showing the data that’s directionally right and you’re able to have a trade-off conversation, but you are now charging them for the actual utilization.” Santos continued,  “Once you start charging people for it, and they believe that if they change the way that they use the services they can actually pay you a lower bill, then you really start driving trade-offs and you really start driving change.”

Rich Kolb, Controller of Information Technology at Jabil Circuit talked about his experience with the assessment. Kolb added, “We fell somewhere between a Level 2 and a Level 3 overall. But I felt like it was a real practical tool that helps me understand where we are and where we need to go.”

TBM Facilitates Better Communication

A common theme among the panelists was how TBM provides a common vernacular for business conversations on many levels.

At Jabil Circuit, TBM enables IT to help business units understand their costs in a meaningful way. Kolb offered, “We can now provide that competitive advantage to our business units in a transparent way that the business units can understand and trust. And that’s an important concept. IT was traditionally seen as a tax on the business, and it was difficult to understand. So we want to be as transparent as we can to build the trust of the business units.”

TBM also enables better conversations at the executive level. Tony Lovell, Manager of Business Transformation Portfolio and Performance at The Scotts Miracle-Gro Company shared a now-famous conversation that took place between their executives. Lovell said, “Our CIO had a conversation with our executive leadership team about all our allocations that we were doing. And there was a conversation of, ‘This is where we’re at a net level. This is where we are at a gross expense level. We’ve allocated this out. We’ve allocated that out. We’re here. We’re there. This is our number last year, and this is where we’re going.’ An executive leader then stated, ‘I can’t tell if you’re a hero or a goat with all these allocations that are going on. I can’t tell if we’ve saved money through the year or if we’ve increased the overall budget.’ That obviously put our CIO in a pretty uncomfortable spot.”

TBM gave Scotts Miracle-Gro the framework to communicate on a much more granular level. Lovell continued, “That conversation that our CIO had with the executive leadership team gave us the opportunity to now say, ‘Here’s the cost. It’s compute. It’s service and storage. It’s with this vendor. It’s in this location.’ Those are types of quick conversations we want to be able to have.”

The TBM Conference is an Important Part of the TBM Journey

The participants also shared their experiences in attending the annual TBM Conference. According to Lovell, “I guess, from my perspective, I would say if you’re thinking about doing the implementation and have the questions, it’s probably good to attend the TBM Conference. I think it’s an affordable way to get a lot of answers that you may be looking for, as well as network with other folks that have done the implementation.”

Chris Pick, CMO of Apptio and TBM Council President, closed by saying, “If you are considering TBM and Apptio or any of the aspects that surround us, the conference is probably the best way to get a birds-of-a-feather perspective.”

Learn how to manage the business of IT in your organization at the TBM Conference 2016. Register now!