Why Only Technology?
The Question: Why is TBM only focused on technology? Why don't other orgs need business or financial management the same way, like Finance, Shared Services, or HR?
What's Going On: TBM gets a lot of attention as a discipline, but I've never seen anything like a "Bill of Shared Services" for HR or Legal, even though those functions carry real cost too.
What I'm Afraid Of: That I'm missing an obvious reason, or that IT just ended up as the one function everyone feels entitled to interrogate, while everyone else gets a pass.
Good question, and I've heard different versions of this question over the years.
TBM actually sits atop the managerial accounting concept of activity-based costing (ABC). ABC traces cost through the activities that actually consume it instead of just the line item it happened to land on. That general-purpose concept combines with the complexity of attributing technology spend to the business outcome. Together, they triggered the need for TBM. So much of technology is genuinely shared, infrastructure, platforms, and data, one dollar of spend is realistically supporting a dozen different things at once. Other shared services like Legal, HR, and Finance have more straightforward value statements, and attribution is easier.
The layer that extends TBM beyond ABC for IT is the development of a common language that Tech, Finance, and the Business can use to understand the tradeoffs, levers, and implications of decisions around tech spend. This is the piece that makes it more than a cost modeling exercise, and more of a change management exercise.
Once that language exists, it doesn't stay confined to tech. I find that organizations that mature through the TBM journey go beyond explaining tech spend through the typical Bill of IT and start answering questions centered on enterprise-wide capabilities. For example, the cost of onboarding a new team member (tech spend plus HR and recruiting related cost). Or the cost of a hospital bed (tech, facilities, and staffing cost, all rolled into one number).
In my own experience, I've used the same TBM principles to cost out business operations and facilities spend, in addition to the supporting tech spend, to provide a more holistic enterprise answer to "how much does it cost us to do X."
So, long story short, technology spend is becoming increasingly expensive and complex every year, and therefore a discipline was established to address it. But the discipline itself is portable.
Hope that helps!
Have a question of your own? Submit here.
Want next week's answer in your inbox? Subscribe here.
