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It has been 3 years since the Office of Management and Budget (OMB) began requiring federal agencies to report their IT spending through the Technology Business Management (TBM) framework. The goal? To better understand how agencies invest in IT. TBM provides a taxonomy that links business capabilities to both finance and IT, giving organizations a single language that everyone can understand and providing decision makers with data to weigh tradeoffs among IT cost, consumption, and performance. The transition to TBM is considered so important that it was included in the President’s Management Agenda, requiring all federal agencies to convert to the TBM model by fiscal year 2022.
The drive towards greater transparency is evident in federal initiatives and policies such as the IT Dashboard, the Digital Accountability and Transparency Act (DATA Act), and Federal IT Acquisitions Reform Act (FITARA). FITARA gave CIOs increased power and responsibility around the management of their IT ecosystem, which makes the transition to TBM more than a requirement: it’s an opportunity. While TBM has the potential to transform how agencies use IT and inform IT investment decisions, many agencies continue to struggle with this new approach. Many private-sector organizations use the TBM framework, but public-sector organizations may misunderstand how TBM can positively impact each federal agency.
Here are 5 myths about TBM at federal organizations—and the reality.
Myth No. 1: TBM has only been around for 3 years, and the next administration is going to implement another framework. Our agency can wait it out.
The Reality: TBM is here to stay. Commercial organizations (e.g., ExxonMobil, Cisco, Starbucks, and Nike) have been using the TBM model for several years. In 2017 ExxonMobil estimated that 65 percent of IT projects were maintenance related, but after implementing TBM, that number dropped to 35 percent, unleashing millions of dollars in modernization. TBM helps organizations understand who’s using IT, how they’re using it, and why—it will continue to influence federal IT for years to come.
Myth No. 2: It’s a compliance exercise, nothing more. We’ll do what we’re required to do to “check the box.” But TBM doesn’t really add any value to our organization.
The Reality: TBM can give agencies unprecedented insight into what IT exists and how it’s used. TBM connects business to finance to IT. It applies to anyone who uses IT—and that’s everyone. No matter where you are in the organization, embracing TBM gives you better insight into where your IT spend is going. The possible data combinations create an IT view that previously didn’t exist, such as uncovering IT spend for legacy systems previously buried inside program budgets. TBM can also help organizations understand how business units consume modern and cloud-based IT services to shape behavior and drive down costs.
Myth No. 3: TBM is too rigid of a framework. We don’t have what we need to get started or understand how to implement it in our specific environment.
The Reality: No two agencies are alike and the TBM taxonomy is flexible enough to allow for different implementation methods. While you’ll need to meet the OMB-mandated requirements, the flexibility lets you apply the framework based on the type of data available to start. Implementing TBM also doesn’t require a fancy tool, just good management practices. Once key stakeholders are aligned, TBM data is easy to collect and analyze. The most difficult aspect can be creating a transparent organizational culture. Any successful TBM roadmap must include identifying an executive to champion TBM across the organization.
Myth No. 4: TBM is just another cost accounting exercise. The finance team can handle this.
The Reality: TBM is more than cost accounting—it’s a new way to consider how we use and purchase IT. Organizations no longer build siloed, monolithic applications; they purchase IT services from outside vendors and pay for what they use. TBM provides a framework for understanding these new IT consumption patterns and drives a discussion across business, finance and IT to get the most value for every dollar spent. For example, agencies can determine if they should maintain or retire a legacy system or move to a cloud-based service depending on the cost of migration and the estimated consumption of the service the legacy system provides. This kind of insight drives business decisions and requires technical knowledge, not just financial.
Myth No. 5: It can’t work in the Federal Government. The private sector is different from how we do things on the federal level, such as Congressional mandates and security requirements.
The Reality: Standardizing how data is characterized across the agency allows bureaus to have an apples-to-apples conversation about IT. Agencies can benchmark duplicate services against each other and more quickly discover best practices. TBM allows organizations to understand the cost of providing these types of capabilities at a granular level, highlighting the root causes more easily so organizations can make more informed decisions.
TBM has the potential to help agencies modernize IT and provide better service to both employees and citizens. It’s a proven framework that—with minor tweaks—can be adapted for the federal sector. TBM isn’t an opportunity for OMB to catch agencies doing something wrong; it’s an opportunity for CIOs and other agency leaders to get more value out of their IT. Strong leadership across the CIO, CFO, and CAO and a willingness to invest in best practices to drive good data will result in lasting benefits to any organization.