The core principles of TBM are very similar to core principles of manufacturing or sales. IT is responsible for delivering to the business units a core set of IT products or services.
Cost Transparency
IT leadership must drive transparency into the total cost of delivering each IT product or service. This includes defining and identifying the core cost drivers of the IT service or product. The TCO of each service is highly analogous to a cost of goods sold (COGS) in a manufacturing environment. This deep understanding of unit costs and cost drivers empowers IT managers to make better cost-based decisions and surgically reduce cost while improving service quality.
IT must establish transparency with their business units by delivering a Bill of IT or “pro forma invoice” on a regular basis. This Bill of IT should make clear to the business unit what IT services they consume and the cost and quality of those services.
