The Core Principles of Technology Business Management 2º part

Manage Performance, Make Trade-Offs

IT leadership must marry the TCO of IT products with deep utilization and quality of Service information. This is the best practice of Performance Management from supply chains.  This helps IT drive up the return on existing assets and drive down unit rates to business units. It also lays the foundation for a robust dialogue with the business units on cost and quality of IT services that drives trade-offs based on business priorities.

IT must benchmark the TCO of their IT products and services rigorously against industry peers, similar size organizations and internally between and across business units. This process establishes both an objective measure of IT efficiency and effectiveness and identifies opportunities for focus.

The Core Principles of Technology Business Management

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.

Business technology management

Business technology management (BTM) is a management science that seeks to unify business and technology decision-making at every level in an enterprise. BTM delivers a set of guiding principles, known as BTM capabilities. These capabilities are combined to form BTM solutions, around which a company's practices can be organized and improved. BTM also defines the expected characteristics of an organization according to five levels of a maturity model.
BTM builds bridges between previously isolated tools and standards for business technology management by strategically incorporating both operational and infrastructure levels of technology management to ensure that an enterprise’s business strategy can be realized by the technology it deploys. This structured approach is used by enterprises to align, synchronize and even converge technology and business management for the purpose of ensuring better execution, risk control and profitability.