From IT Financial Management to

Technology Business Management

Executive Summary

Information Technology (IT) is under transformative pressure like never

before. Tight budgets and economic uncertainty, coupled with trends

like Cloud and consumerization, are resulting in increasingly urgent

needs for improved IT management at a business level.

While mature IT organizations can manage the supply of technology,

true IT business management also includes the ability to understand and

manage demand in a way that is relevant for the line of business. And

the entire process of meeting demand with supply must be translated

to objective performance measures, such as cost, process effectiveness,

quality of service delivery, or vendor management.

Managing the “business of technology is therefore challenging. Alignment, responsiveness, transparency,

seamless integration all are key themes in information technology management, and its relationship

to business sponsors.

Apptio has emerged as a leader in Technology Business Management (TBM), with a strong IT financial

management solution serving as a basis for broader functionality in IT financial transparency, IT

planning, IT benchmarking and analytics, and IT performance management and vendor management.

From IT Financial Management to

Technology Business Management

The phrase “barefoot cobbler’s child” is commonplace in the IT industry: while IT automates the rest

of the enterprise, its own value chain is poorly understood and fragmented. An increasing consumer

of capital and source of operational risk, IT also holds out the potential of breakthrough innovations.

With such large expenditures and business criticality, one would expect it to be managed using

techniques comparable to large retail supply chains, complex industrial operations, and so forth.

Yet, even though IT-based companies are in the headlines every day, the basic management practices

around IT remain immature.

In managing IT performance, understanding IT finance is a top priority. Traditional approaches to

understanding and reporting IT finance are often crude, providing little actionable information. The

complexity of translating raw cost and usage data into business meaningful terms has been difficult in

distributed environments. Virtualization and cloud computing only increase the challenge. IT Financial

Management requires sophisticated integration of IT management platforms to provide the required

transparency. Ultimately, IT financial transparency enables the business to identify and make informed

trade-offs between cost, quality, and value in their IT investments.

The consequences of not having a business meaningful view into IT expenditures are problematic:

Lack of IT alignment with business demand.

• Executives unwilling to meet ITs resource requests, because they dont know how to relate the costs

to the benefits.

Inability to make sensible, cost⁄benefit based decisions about quality of service and investment

priorities (new services and approaches such as virtualization, Green IT, or cloud).

Unintended cross-LOB subsidization of IT expenses and perception of such unfairness eroding

the businesss trust for IT.


©2012 Enterprise Management Associates, Inc. All Rights Reserved. |

Page 1

While mature IT

organizations can

manage the supply of

technology, true IT business

management also includes

the ability to understand

and manage demand.


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