August 14, 2018

Ready or Not, Here it Comes: Prepare for Technology Business Management

What is TBM?

IT supports most aspects of a modern organization’s performance but it’s historically been difficult to correlate IT investments to business outcomes. Technology Business Management (TBM) is a way to address that challenge. TBM is an expense and budgeting framework and methodology that brings together an organization’s finance, IT, and business stakeholders to bring transparency and insight into IT investments. By getting granular insight into how IT is being implemented and used across an organization, leaders and practitioners can better allocate resources, plan for the future, and measure business results.

TBM has shown successful outcomes in the private sector, particularly by large businesses. The Office of Management and Budget (OMB), in its quest to continually improve management and performance, has committed to using TBM to manage the government’s $82 billion IT investment portfolio. On March 20th, this was further formalized as Cross-Agency Priority (CAP) Goal #10 of the President’s Management Agenda (PMA, page 40). As noted in the PMA, “from FY2015 to FY2017, early use of TBM quadrupled the percentage of IT spending that could be clearly tracked to a specific cost category, such as data centers or IT security and compliance.”

In last year’s 2019 federal budget submission, agencies were required to incrementally adopt the TBM model and provide more granularity in their budget reports. The rollout will continue and expand through 2020 and beyond, as OMB migrates the Capital Planning and Investment Control (CPIC) process to TBM. If you haven’t heard about it at your agency yet, you will soon. So get ready. The transition is no small task. But once achieved, it is a rewarding exercise.

Why TBM?

The first priority for agencies migrating to the TBM model is to get insight into the ~$50 billion operations and maintenance line item in the federal IT budget. Right now, CIOs and federal leaders can only make assumptions at what comprises this bucket of spending. But assumptions are unreliable and provide little help when planning for the future and justifying new investments. By breaking open the O&M investment bucket, agencies can free up funds for modernization initiatives.

Many agencies, such as the Department of Transportation (DOT) and Nuclear Regulatory Commission (NRC), are embracing the practice, understanding the value and insight TBM metrics deliver. TBM is enabling organizations to drive digital transformation, understand the value of prior investments, the business needs of organizational units, and where they need to direct resources to ensure current and future success.

Other agencies have an uphill battle to fight due to the nuances in their accounting or business structure. Adoption will be slow, incremental, but ultimately essential to federal IT health and modernization, especially in light of the Modernizing Government Technology (MGT) Act and the opportunities afforded by the Technology Modernization Fund (TMF); see OMB’s draft guidance on the MGT Act for more details.

How is TCG Supporting TBM?

At TCG, as a member of the TBM Council with more personnel becoming TBM Certified every week, our TBM Community of PIE (Practice, Interest, Excellence) is sharing and learning about the latest developments in TBM, and works to forge solutions to TBM implementation challenges in federal agencies. The work we’re currently doing in supporting of TBM implementation government-wide is providing early lessons for government’s IT and business leaders in how to improve management of IT investments to better serve all Americans.

Change is coming. And it’s up to all of us to keep up with the times, especially if the outcome leads to better results for our government and taxpayers. For more information about TBM certification training or to chat about how to best implement TBM at your agency, contact Bill Hough, TCG Program Manager and TBM PIE Chair.