TBM Helps Developers Prove Their Code’s Business Value
Bridging the gap between business and IT continues to be a challenge, but as mentioned at its recent annual conference in San Diego, the Technology Business Management (TBM) Council thinks they might have the answer.
If so, this is a big win for organizations generally and for IT staff in particular, including developers who want to know they are working on what the organization really values.
“TBM provides a language for communicating across technology, finance and operations to first of all clarify costs and secondly to measure value,” the council’s executive director Matthew Guarini told The New Stack.
“This way, business is more confident of its investments in technology, and technology can be sure it’s contributing to the success of the organization,” Guarini added.
Relevance for Developers
“Software is eating the world,” as Marc Andreessen said in a widely read Wall Street Journal article.
Businesses need to understand the value of the software they create and use, and make sure they spend wisely. IT is a competitive issue, as more and more business is executed online.
“Organizations need to build or adopt a framework that shows how technology investments are creating value for the business,” Guarini told The New Stack.
Developers benefit from knowing they are creating value, and from validating their work. Simply writing code doesn’t determine that, he added.
If you consider the world of AI, Guarini said, for example Google claims 25% of software is written by AI. “Most likely AI is used for simple tasks. Does using AI improve efficiency or effectiveness?”
Once an organization adopts TBM, he added, it gets a clearer picture of the value of software and can better determine the value of AI and the contributions of developers.
“TBM facilitates the alignment between business and IT by establishing a common vocabulary,” said Jason Bloomberg, managing director of analyst firm Intellyx. “This alignment has been essential for digital transformation initiatives, and now it is even more crucial as AI comes to dominate discussions of technology in the boardroom. Without TBM, developers may lack the business context necessary to understand how to best leverage AI to meet business needs.”
The TBM Council
The TBM Council is a nonprofit organization established in 2012 by Sunny Gupta, the founder of Apptio, an IBM company, to foster a community of best practices, create a user group and develop a network of practitioners to share solutions for Apptio and other TBM-aligned products, Guarini said.
The council estimates that $650B of tech spent is currently managed by TBM, and predicts a 5.8% increase in 2025 — twice the rate of predicted GDP growth.
The council currently has 18,000 members, representing 4,000 organizations — 70 of which are in the Fortune 100 — and grew 34% during the past year.
Adopting TBM requires some effort and takes time, conference attendees told The New Stack. For siloed organizations, adopting TBM also requires a culture change.
The council currently develops and maintains an industry-standard taxonomy and corresponding framework for managing technology as a business. Detailed artifacts are available to members only, however.
Led by a mix of vendors and council members, conference sessions tended to focus on Apptio implementation experiences, TBM success stories and lessons learned in adopting the TBM framework and taxonomy.
IBM acquired Apptio about a year ago and is now the biggest sponsor of the council and its conference.
Moving Forward
On the agenda for the TBM Council for 2025, Guarini told The New Stack, is building better tools and industry taxonomies to streamline TBM adoption and realize its value more quickly.
At the same time, vendors are also working to accelerate adoption of their software to achieve value for their customers more quickly, he added.
“Technology can feel like a black box for business leaders.” Guarini said. “Things got better with the digital transformation trend, because people in the business started to understand. But there’s still a need for a common language, and TBM provides that across technology, finance and business.”
IBM’s view is that “a rising tide lifts all boats,” Guarini added, and part of the council’s task is to push back on equating TBM with Apptio and make the council more independent.
Vendors other than Apptio offer TBM, although their “definition of TBM varies,” he said. “We are looking for more vendors and contributors who can broaden the practice.”
Keynote Highlights
The conference keynote riffed on this year’s surfing theme with upbeat music, surfboards and swimsuits for the 1,300 attendees.
Speakers assessed the progress of the TBM Council, highlighted the strategic value of TBM and presented annual awards.
Outgoing council chair Ashley Pettit, former senior VP and CIO at State Farm Insurance, said that many organizations place their bets on technology, but face a challenge in explaining the value of their investments. Frequently, no one in these organizations can understand what they are getting for that spend.
By leveraging the TBM taxonomy and framework, Pettit said, organizations can shift from emotional to fact-based budget discussions. Because IT is more important than ever, TBM is more important than ever as well, she added.
IBM CIO Leverages TBM
In a typical breakout session, “IBM CIO Leverages IBM Apptio’s Product Integration To Resolve Critical Challenges,” Christine Shortell, VP and CIO of identity services and IT vendor management, described IBM’s adoption of TBM using Apptio, ServiceNow and Jira.
IBM spends about $2.5B annually on internal IT systems, she noted.
Adoption of TBM provides transparency on that spend, she added, and helps IBM adopt new technologies and modernize their systems by understanding how to pivot when new technology or investment opportunities come along, and how to make the right tradeoffs among existing investments.
IBM was “customer zero” of Apptio, Shortell said. “We could get financial reports, but those don’t give us an indication of the value we are getting or how we can switch funding according to priorities,” she added. Apptio gave them access to the information they needed to make budget decisions and tradeoffs.
“We had 4K apps when we started,” Shortell said. Being able to provide transparency on the portfolio has supported our rationalization issues and ability to retire legacy applications.
Recent IT Trends and TBM
Like DevOps, agile and two-pizza teams for microservices, successful adoption of TBM takes time and requires cultural change.
Organizations figure out how to adopt the TBM taxonomy and framework consistently across finance, technology and business. These functions are typically siloed and not used to collaborating on common terms and expense categories.
Some Apptio customers report it takes about a year to derive significant value from adoption, but after that the curve increases significantly. Organizations often start using TBM to explain IT costs, and then to show value and determine the ROI of IT investments.
Newer trends such as DevOps, agile and microservices all require business and product teams to participate closely with developers. However, this tends to be accomplished project by project rather than as the result of a strategic organizational alignment.
This is the alignment TBM promises, with the result of adoption being an organizational understanding of the value of technology, and the ability of developers to have confidence in the requirements they are working on.
