Technology Business Management (TBM)

How much does it cost to keep yourIT infrastructure up and running?

Trusted and used by more than 450 organizations and 600 consultants across the globe

Manage IT spending for running and growing the business

The benefits of CostPerform’s Technology Business Management software

Most organizations struggle with the way

the growing cost of technology (IT) is being

managed. With the introduction of Technology

Business Management (TBM) by the TBM

council, business and technology leaders now

have a standard model (or language) to jointly

manage IT spending for both running and

growing the business.

TBM provides a framework for understanding

the relationships between the business’s

primary processes and the level of IT spending.

In many industries, IT becomes the company’s

primary process and needs to be managed as

such. Our cost & performance management

software comes with a Technology Business

Management template that offers you a TBM

compliant cost model, providing essential

financial and operational tooling to implement

the TBM framework within your organization.

This framework can be implemented to allow you

to, for example, manage all your cloud suppliers,

and reconcile their costs according to their

detailed billings.

Most important TBM features

• Creates transparency by showing the

business your cost structures

• CostPerform produces an IT bill of

to support and influence business

demand

• Enables you to measure differences

between business units, time periods,

suppliers, and more

• Links to your technology costs

• Allows for “what-if” and predictive

analyses

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TBM lets business and IT speak the same language

Often, business and technology leaders

will find themselves in budget discussions

involving technology spending. While each

party understands dollar amounts, in meetings

they rarely speak the same language. IT leaders

state their budget in terms of computing,

storage, and data center necessities. Business

leaders want to talk about products, markets,

and services. Connecting these different

languages using TBM and its common,

easily understood taxonomy that both

parties understand, you can start the right

conversations. Using TBM, IT can show

value through business optimization; while

the business can align its activities to its IT

spending.

And while growing the business, thanks to

TBM, the two parties can look at innovation

possibilities through a common lens. Technology

Business Management even allows for business

agility discussions by adapting the IT cost

structure to the appropriate cost variables.

In CostPerform, you can literally and physically connect your IT model with the Business

Models, such that the output of the IT model becomes the input for the business models.

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Instead of IT defining its catalog, it is now the business

that drives the services coming from IT. With the right

connection between business and IT, these volume-

based drivers extend towards something far more

sophisticated than a ‘simple’ Products and Services

catalog. By continuously improving this connection,

the integration of IT within the business becomes

almost seamless.

With our TBM software, you can literally and

physically connect your IT model with the Business

Models, such that the output of the IT model becomes

input to the business models. Likewise, changes in the

business models will automatically result in changes

in the IT model.

TBM allows for a seamless connection between business and IT

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TBM gives you the right information for the right decisionConnecting your business to your IT department

via TBM automatically establishes full

transparency. This occurs because every IT line

items can now be traced back to the business

initiative it supports and vice versa. Disclosing

this information and making it available to

decision-makers has other advantages. First, your

IT department can now provide your business

managers with a detailed IT bill so demand

can and will be shaped with the right cost

consequences in mind. Subsequently, you can

show differences between business units, time

periods, and budget/expenses and have the

right conversations.

Are the differences a result of increased/

decreased volumes, capacity utilization and

efficiency, or is input price a factor? With

CostPerform you can readily answer these

questions.

Last but not least: you can drastically improve

and shorten the budget period by connecting

the budget directly with business needs. This

way, business requirements drive the IT budget

needs, rather than vice versa.

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To build a sound TBM cost model, various data

sources need to be accessed. Like every other

cost model, this model needs to be fed by a

financial accounting system (general ledger) for

cost and funding information. Typically for a

TBM model, additional contract and contractor

information are provided by procurement

systems. Other important data sources include

the HR system (for FTEs), operational and IT

management systems, and data sources for

client’s products and service consumption.

CostPerform can easily and efficiently process all

these different types of data sources. Flexibility

and ease-of-use are key here, and CostPerform

provides that with its mature data import

function and the built-in extract, transform, and

load (ETL) function. It minimizes manipulating

the data and gives the user all the functionalities

necessary to upload and process all data

automatically (and scheduled if needed).

Benefits from CostPerform’s ability to process

data efficiently and easily does not end there.

Proper TBM implementation requires data be

exported or linked to other systems for reporting

purposes. Our software has its own reporting

engine for reporting on cost pools, IT towers,

Necessary data for a TBM cost model

In order to feed existing reporting tools,

CostPerform also has a standard OLAP export

function to export data in the appropriate format.

products and services, and business units. To

help feed existing reporting tools (such as

Tableau, Qlik, or PowerBI), CostPerform also has

a standard OLAP export function that exports

data in the appropriate format, allowing it to

be used by these 3rd party reporting tools.

Alternatively, CostPerform’s database can

also be directly accessed by other tools to link

CostPerform’s data to those reporting tools.

In practice, we see a mix of usages where

existing reporting tools are typically used for

routine periodic reporting (fed by CostPerform),

while additional ad-hoc reporting and analysis is

typically done within CostPerform.

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CostPerform TBM in short

TBM pricing

Technology Business Management provides a

framework for understanding the relationships

between the business and the level of technology

spending. Our cost & performance management

software offers you the needed financial and

operational tooling to implement the TBM

framework within your organization.

Next to CostPerform TBM’s great functionality

and transparency, we strive to supply you with

excellent value for money. After all, we have

a 25-year background in cost management. By

managing our costs well, we can keep our TBM

solution up-to-date, run an extensive customer

support network, and keep prices low.

We run two pricing models:

The OPEX model The CAPEX model

The OPEX model where you pay an all-in

annual subscription fee. This is totally in line

with the incentive within TBM to make your

cost variable. However, this is usually not the

best option budget-wise.

The CAPEX model where you purchase a

license for using the software and pay a

relatively small annual fee for maintenance,

updates, and support.

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Please find some example pricing below. Send us a request regarding your specific situation so we can discuss

the appropriate pricing for your business. For U.S. Federal Government agencies, we adhere to an existing GSA

MAS (formerly IT-70) schedule. Details are available upon request.

Subscription-based License-based

Subscriptions can be useful in situations where

flexibility is more important than costs. With

subscription-based pricing, a client is able to

turn the cost off and on yearly.

Average size

CostPerform is used in few or small teams.

Annual: $25K – $60K

Plus-size

CostPerform is used company-wide or

in large teams.

Annual: $50K – $120K

Purchasing licenses is the most commonly used

model for CostPerform. Most clients are into

TBM and costing for the long term. For 3-4

years of use, a license-based solution becomes

the rational choice.

Average size

CostPerform is used in few or small teams.

TBM License: $50K – $120K

Annual Maintenance: $10K – $24K

Plus-size (best value!)

CostPerform is used company-wide or

in large teams.

TBM License : $100K – $240K

Annual Maintenance : $20K – $48K

TBM pricing

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TBM at the Small Business Administration The Office of Management and Budget (OMB)

encourages agencies to adopt Technology Business

Management (TBM) strategies by 2022. While

some agencies are just beginning to take tentative

steps to initiate TBM projects, the Small Business

Administration (SBA) is a shining example of one

agency further along its implementation and

sustainment journey.

The SBA TBM program began two years ago, primarily

to address the OMB directive to adopt TBM as the

standard taxonomy and reporting structure for

Capital Planning and Investment Control (CPIC).

However, the Chief Information Officer (CIO) and Chief

Financial Officer (CFO) quickly recognized that TBM

implementation also provided important opportunities

beyond mere compliance. TBM offered the SBA an

ability to enhance the transparency of the agency’s

IT spending, gain visibility into the demand from

customers and the cost to serve them, and ultimately

optimize the level of enterprise IT spending to support

key mission goals and objectives. The SBA selected

CostPerform’s Technology Business Management

software as its TBM solution and utilized an activity-

based costing (ABC) approach to provide program

offices and support functions the capability to perform

cost management, analysis, and reporting.

Running IT like a businessThe TBM implementation team benefited from the

strong sponsorship of both Maria Roat, program

champion and former SBA’s CIO (now Federal Deputy

CIO at OMB), and Tim Gribben, SBA’s former CFO.

These executive leaders worked diligently to inform

other key SBA stakeholders about the value and

benefits of TBM, ensuring this project’s success. Both

share the vision of “running IT like a business”; gaining

insights to differentiate what it costs to “run” versus

“change” the SBA business.

To attain the vision, the TBM implementation team

designed and deployed a CostPerform solution that

connects plan, budget, and actual data across the TBM

taxonomy. But the SBA is not only looking at the past

or present; they specifically want to extend the TBM

outcomes to the future state of the business. Using

forecasting methods to determine expected future

performance and cost is a desired and achievable

outcome. The flexibility of CostPerform allows the

SBA to incorporate mission goals and expand its

models beyond TBM baselines.

“CostPerform allows us to comply with OMB directives, and gives us the flexibility and information we need to optimize IT spending across the agency.”Maria Roat, program champion and former SBA’s CIO

Client case

CostPerform TBM consulting partner network

A selection of our TBM consulting partners

Through our professional consulting partner network, we provide the training, coaching

and support to help you get the most out of our TBM software.

Our certified consulting partners can help you with the implementation and provide you

with the right knowledge to give you a head-start on your TBM initiatives.

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www.costperform.com

Contact CostPerform

Tel USA: +1 410 385 5325

Mail USA: infousa@costperform.com

Tel NL: +31 (0) 347 355 023

Mail NL: info@costperform.com

Thanks for taking the time to read this whitepaper on TBM. We hope you

now have a clear idea of what our software can do for your organization.

Contact us if you have any questions or if you want to discuss

your next steps with us.

Contact us