For businesses, visibility into tech spending and the ability to forecast costs, especially with many services consumed on a pay-as-you-go basis, is a challenge that can only be effectively addressed by technology business management (TBM).
Every company wants to be a tech savvy company, but this requires gathering data and analysing it for insights to improve processes and develop new business models. By feeding data into AI engines, enterprises accelerate transformation by automating processes and reducing human intervention. The result is less friction in customer engagement, more agile operations, smarter decision-making, and faster time to market. This is, at least on paper, the promises of AI.
However, enterprises face challenges as they modernise their tech stack, adopt more digital solutions, and move AI from trials to production. While FinOps addresses cloud spend, a more holistic view of technology spend is necessary, including legacy on-premises systems, GenAI costs (pricing is typically based on the tokens), as well as labour-related costs.
This has made the concept of TBM more crucial today than ever. TBM is a discipline that focuses on enhancing business outcomes by providing organisations with a systematic approach to translating technology investments into business values. It brings financial discipline and transparency to their IT expenditures with the aim of maximising the contribution of technology to overall business success. Technology is now widely used across business functions and based on GlobalData’s research, about half of the tech spend today is already from budgets outside of the IT department. It is becoming more crucial as the use of technology becomes even more pervasive across the organisation especially with AI being embedded into workflows.
IBM is one of the vendors that offer a comprehensive set of solutions to support TBM in part enabled by acquisitions such as Apptio (which also acquired Cloudability and Targetprocess) and Kubecost. Cloudability underpins IBM’s FinOps and cloud cost management, which is a key component that is already seeing great demand due to the need to optimise cloud workloads and spend as companies continue to expand their cloud usage.
Apptio offers IT financial management (ITFM) which helps enterprises gain visibility into their tech spend (including SaaS, cloud, on-premises systems, labour) as well as usage and performance by app or team. This enables real-time decision-making, facilitates the assessment IT investments against KPIs, makes it possible to shift IT budget from keeping the lights on to innovation, and supports showback/chargeback to promote fairness and efficient usage of resources.