Modernizing TBM
Your input matters
Modernizing TBM: Your input matters
Feedback Round 2, Updated: Mar 28, 2025 (Round 1 content available below)
Thank you to the TBM community for your valuable comments and feedback in the first round of public review. Your insights have been instrumental in shaping the ongoing modernization of the TBM Framework and TBM Taxonomy. As we incorporate the learnings from the first round, we are now opening a second feedback window to ensure these standards continue to evolve in alignment with the needs of technology management professionals.
The first round of public feedback has now closed, and the TBM Standards Committee is actively reviewing and integrating the responses. One key takeaway was a significant response regarding the proposed renaming of “Technology Resource Towers” to “Tech Resource Pools.” Based on the volume and nature of the feedback, we have pivoted back to the original term, “Technology Resource Towers,” to maintain alignment with industry understanding and practitioner preferences. We appreciate the community’s engagement and encourage continued participation as we refine these standards further.
Share your feedback on the future of TBM
For reference, information about the original TBM Framework and earlier draft version of the TBM Taxonomy is provided below to help you understand what has changed.
Starting on March 28th, we will open the second public feedback window for the next phase of Modernized TBM standards. This window will remain open until April 30th. The TBM Standards Committee will review all feedback received and report on updates made as a result of community input.
This round of feedback is focused on proposed updates for the Technology Resource Tower layer of the Taxonomy, aiming to enhance support for resources supporting AI, Risk & Compliance, and account for the increasing costs of Data Governance and spend related to of IoT and Industrial and Process Control Systems (ICS/PCS) as well as other updates. One notable change resulted from the addition of new Towers leading to further complexity in default views of this layer. In response to this, the TBM Standards Committee has proposed the introduction of “Resource Domains” within Technology Resource Towers to streamline strategic insights into common resource groupings while continuing to expand visibility into new resource areas. This proposed change is reflected in the latest top level draft visual of Taxonomy 5.0 shown below.
What's new for Technology Resource Towers
Proposed Updates for Technology Resource Towers:
- Artificial Intelligence: Added support for AI-specific resources within Compute, Storage, Network, and Platform Towers. NOTE: The intention of these sub-towers is to model resources strictly dedicated to AI solutions, such as GPUs, specialized AI storage for model training, or AI optimized network hardware, while general-purpose compute, storage, and networking resources that support AI but are not exclusively used for AS will continue to be allocated to their respective generalized sub-towers.
- Data: Created a new Tower for Data to capture the increasing costs and governing data in modern organizations.
- Compute: Added support for Quantum Computing as an emerging resource.
- Platform: Introduced dedicated support for Blockchain & Tokenization technologies.
- End User Services: Re-located Central Print under this category for greater clarity.
- New: IoT Tower: Expanding visibility into IoT, Industrial Control, and Process Systems, ensuring TBM fully captures field-deployed technology.
- New: Risk & Compliance Tower: Incorporating cost structures related to digital security, regulatory compliance, and risk management.
These proposed changes are not final, and we are seeking feedback from our communities. Your insights will help refine these standards and ensure they provide practical value for TBM practitioners worldwide.
Please participate and share your feedback here. For additional context on the proposed changes, review the information below.
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Modernization Feedback Round 1 content, published Nov 15, 2024:
The original TBM framework
The original TBM Framework was introduced in the seminal book “Technology Business Management: The Four Value Conversations CIOs Must Have With Their Businesses.” This framework became the cornerstone of the Certified TBM Executive course content and designated a series of Value Conversations, Disciplines, and Organizational Changes that helped organizations leverage TBM.
While useful, the Framework was considered a separate tool from other core TBM standards like the Taxonomy and Model, and feedback from many members indicated limited use and awareness of the Framework beyond the course. Separately, the evolution of new technologies, expansion of TBM practices, and the contributions of our community have led to a wealth of new standards and practices. Recognizing these developments, the Council has designed a new TBM Framework that reflects and connects the many elements of contemporary TBM – including the Taxonomy – and organizes them to support the adoption and maturing of TBM as a discipline over time.
The New TBM Framework
The new TBM Framework organizes the essential elements of modern Technology Business Management and connects them in a way that helps technology leaders build a compelling narrative for how technology investments and operations create measurable business value.
It begins with Foundations—the core data, tools, and roles required to build and operate TBM effectively. These foundational elements establish the integrity and traceability needed to support transparency, accountability, and decision-making across the organization.
At the center of the framework is the TBM Model, which powers cost and value transparency by mapping financial and operational data across technology resources, solutions, and business capabilities. The model integrates key standards (such as FinOps, CSDM, and NIST) and supports extensions for verticals like Banking and Manufacturing. It enables decision-makers to evaluate cost, consumption, performance, and alignment across multiple perspectives.
Built on this model, TBM Outcomes define the actionable outputs a TBM practice delivers to support business needs—such as cost transparency, unit cost management, investment planning, and performance optimization. These outcomes guide teams in applying the model’s insights to real-world decisions and conversations.
At the top of the framework are Organizational Value Drivers—the strategic objectives technology leaders aim to influence. These drivers provide a lens for planning, prioritizing, and communicating how TBM enables value creation across the enterprise.
The TBM Framework supports organizations at any stage of their TBM journey—from those just beginning to implement core use cases to those embedding advanced, contextual data (e.g., carbon impact or vendor risk) into their TBM Models for strategic planning and cross-functional alignment.
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What’s New?
The following information provides insights into how the TBM Council and its community partners plan to develop and leverage Framework 2.0 to support related standards, promote best practices, and educate TBM practitioners.
- Organizational value drivers provide a lens for holistically planning value and linking to organizational objectives
- While this segment of the Framework is intended to be customized to fit an organization’s needs, the Council and its communities are committed to developing content to support the application of TBM to promote key industry value drivers.
- TBM Outcomes reflect what a TBM practice executes to impact value drivers.
- Level-2 views of this segment, which detail specific processes and activities supporting these capabilities, will be shared soon. Meanwhile, TBM Adoption and Maturity Communities are planning to develop process models, data requirements, and maturity strategies.
- The TBM Model is the engine that enables transparency by mapping and allocating financial and operational data across technology resources, solutions, and business value layers.
- It incorporates the TBM Taxonomy to structure the flow of data, supports taxonomy extensions to support the needs of industries and verticals (e.g., Healthcare, Federal Government, Utilities), and integrates connected standards such as ITFM, FinOps, NIST, and CSDM to enable multi-dimensional decision-making.
- TBM Foundations represent the basic components needed to build a TBM Model or to execute and mature TBM Capabilities.
- Extensive work is planned for each designated element, considering both adoption (e.g., initial data collection for early use cases) and maturity (e.g., incorporating contextual data for more granular vendor and labor management).
TBM Taxonomy 4.1
One of the most widely recognized and highly regarded contributions of the TBM Council since its launch in 2012 has been the TBM Taxonomy. The Taxonomy classifies and organizes elements of technology, finance, and business, enabling accurate modeling of costs, consumption, and the alignment of technology end-to-end across an organization.
Released in December 2020, TBM Taxonomy 4.0 has been widely adopted across industries. It has proven effective in modeling a range of technologies, including artificial intelligence (AI). In November 2023, we released TBM Taxonomy 4.1, featuring improved mapping to the NIST Cybersecurity Framework and other minor updates.
Introducing TBM Taxonomy 5.0
Work on TBM Taxonomy 5.0 began in mid-2024 with the goal of keeping pace with rapid technological advancement and changes in how organizations procure technology resources. The Standards Committee began by addressing a series of updates and several calls to action, like elevating visibility for AI and Public Cloud, at the topmost view. These proposed updates were made with the understanding that further changes to this view may be required as the Standards Committee completes a detailed review of each second level view of each layer of the Taxonomy.
Proposed updates to the topmost view of the Taxonomy to-date include:
- Enhanced Support for AI Solutions: Integrating AI considerations in select layers of the taxonomy to better model and manage AI investments.
- Elevated Focus on Cloud and SaaS: Reflecting modern purchasing and consumption patterns by emphasizing cloud services and software-as-a-service models.
- Terminology Updates: Renaming “IT Towers” to “Technology Resource Pools” to align with current industry language.
- Modernized Purchasing and Consumption Models: Addressing changes in how organizations acquire and utilize technology resources.
- Business View Updates: Changes are proposed to simplify the view and more easily map Solutions to either business capabilities or value-streams or internal and external consumers.
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Key Updates for Cost Pools
Cost Pools were the first segment of the Taxonomy reviewed and updated by the Standards Committee. In addition to addressing Cloud consumption, the Standards Committee aimed to reflect the increasing tendency for organizations to incur costs from managed services across traditional areas of spend, such as Facilities. Another key change was driven by the rise in labor as a significant spend driver for many organizations. The update emphasizes understanding total labor count and total costs for available workforce capacity, providing more relevant insights compared to the internal versus external labor distinctions made visible in Taxonomy 4.0.
This view of the Taxonomy is more intuitive and reflective of the perspectives of those with a finance background, enhancing its utility and accuracy in planning and decision-making. For example, the updates explicitly clarify that both opex and capex are understood as expense types, which was not clear in key visuals from Taxonomy 4.0.
The updated Cost Pools align with best practice guidance from the Technology Business Management (TBM) Council, specifically tailored for your organization’s Chart of Accounts and expense account mappings. While your organization may not utilize every cost pool or sub-pool, it is essential to map at least one general ledger (GL) account to any cost sub-pool where you anticipate incurring significant expenses.
For instance, if your organization incurs substantial expenses related to Public Cloud services, it’s advisable to use a dedicated GL account for these expenses rather than combining them with software licenses. TBM best practices recommend creating a separate GL account specifically for Public Cloud expenses and mapping it to the “Cloud Service Provider” cost sub-pool.
Implementing these TBM best practices will enhance the accuracy of your financial management concerning technology expenditures, enabling better tracking and analysis of costs. This, in turn, can inform strategic decision-making and drive greater efficiency in resource allocation.
Key updates from version 4.0 to 5.0 of the Cost Pools are summarized below:
- Cloud Services: Designated as a cost pool to capture public cloud spend from all major vendors.
- Labor Headcount: Now classified as a cost pool to capture all variations of employees and staff augmentation resources, including internal employees, time and materials (T&M) contractors, and other staff augmentation arrangements. This excludes labor resources associated with Managed Service engagements and consultants.
- Labor Headcount Cost Pool: Specifically encompasses consultants and fixed-fee work, such as managed services, where the work is defined by contract but managed externally.
- Managed Services: Now distributed as an available cost sub-pool across each cost pool, allowing for tracking of managed services by spend type without additional tagging.
- Note that the default allocation for Managed Services expenses without further classification is to the Other Labor cost pool.
- Software Cost Pool: Updated to “Software & SaaS” to capture and contain SaaS costs under Software.
- This update also differentiates SaaS from Cloud Services costs and addresses challenges in Taxonomy 4.0, where some organizations incorrectly mapped SaaS expenses into the Cloud Services sub-pool.
- Data Center Facilities: Re-designated from Facilities & Power to more accurately scope costs to those incurred by technology organizations, with additional sub-pool assignments to better classify spend types for the most sought-after insights.
- Other Operating: Designated as a sub-pool across all cost pools, allowing for the allocation of costs that may not explicitly fit into one of the designated sub-pools.
- Note that costs assigned to these sub-pools should be minimal, as excessive assignments indicate a need for updates to the cost pool structure.
- Misc Costs: Re-designated from Other Costs.
For FP&A and Finance Leaders: Note that Total Expenses is equal to the total of all OPEX and CAPEX reflected in this view. Also note that a Cash View is equal to these total expenses less depreciation and amortization.
Tagging Strategies for TBM Modeling
As technology environments become more complex, tagging has emerged as a vital strategy for TBM modeling. While all commercial TBM vendor solutions support tagging to varying degrees, the TBM Council has not previously provided formal guidance on this practice.
Why Tagging Matters
- Additional Dimension for Modeling: Tagging offers an extra layer of detail, allowing for more nuanced tracking and analysis of technology spend and assets.
- Enhanced Visibility: By tagging resources, organizations can gain deeper insights into usage patterns, costs, and performance metrics.
- Improved Alignment: Tags help in associating technology resources with specific projects, departments, or business outcomes.
Looking Ahead
Tagging strategies will be referenced in upcoming sections of TBM Taxonomy 5.0, providing formal recognition and guidance to help practitioners leverage this powerful tool effectively.
Participate in Shaping TBM’s Future
The TBM Council and its partners have collaborated extensively to develop the new framework and taxonomy drafts. However, these resources are intended to serve the broader TBM community, and your input is crucial to ensure they meet real-world needs.
We invite you to review the drafts and share your feedback. Your perspectives will help refine these standards, making them more practical and impactful for organizations worldwide.
Thank you for being a part of the TBM community and contributing to the evolution of our industry standards. Together, we can drive greater value and innovation in technology business management.
Join the TBM community: where innovators and leaders converge
The TBM Council is your gateway to a treasure trove of knowledge: think cutting-edge research papers, insightful case studies, and vibrant community forums where you can exchange ideas, tackle challenges, and celebrate successes with fellow practitioners.
We’re calling on organizations and forward-thinking individuals to dive into the TBM community. Participate in our events, engage in our discussions, and tap into a vast reservoir of knowledge. This isn’t just about networking; it’s about contributing to and benefiting from the collective wisdom in navigating the dynamic world of cloud computing.
