Modernizing TBM
Public feedback on new standards
Modernizing standards
The TBM Council is modernizing its core standards, including the TBM Framework and the TBM Taxonomy. This initiative aims to reflect the evolving landscape of technology management and ensure that our standards meet the current and future needs of the TBM community in managing the value of AI, hybrid cloud, and more.
This page provides a preview of our ongoing work and offers you the opportunity to contribute to our modernization efforts. Your feedback is invaluable in shaping these standards to be as effective and relevant as possible.
Share your feedback on the future of TBM
Starting on November 4, 2024, we will open a public feedback window for the first wave of Modernized TBM standards. The public feedback window will be open until January 4, 2025. Additional survey windows will be opened as new areas of the Modernized standards are reviewed by the TBM Standards Committee, who will review all feedback and report out on updates made as a result of the feedback.
The following information provides background and context for the updated TBM Framework, the top level view of the TBM Taxonomy, and the Cost Pool detail. The feedback survey will allow you to select each area you wish to provide feedback for. We encourage you to participate and help guide the direction of TBM’s foundational resources.
Your opinions on the new framework and taxonomy matter. Please share your thoughts on the draft standards, or continue reading for more details on the newly proposed Framework and Taxonomy:
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, over time, 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 not only organizes the many elements associated with adopting and maturing modern TBM practices but connects them in a way that helps technology leaders build a narrative for how TBM, technology investments, and technology operations create value for the business.
The new Framework begins with a set of guiding principles that explicitly link investments and operations to business value creation. These principles steer teams as they run, grow, and transform the business through technology. Organizational Value Drivers inform holistic value planning and help prioritize organizational objectives. A newly formalized set of TBM Capabilities enables teams to identify the most effective actions to impact these value drivers and to leverage their TBM Models efficiently.
The TBM Taxonomy, along with its industry vertical extensions (such as Banking and Manufacturing) and standards integrations (including CSDM, NIST, and FinOps), is essential for building comprehensive TBM Models. Foundational Elements capture the necessary data, tools, and roles required to develop and utilize TBM Models and execute TBM Capabilities effectively. Lastly, TBM Maturity Phases outline how each segment of the Framework is implemented at different levels of organizational maturity, ensuring continuous improvement and sustained value creation.
The new Framework is a crucial tool for organizations beginning their TBM adoption. It also benefits highly mature TBM practices by integrating contextual data, such as risk profiles or carbon footprints, into their TBM models. This integration helps organizations make informed trade-off decisions.
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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.
- TBM Principles guide the adoption, maturity, and practice of TBM
- TBM Principles will be referenced throughout all future standards, practices, and content. The TBM Adoption Community will leverage these principles to develop content to support Change Leadership and Enterprise Change Management (ECM).
- 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 Capabilities 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 Taxonomy enables capabilities and reflects how costs, consumption, and alignment are modeled.
- Both the Taxonomy and its extensions will continue to evolve, with plans to integrate standards alongside a wide range of partners (e.g., Mapping Sustainable IT metrics).
- Foundational Elements 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 Maturity Steps guide the use of framework elements at different stages of maturity and across product and service life cycles.
- These Maturity Phases will be incorporated into a wide range of standards, content, and educational materials. Dedicated guides have been proposed for each phase to inform how organizations move from one stage to the next.
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.
Further refinements were made to better align the terminology and presentation of this Taxonomy layer with the practices of financial planning and analysis. These changes ensure that 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. These and other refinements will continue to be prioritized in visuals and supporting documentation as new standards are developed.
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.
- Other Labor: 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.
