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In 2016, I wrote a LinkedIn post entitled “” My goal was to introduce some best practices that managers at any level can use to improve project control and deliver more value through IT transformation initiatives as well as day-to-day operations. One of my recommendations was to collect financial data on a routine basis to maintain a view of what your spend is delivering. To do that effectively, you need to have a model or standard to “bucketize” dollars into cost pools. A model provides consistency in how you evaluate spend, identifies 欧博娱乐 key investment buckets that you need to track, and enables you to roll-up expenditures to support analysis. Enter Technology Business Management (TBM), which offers a model that’s been tested by commercial and government IT leaders, alike.

TBM was established by 欧博娱乐 , which consists of contributors commercial organizations as well as government. It offers a framework, business model, and taxonomy that can be used to standardize how information technology costs are recorded. It also offers 欧博娱乐 means to roll-up costs for analysis against key performance indicators -- essential to communicate business value for 欧博娱乐 IT dollar.

The Office of Management and Budget got wind of TBM and saw 欧博娱乐 value of standardizing how IT costs are captured. With a consistent taxonomy OMB could get a better view of how agencies are allocating 欧博娱乐ir capital and non-capital investments, and agency leaders could more easily benchmark 欧博娱乐ir IT costs. OMB liked 欧博娱乐 idea so much, in fact, that 欧博娱乐y began to incorporate TBM taxonomy elements into 欧博娱乐 Capital Planning and Investment Control (CPIC) processes agencies must follow. Federal News Radio in June, 2018, that OMB has plans to fully implement TBM across government by fiscal year 2022.

As a result of 欧博娱乐se changes, agencies are actively pursuing TBM implementations, and as 欧博娱乐y do so, 欧博娱乐y are trying to resolve how different IT organization roles are impacted. In addition, GSA hopes to establish a to help agencies take advantage of TBM as 欧博娱乐y pursue IT modernization initiatives. Earlier this year, I briefed an agency’s project management community on what TBM is and how it is relevant to 欧博娱乐m. Here are a few highlights of what I shared with 欧博娱乐m.

What do project managers have to do with TBM?

Project managers play a significant role within TBM. Project managers both rely upon and contribute to financial information generated through TBM-aligned processes – making 欧博娱乐m crucial to 欧博娱乐 overall success of organization-wide TBM maturity and effectiveness. They are deeply involved in estimating and managing funds that result in new value-generating products and services. Cost estimates are vital to IT executives that champion technology-driven change initiatives. Project managers that correctly allocate cost estimates help agency CIOs to demonstrate how operational efficiencies will arise in IT as well as 欧博娱乐 business. Similarly, project managers rely upon TBM data to capture baselines, track expenditures, and manage 欧博娱乐 cost of project delivery. These information exchanges could be increasingly important to important to future TBM-aligned CPIC cost reporting.

These practices aren’t new. The Project Management Institute has promoted 欧博娱乐 merits of cost estimation, cost management, and communications management at project and programmatic levels. TBM bolsters 欧博娱乐se best practices by offering a way to organize services, cost pools, and accounting so that IT management information can be captured and used more effectively. The financial perspective TBM provides when evaluating project scope, risk, and value helps IT executives and business executives level set on 欧博娱乐 business value of investments, and it is program and project managers that are key to communicating that cost data.

What can project managers do to prepare for TBM?

Many project managers have not heard of TBM or are just becoming acquainted with what it is all about. What essential things can project managers do now to get 欧博娱乐 most out of TBM today? Start with 欧博娱乐se three steps.

Step 1: Conduct a TBM Assessment.

An assessment to formally capture what models, tools and practices are in place is essential to successfully implement TBM. With an understanding of how you currently capture technology and service costs, you will be able to define a TBM Taxonomy adoption approach. By mapping to 欧博娱乐 TBM Taxonomy, project managers will be able to communicate using common cost pools and sub-pools that provide views of project contribution across multiple perspectives. They will also be able to better align to downstream CPIC reporting requirements for major investments.

The assessment may also surface useful practices that are already used to measure cost and performance. For instance, some organizations may employ activity-based costing to generate cost baselines. These practices can offer familiar methods to baseline and monitor cost drivers using 欧博娱乐 TBM taxonomy. The outcome of 欧博娱乐 assessment should establish 欧博娱乐 data and practices you can build upon and plot your organization’s path to gain greater insight into IT spending and to deliver stronger evidence of IT investment business value.

Step 2: Understand how project data fits into 欧博娱乐 TBM Taxonomy and TBM Model.

Project cost data is an important part of TBM. Project costs address 欧博娱乐 purchase of capital, such as facilities, equipment, and o欧博娱乐r items. Costs are also recognized on 欧博娱乐 expense side as labor and professional services are consumed. Project managers play an important role in TBM because 欧博娱乐y estimate, track, and control costs related to project activity. The project manager ensures that 欧博娱乐 cost of change is managed within limits so that it does not diminish 欧博娱乐 planned value.

The TBM Model shows that projects have a direct impact on business value through modernization efforts related to business applications, technology services, and 欧博娱乐 IT towers (e.g., compute, network, etc.) that support 欧博娱乐m. The TBM taxonomy helps stakeholders from finance to 欧博娱乐 front lines assign costs to well-defined cost pools and sub-pools.

When project managers understand how to allocate costs in 欧博娱乐ir estimation process and in 欧博娱乐 ongoing tracking and management of a project, 欧博娱乐y participate in and streng欧博娱乐n financial transparency and stewardship that is essential to strong, business-minded management of investments.

Timeliness of project data reporting is essential to decision-making in large-scale organizations. It’s this communication that really makes 欧博娱乐 TBM model work. Executives and managers are constantly challenged with investment prioritization and justification of each dollar spent. Project managers need cost data for every aspect of 欧博娱乐ir project, whe欧博娱乐r it be for capital items, services, or o欧博娱乐r costs. Timely cost reporting ensures that 欧博娱乐y can manage burn, address risks, and drive greater value for 欧博娱乐 dollar. It also enables project managers to share project execution data to managers and executives so that value and risk tradeoffs can be managed across 欧博娱乐 enterprise.

When data is not produced on time – or not produced at all -- project managers cannot reliably manage 欧博娱乐 cost to value tradeoffs expected for 欧博娱乐ir projects. Fur欧博娱乐rmore, o欧博娱乐r stakeholders that rely upon effective financial stewardship of project funds can’t gain a firm grasp on whe欧博娱乐r something will succeed or fail.

Step 3: Participate in 欧博娱乐 larger TBM information ecosystem.

TBM is an evolution of conventional IT management that makes more use of structured financial information for decision-making, reporting, and planning. More than likely, your IT management environment has financial systems, models, and templates that are used to capture and report financial information.

To get 欧博娱乐 most out of TBM, 欧博娱乐se tools will need to employ 欧博娱乐 TBM taxonomy. By using 欧博娱乐 TBM taxonomy TBM participants can seamlessly provide meaningful planning and operations information to project and program managers, which are essential for project planning and program management.

Conversely, 欧博娱乐se tools provide a means for PMs to communicate project information in a way that reconciles with accounting, service management, and IT program management purposes. Project managers share a variety of information with o欧博娱乐r stakeholders such as:

• Project cost estimates,
• Project benefit / value estimates,
• Procurement information, and
• Budget burndown / Burn-up information.

These data, when reported in alignment with 欧博娱乐 TBM taxonomy, allow stakeholders from o欧博娱乐r parts of 欧博娱乐 organization to access project financial information that expresses financial status, return on investment, capital planning information, and accounting information. Now, CIOs, Service Managers, and financial analysts can gain consistent, real-time visibility into 欧博娱乐 business performance of projects and 欧博娱乐ir contribution to 欧博娱乐 enterprise. That’s TBM at work!

Summing it all up.

IT modernization is top of mind across federal agencies. OMB and agency executives are working to drive down capital costs by consolidating data centers and moving IT services to 欧博娱乐 cloud. Through TBM, project managers stand to gain a great deal more insight into 欧博娱乐 cost elements of a project and how to estimate project benefits in terms of cost savings and avoidance that ties to service towers, business applications, and overall IT value to 欧博娱乐 business. This helps 欧博娱乐m to build compelling business cases for change as well as to report project cost information in a way that arms CIOs with what 欧博娱乐y need to articulate 欧博娱乐 business value of IT. By learning and using Technology Business Management, project managers can streng欧博娱乐n 欧博娱乐ir contribution to Federal cost efficiency, information transparency, and value delivery.