What changed? First, cloud computing, with its transparent costs and speed of adoption, has forced CIOs to change the way they communicate value to the business. At the same time, a confluence of technology, methodology, and community has emerged to light the way toward managing IT with business-style clarity and rigor. As a result, role of the CIO is finally, truly turning the corner.
The issue for IT professionals in general—and CIOs in particular—has been the inability to connect the cost of the services and capabilities they provide to the value they deliver. Where successful manufacturing organizations and supply chains can track product and supply costs at every step and precisely calculate the impact on the bottom line, IT has never had the tools to pinpoint expenses and analyze the resulting return on investment.
As a result, CIOs have been hard pressed to talk credibly about the value they deliver with their peers in the executive suite. And IT managers have lacked the data and insight needed to accurately balance the impact of costs on usage and service quality.
Today, an entirely new approach to IT management in the enterprise called Technology Business Management (TBM) is changing this situation. Developed by Apptio, a Bellevue, Washington based enterprise software company launched in 2007, TBM offers clear visibility into the unit costs for IT services and capabilities; a framework for reporting costs, usage, and value to business units; and standardized tools that dramatically improve forecasting, budgeting, and planning.
Apptio was founded by Sunny Gupta, a highly respected entrepreneur who previously led a number of successful startups, including Rational Software, Performant, and iConclude. He formed Apptio after a series of discussions with Fortune 500 CIOs made it clear that they all shared a common frustration—an inability to run IT like a business in which accountability for results is based on a clear understanding of the relationship between costs and value.
Apptio TBM solutions were developed through a partnership with technical leaders from top companies around the world, including CIOs from Bank of America, Boeing, JPMorgan Chase, Microsoft, Swiss Re and many more. Today, Apptio continues to work closely with the TBM Council—now an independent, non-profit organization with more than 500 members—to define and promote best practices for the IT industry. With the publication of Technology Business Management: How Innovative Technology Leaders Apply Business Acumen to Drive Value, the TBM Council is literally writing the book on the future of the profession.
At the heart of Apptio's TBM solution is a platform that automates the collection, integration, and management of data about IT usage from all internal and external sources; offers easy-to-use visual modeling tools to make it easier to calculate the true flow of costs and other resources; and delivers powerful self-service analytic tools that provide business and IT users with the insight to make clear decisions about how to balance costs against strategic business objectives.
On top of this platform, Apptio offers application modules that span IT service costing, Bench marking, business performance, planning, and more. Together, they enable IT managers to improve cost efficiency, tighten alignment with business requirements, and increase the productivity of the IT organization as a whole. More important, they help IT leaders manage their operations with discipline and clarity, and unleash the power of IT to support day-to-day business imperatives while driving strategic innovation.
At Cisco, for example, the Apptio TBM solution is enabling IT to benchmark the performance and cost of technology services and capabilities against other leading technology companies, compare costs directly against internal performance metrics, and articulate the specific IT services it delivers at every level in terms that other business leaders understand.
“Cloud computing, a worldwide recession, and intensified global competition have changed the economics of IT,” says Rebecca Jacoby, senior vice president and CIO at Cisco Systems. "They’ve created a playing field where many of us are faced with the mandate to not only do more with less, but to also have value-based conversations with our business partners. Once we understand the services we deliver in detail, we can bring those services to the table to run the business today and grow the business in future."
And at eBay, Apptio technology is the core of its Digital Service Efficiency (DSE) dashboard, a new application that measures datacenter consumption, performance, and energy supply to analyze the full cost and environmental impact of every single transaction. "We have a nearly infinite appetite for all kinds of digital services," said Dean Nelson, eBay’s vice president of Global Foundation Services, in an article in Information Week. "Therefore, it's more critical than ever for IT ensure that these services are delivered in the most efficient and responsible manner possible. The DSE metric is one of the first standards to make this happen."
Cisco and eBay are two of a fast-growing set of companies that are taking advantage of Apptio TBM solutions to transform the value that they get from every dollar they invest in IT. Today, CIOs at more than 125 world-class enterprise companies—including Bank of America, Boeing, JPMorgan Chase, Microsoft, and Swiss Re —have implemented Apptio's technology to improve their ability to manage the business of IT. There’s little doubt that the opportunities for future are growth are nearly limitless, as CIOs embrace a new set of tools that brings them into strategic business conversations in language their executive peers can truly understand for the first time.