Mastercard uses TBM to put the customer front and center

 

Awards Category: Strategy & Planning

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Summary: At Mastercard the strategy is simple: put the customer first. TBM is enabling IT to reorganize its operations around global programs so it can respond faster to changing market needs.

When most people think of Mastercard, they probably think of it as a credit card company. In reality, Mastercard is a technology company. More specifically, it operates a global payments network that enables commerce on a global scale.

"Think of us as a diversified, but integrated, products and services technology company that's playing largely in the payments and payments-related-services space," said Kush Saxena, Mastercard's CTO. "So, what does that mean? What that means is we run a core technology product called our network."

And not just any network. A network that moves trillions of dollars around the globe every year. To keep its millions of business and consumer customers happy, Mastercard provides layers of technology services and applications that, among other things, keep transactions safe, customer data confidential, and fraud in check. They also provide services like data analytics, fraud scoring, and identity management to their commercial customers.

This confluence of product, services, and network is where Mastercard's business and technology strategies intersect to drive the company forward.

"The way our CEO would articulate our corporate strategy would be to first grow the core, and that's the network; second, to diversify customers and geographies, and that's all of these services that we've built on top of that, which are also technology products; and third, to build new businesses," said Saxena. "Both our network and our services are comprised of a series of integrated, linked technology assets that build or drive towards the diversified portfolio that we have. And this is where TBM comes in, because TBM is the methodology and approach we are using to make sure that our investments and our technology assets are inextricably linked to the value they are generating for our customers and the company."

 

TBM (not just technology) is the innovation

 

To make this value a reality, Mastercard's Operations & Technology (O&T) division has adopted a "program concept" for delivering core technology, services, and new products to the business. In the not too distant past, O&T had a project focus that supported the company's products and services.

"In the past, we operated across business and IT with an organizational overlay, much like most IT shops do," said Saxena. "And the ownership of value, which, in fact, transcends organizational lines did not happen. The view was, 'If I'm a sales guy, I just sell stuff', 'If I'm a product person, I build new features and it's O&T's job to go run it.'

"With the creation of these programs, we have individual and distinct units of value creation that transcend organizational boundaries. And so a program is a unit of value creation for the company aligned with the corporate strategy that includes operation stakeholders, technology stakeholders, and product and business stakeholders."

At Mastercard, a program team consists of resources from the product teams, development and engineering, operations and the business, and quality engineering -- all sitting together (sometimes physically, sometimes virtually) and aligning the program to deliver business value. The goal is to keep the focus on the customer experience, not the project.

"Collectively, we don't just own the new feature or functionality," Saxena. "We also own how it runs, we own measures on sustainability, we own measures on resiliency, and that's the ability to move away from an organizational operating model to a program, which is a cross-organizational value-driven operating model. It's the big enabling shift for all of that."

This is where TBM comes into play. Unlike the typical approach of analyzing IT budget spend, mandating concessions from vendors, or giving business unit money-saving tools, Mastercard uses TBM to create a map of their enterprise services framework. The company uses TBM taxonomy to include data from other technology processes, assets, and tools beyond cost, such as development initiatives, service tickets, personnel, and the configuration management database (CMDB).

This holistic approach to TBM enables program managers to conduct more valuable discussions with the business regarding development capacity, operational health, servicing, sales, and support.

"The powerful thing that I've learned through the TBM community is that a lot of people stop at the financial transparency piece, and they don't try and incorporate it or tie it back to the corporate strategies or to the overall technology processes," said Mary Griffin, Mastercard's senior vice president of Technology Data Management.

"Mastercard has gone beyond the standard principles of TBM, because we're taking it to a different level. We're using this program concept to communicate the value of O&T to the rest of the company and to show that we are not a cost center; we have assets and these assets are powering the overall corporate strategy."

 

Using TBM to become more Agile

 

Although Mastercard’s technology teams and processes are Agile, some of their previous financial practices were not. For example, the way they capitalized software development costs impeded the technology teams from fully adopting Agile.

"What we've done is focus on the team costs," said Steven Schmidt, Mastercard's vice president of IT Finance. "We know what the teams work on and we can cost out initiatives that way, following standard software capitalization accounting principles. We did it primarily based on the cost of a Scrum team. So we can take the “cost of a team” and allocate it appropriately without hours. That was the innovator for us, 'How do you do it without hours?' And we do it, basically, through close coordination with the teams that work on those initiatives."

Finance processes are still GAAP aligned, but now the finance team uses capacity-based metrics other than hours to estimate cost. "It wasn't really actually that big of a deal once we came up with a way to eliminate hours,” said Griffin. “And, frankly, our auditors were open to it as well because other people are struggling with the same challenge: How do you move to Agile and still make people track hours? Those things just don't really align very well."

Without TBM, Saxena believes the move to Agile would not have worked because their main focus is the program, not a business unit or a project. Because of this, programs straddle the operational lines between different business units and IT. The goal of IT is to break down programs by services that are consumed across the enterprise. For this reason, programs also sit at the top of the TBM unified model, occupying the spot usually reserved for business functions like sales and customer service.

"So now that you've got teams where products and technology and operations stick together. To be truly Agile, you need to convert your big fat application into underlying services that are independently deployable and that takes money to do," said Kush. "With the principles of TBM, a program team can justify that saying, 'Look, over a three-year time horizon, I can improve the velocity for my program team dramatically if you will let me make the investment in doing that,' And so this program structure, which came hand-in-hand with TBM, is creating the foundations for easier Agile migration down the road."

 

Moving past cost to value

 

Like most companies that use TBM to get a handle on IT spending and, from that, begin to transform IT from an cost center to a provider of business value, Mastercard O&T is using TBM to go beyond costs, according to Griffin. They are combing cost transparency data with operational data to show the value their programs are delivering.

"What we're doing is we're taking [the TBM] framework and we're putting it into many, many different tools within Operations & Technology so that we can show relationships between the operational data," said Griffin. "It's in our Workday personnel system. It relates to the call center calls that are coming in relating to the specific programs. In our CMDB, we are tagging the infrastructure back to those programs. So when you bring all that information together it becomes a much richer dialogue that we can have with our partners about the value that we're delivering."

It also gives the program managers new insights so they can make better decisions. "The trick," said Schmidt, "is to marry those metrics with the right finances to come up with something that's of value to the program owner."

 

Making better decisions faster

 

And that's really what this is all about: empowering decision makers with the right data so they can make better decisions faster. Mastercard's adoption of TBM is not only changing how the business and O&T interact, it is helping them showcase the value IT brings to the table. But, more importantly, it is enhancing Mastercard's ability to use technology in ways that are relevant to its customers.

"If you're doing this right, you live and you breathe TBM and it becomes an integral part of your organization," said Griffin. "It's not this separate effort that you're doing. It's an embedded part of the way that IT lives."

 

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