Data for TBM
Launching a Technology Business Management (TBM) practice within an organization is an essential step toward achieving financial transparency and value-driven decision-making in IT investments. However, this endeavor requires a collaborative effort between IT, Finance, and other business units to ensure the accuracy, consistency, and availability of necessary data sources. A well-structured TBM model begins with the identification and integration of foundational financial, operational, and IT data. By aligning IT and Finance teams through shared data and insights, organizations can create a model that not only enhances cost transparency but also drives business-aligned decision-making.
YOU ALREADY HAVE THE DATA NEEDED TO BEGIN DELIVERING VALUE WITH TBM
The Opportunity: Building a Strong Foundation for TBM Success
Identifying and gathering TBM data is not just a technical process—it represents a critical opportunity to establish strong cross-functional relationships that will define the success of a TBM practice. TBM reporting, by design, depends on continuous and accurate data from a variety of stakeholders, including IT, Finance, Procurement, and Business Operations. This phase of TBM adoption provides an ideal environment to establish clear expectations, align terminology, and ensure that teams supplying data also understand the value of TBM insights.
Engaging early with data providers fosters long-term collaboration, reducing friction when refining cost models and increasing reliance on TBM reporting. Additionally, organizations that integrate relationship-building into this phase create a culture in which IT and Finance work as strategic partners rather than separate entities. By viewing data identification and governance as a shared mission rather than a compliance exercise, organizations can accelerate TBM maturity and unlock greater financial transparency.
Understanding Core Data Sources and Their Integration
Financial Foundation: General Ledger, Chart of Accounts, and Prepaids
The General Ledger (GL) and Chart of Accounts (CoA) form the backbone of an organization’s financial tracking. These sources capture all financial transactions and ensure that expenditures align with predefined cost pools and categories within the TBM Taxonomy.
In addition to the GL and CoA, prepaids play a crucial role in capturing costs that are paid in advance but allocated over time. These may include software licenses, long-term service contracts, or other prepayments that need to be properly amortized to ensure accurate financial reporting in TBM.
Key Fields: Account code, cost center, transaction date, prepaid balance, allocation schedule.
Use Cases: Cost allocation to TBM cost pools, financial planning, and reporting.
Budget & Forecast Data: Planning for IT Investments
A well-functioning TBM model relies on accurate budget and forecast data to compare planned versus actual expenditures. This dataset is vital for financial planning, ensuring that IT investments align with business objectives and do not exceed allocated resources.
Finance teams use this data to monitor spending patterns, refine forecasts, and ensure IT investments are justified by business value. Effective TBM adoption requires continuous refinement of budgeting and forecasting to adapt to shifting business needs.
Key Fields: Forecast period, cost category, budgeted amount, variance tracking.
Use Cases: Cost analysis, scenario planning, and optimizing IT investments.
Labor Costs: Understanding Workforce Expenses
Labor is a significant component of IT spending, and a TBM model must account for both internal and external labor costs. This includes salaries, benefits, contractor expenses, and time allocations to different IT services or business functions.
A key challenge for many organizations is ensuring that labor cost data is structured in a way that aligns with the TBM taxonomy, linking labor expenses to services, applications, or projects.
Key Fields: Employee ID, role, salary, allocation percentage.
Use Cases: Workforce cost optimization, financial modeling, and IT service cost transparency.
Fixed Assets: Tracking Capital Investments
Fixed assets include physical and digital IT assets such as servers, storage devices, networking equipment, and enterprise software. Understanding the lifecycle, depreciation, and maintenance costs of these assets is critical in building a TBM model that accurately reflects IT expenditures.
Organizations often face challenges in ensuring that asset data is maintained with up-to-date information, particularly for large enterprises with extensive infrastructure.
Key Fields: Asset ID, acquisition cost, depreciation schedule, asset category.
Use Cases: Capital planning, asset lifecycle management, and IT service cost modeling.
Vendor, Contracts, and Purchase Orders: Managing External Costs
Third-party vendors account for a substantial portion of IT spending, whether through software, cloud services, outsourcing, or managed services. Establishing visibility into vendor contracts, purchase orders, and service agreements is essential for tracking external costs and ensuring they align with TBM cost structures.
By integrating vendor and contract data, organizations can assess cost efficiencies, monitor contract terms, and negotiate better agreements.
Key Fields: Vendor name, contract term, total cost, service description.
Use Cases: Vendor spend analysis, contract compliance, and cost allocation to TBM layers.
Project Management System Data: Linking Costs to IT Investments
Organizations that invest in IT projects need to ensure that costs associated with these initiatives are properly categorized and tracked. Project management data, including budget, actuals, and resource allocations, is essential for ensuring cost transparency and aligning spending with business objectives.
This data source helps IT and Finance teams understand the true cost of initiatives and identify areas for efficiency improvements.
Key Fields: Project ID, budget, actuals, project status.
Use Cases: IT investment analysis, project cost transparency, and strategic planning.
Cost Center Data: Structuring Financial Responsibility
Cost center data provides the necessary structure for financial tracking within an organization, ensuring that expenditures are assigned to the appropriate department, function, or business activity. This data allows organizations to track IT spending at a granular level and provides accountability for financial management across business units.
Cost Center data enables accurate tracking of IT expenditures by department or functional area, allowing organizations to allocate costs effectively and maintain financial accountability.
Key Fields: Cost center ID, Department name, Cost center owner, Budget allocation, Actual spend
Use Cases: Assigning IT costs to business functions, Budgeting and variance analysis, Cost accountability and reporting alignment with TBM taxonomy
Cloud Billing & FinOps Data: Managing Cloud Expenditures
Cloud services introduce new cost structures that require specialized financial tracking. Cloud billing and FinOps data provide real-time insights into cloud consumption, usage patterns, and cost allocations.
Given the dynamic nature of cloud spending, organizations must ensure they have robust processes in place to monitor, optimize, and forecast cloud expenses.
Key Fields: Usage type, provider, invoice amount.
Use Cases: Cloud cost optimization, billing transparency, and financial planning.
CMDB: Understanding IT Infrastructure and Ownership
The Configuration Management Database (CMDB) is a central repository that maps IT assets, infrastructure, and services. This dataset plays a critical role in TBM by linking infrastructure costs to business services and applications.
Organizations with mature CMDBs can leverage detailed relationship mappings to enhance cost modeling, while early adopters should focus on capturing key infrastructure elements first.
Key Fields: Asset ID, configuration item type, relationship mappings.
Use Cases: IT service cost allocation, asset tracking, and infrastructure cost transparency.
Application Portfolio: Ensuring Visibility into IT Dependencies
The application portfolio provides insights into software solutions and their associated costs. This dataset ensures that IT teams can map applications to business services and align costs accordingly.
By integrating application data with financial and operational datasets, organizations can enhance decision-making around application rationalization and cost optimization.
Key Fields: Application name, business owner, usage metrics.
Use Cases: Solution alignment, cost transparency, and IT investment optimization.
Business Unit Data: Aligning IT Costs with Strategic Objectives
Business unit data categorizes major divisions, product lines, or operational areas within an organization. This dataset is essential for aligning IT costs with overall business objectives and ensuring that technology investments support strategic priorities.
Business Unit data links IT services and expenses to broader business goals, improving visibility into how different areas of the organization consume technology resources.
Key Fields: Business unit ID, Business unit name, Associated cost centers, Strategic owner
Use Cases: Mapping IT services to business objectives, Ensuring IT spending aligns with corporate strategy, Providing a foundation for cross-functional cost analysis
Callout: Supporting TBM Outcomes with Data
- Transparency: Clear, detailed data creates visibility into how funds are allocated and used.
- Insights: In-depth data analysis drives actionable insights that inform strategic adjustments.
- Benchmarking: Comparative data helps measure performance against internal targets and industry standards.
- Strategy: Data-driven models align IT spending with business strategy and long-term goals.
- Alignment: By integrating financial, operational, and strategic data, TBM models ensure that all parts of the organization work toward common objectives.
Optimization: Continuous data monitoring helps identify areas for cost reduction and efficiency improvements.
Cost Structures and Expense Types
A well-defined TBM model requires an understanding of cost structures and expense classifications. Organizations must differentiate between different cost categories and how they align with TBM cost pools and towers. These distinctions ensure that IT spending is accurately represented in financial reports and decision-making processes.
Defining IT Cost Structures
The primary classifications of IT expenditures in TBM are Capital Expenditures (CapEx) and Operating Expenditures (OpEx). Each plays a distinct role in financial planning and cost transparency.
Cost Structure | Definition | Examples |
Capital Expenditures (CapEx) | Investments in long-term assets that provide value over multiple years. Typically depreciated over time. | Hardware purchases, data center builds, enterprise software licenses |
Operating Expenditures (OpEx) | Recurring expenses required to maintain and support IT operations. Expensed in the period incurred. | Cloud computing services, software subscriptions, employee salaries |
Beyond CapEx and OpEx, organizations must also track direct vs. indirect costs and fixed vs. variable expenses to accurately map IT spending to business functions.
Cost Type | Definition | Examples |
Direct Costs | Expenses directly attributed to a specific IT service, application, or project. | Software development labor, cloud hosting fees for a specific product |
Indirect Costs | Overhead expenses supporting IT operations broadly, not tied to a single service. | IT leadership salaries, facility costs for data centers |
Fixed Costs | Expenses that remain consistent regardless of service demand. | Data center lease agreements, long-term vendor contracts |
Variable Costs | Expenses that fluctuate based on consumption levels. | Cloud storage costs, software license fees per user |
Mapping cost structures accurately ensures that IT and Finance leaders have a common framework for assessing investments and making informed decisions.
Improving Cost Allocations in TBM
Cost allocation is a core function of TBM, helping organizations distribute technology costs in a fair and strategic manner. Organizations often begin with assumptive cost allocation, where estimates or business rules determine how costs are spread across business units. While this approach provides initial visibility, it lacks precision and may not reflect actual consumption patterns.
As TBM models mature, organizations transition to consumptive cost allocation, using real-time data to allocate costs based on actual usage. This approach increases cost accountability and provides business units with better insights to optimize their IT consumption.
Organizations that achieve high levels of TBM maturity integrate predictive analytics and machine learning to anticipate cost trends, identify optimization opportunities, and forecast future spending.
The Reporting Landscape
Effective TBM implementation is underpinned by strong financial reporting capabilities that translate raw data into meaningful insights. TBM-derived reports provide clarity on IT costs, consumption, and business value, offering stakeholders actionable intelligence for optimizing technology investments.
Key TBM Reports and Their Purpose
Report Type | Purpose | Key Stakeholders |
Cost Transparency Report | Breaks down IT expenses by cost pool, providing granular insights into spending patterns. | CIO, CFO, IT Finance, Business Leaders |
Cloud Cost Report | Tracks cloud consumption across providers, ensuring alignment with budget and efficiency goals. | IT Infrastructure, FinOps, Cloud Strategy Teams |
Project Investment Report | Evaluates costs associated with IT projects, ensuring alignment with business priorities. | PMO, Finance, Business Leaders |
Labor Cost Allocation Report | Demonstrates workforce expenditures and how personnel costs contribute to IT services. | HR, IT Finance, Department Heads |
Addressing Common Reporting Challenges
Despite the benefits of TBM reporting, organizations often encounter challenges that hinder data accuracy and usability. These must be proactively addressed to ensure high-quality insights.
Challenge | Solution |
Data Quality Issues | Implement standardized data entry protocols and governance frameworks. |
Inconsistent Cost Allocations | Establish clear allocation rules and ensure alignment with TBM taxonomy. |
Data Silos | Integrate Finance, IT, and business datasets into a unified TBM platform. |
Organizations that refine their reporting frameworks early on will benefit from greater trust in TBM outputs and improved decision-making agility.
Managing Data Quality, Fallout, and Gaps in TBM
As TBM models evolve, data complexity and volume increase, often exposing challenges such as data gaps, inconsistencies, outdated records, and misclassified spending. These issues can lead to fallout—when expenses are not properly categorized into cost pools, towers, or solutions—hindering accurate financial reporting and cost transparency.
Common data quality challenges include:
- Missing or outdated records that obstruct reliable reporting.
- Inconsistent cost allocations that distort budgeting and forecasting.
- Unstructured data formats requiring manual intervention before integration.
Organizations often begin their TBM journey with assumptive cost allocations and limited data coverage. Early iterations of the TBM model may reveal not only low data quality but also the absence of essential datasets altogether. Importantly, these data gaps can be just as informative as the data that is present, highlighting opportunities to refine data governance, reporting structures, and model constructs.
To address these challenges and mature the TBM model, organizations should:
- Improve governance: Define clear ownership for financial and operational datasets and assign data stewardship roles to ensure accountability and consistency.
- Automate processes: Streamline data collection to reduce errors, enhance reporting consistency, and monitor data quality through automated audits.
- Implement exception handling: Establish processes to manage fallout and ensure all IT expenses are categorized appropriately within the TBM taxonomy.
- Address data gaps proactively: Document and investigate gaps to uncover underlying issues, then take targeted action—whether adjusting report queries, improving business processes, or launching initiatives to generate new data streams.
- Refine cost allocations: Gradually transition from assumptive to consumptive methods to improve cost accuracy, and integrate business impact metrics such as risk, sustainability, and AI insights as the model matures.
By embedding these practices into their TBM strategy, organizations build a stronger foundation for data integrity and operational excellence—empowering teams to confidently expand their models, strengthen accountability, and deliver deeper insights across the business.
Data Best Practices
- Organize and validate the data you already have.
- Document missing data, create acquisition plans, and prioritize by effort, timing, and impact.
- Stay focused on your use cases—let them guide your data priorities.
- Align TBM data needs with the broader organizational data strategy.
- Assign clear ownership for each data source and extract.
- If not using commercial TBM software, clean and normalize data within source systems before loading it into your model.
- Continuously monitor data quality and address issues promptly.
- Compare current and anticipated use cases to identify overlaps and optimize data acquisition.
- Avoid collecting data without a clear, actionable purpose.
- Adapt the organization’s data strategy to fully support TBM objectives.
Establishing Data Ownership and Building Relationships
TBM adoption is only as successful as the consistency and quality of its data inputs. As organizations mature their TBM practices, it becomes imperative to establish strong relationships with data owners across Finance, IT, Procurement, and Business Operations.
Identifying Data Owners
Different datasets within a TBM model are typically owned by different teams. The table below outlines key data sources and their likely owners.
Data Source | Primary Data Owner | Supporting Contributors |
General Ledger & Chart of Accounts | Finance | IT Finance, Accounting |
Budget & Forecast Data | Finance | Business Units, CIO Office |
Cost Center Data | Finance | Departmental Budget Managers |
Business Unit Data | Corporate Finance | Business Unit Leadership |
Labor & Workforce Costs | HR | IT Department Heads |
Vendor Contracts & Purchases | Procurement | IT Finance, Vendor Management |
Fixed Asset Register | Finance | IT Asset Management |
Project Management Data | Project Management Office (PMO) | IT Project Leads, Finance |
Cloud Billing & FinOps Data | IT Infrastructure | FinOps, Cloud Strategy |
Configuration Management Database (CMDB) | IT Operations | IT Asset Management, IT Security |
Application Portfolio Data | Enterprise Architecture | IT Application Owners, Business Unit Leads |
Best Practices for Relationship Building
TBM leaders must proactively engage with data owners to ensure ongoing data access and alignment. The following strategies can help foster collaboration:
- Early Engagement: Involve data owners in TBM planning discussions to establish shared goals and expectations.
- Demonstrate Value: Show stakeholders how TBM reporting benefits their departments to encourage buy-in.
- Define Governance: Establish clear policies on data ownership, update frequency, and accuracy expectations.
- Automate Where Possible: Reduce manual effort by integrating TBM tools with source systems for automated data retrieval.
By prioritizing relationships and governance, organizations can ensure sustainable TBM adoption and continuous access to high-quality data for financial transparency and decision-making.
Conclusion
Data gathering and integration are the first crucial steps in building a TBM model that delivers long-term value. By structuring cost data effectively, aligning reporting frameworks with business objectives, and fostering collaboration with data providers, organizations can set the stage for an effective TBM practice that provides deep financial insights and strategic alignment.
With the right foundation in place, TBM reporting becomes not just an operational necessity but a strategic advantage, enabling IT and Finance to work together to optimize technology investments and drive business success.
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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.
