IT organizations spend considerable time and resources getting their operating model right. An operating model generally defines how you plan, build, operate and monitor IT, as well as strategy and governance.

You invest significantly in these functions, but are you getting the most value from these investments?

IT leaders often adopt elements of generally accepted frameworks, including the IT Infrastructure Library (ITIL) and Control Objectives for Information and Related Technology (COBIT). However, specific models vary from one enterprise to the next.

There are three functions common to most models where we often see technology business management applied: IT financial management (usually plan); IT service design (usually build); IT operations management (operate); and business relationship management (usually govern).

Six Ways TBM Complements IT Service Design

IT service design focuses on defining and delivering application-based IT services. It’s analogous to the product management function of a software company. By answering important questions about services, the resources those services consume and the investments being made in them, Apptio TBM helps customers improve the cost-effectiveness of those services.

Here are six key ways Apptio TBM enables service owners and service operations management: 

1. Quickly understand the true cost of delivering and supporting services (and/or applications) and the composition (drivers) of those costs.

2. Assess service consumption and have fact-based conversations with business partners about how consumption volumes are driving costs.

3. Understand how their services utilize infrastructure such as servers, storage, and data center resources in order to work with infrastructure teams on ways to improve service efficiency.

4. Measure and track unit costs in order to identify real cost variances and to communicate accurate rates or prices to business consumers.

5. Manage demand-driven budgets and ensure predictable IT charges for the business. 

6. Understand the full build and run cost lifecycle of projects in order to identify tradeoffs and changes over a multi-year time horizon.

Delivering Better Service

In our experience, service owners are empowered to be the business owners of their services, much like a product manager in a SaaS company, when they have consumption and cost information. They’re able to find areas of high cost but low value, such as tier-one storage used to support non-mission critical data or excessive maintenance costs on retired applications, and they use those optimizations to fund innovation where it matters. In turn, they deliver better services while keeping costs within their often limited budgets.

This business owner mentality is fundamental to a successful services orientation. A good example of this was shared by James LaPlaine, CIO of AOL. 

"Our view is we’re participating in a marketplace of technology,” he explains. “We’re an important service provider, but we’re not the only one our business units use. We need to know how we fit and perform in the marketplace of services and we need to provide that transparency to business leaders to advise them and let them make the right decision," said James LaPlaine, AOL CIO. "For example, one media property was using a home-grown object store, built and operated inside the company, to store multi-petabytes of data. When we ran it through the TBM model we saw we could probably do this more effectively using third party services hosted in a public cloud, which is what the business decided to do. That one move saved the company $350,000 a month in the storage service costs in just one property." 

In other words, service owners are often the lynchpin in optimizing IT by being at the center of supply and demand.

Download the AOL case study or read our executive brief on the 6 best practices for communicating the business value of IT.