This work is licensed under CC BY 4.0 - Read how use or adaptation requires attribution
Early Bird registration still available for FinOps X 2024

Intersection of FinOps & ITFM/TBM

Definition

TBM (Technology Business Management) and FinOps intersect in their shared focus on managing technology investments and optimizing financial outcomes. TBM is an IT Financial Management (ITFM) discipline that improves business outcomes by giving organizations a consistent way to translate technology investments to business value.

TBM defines the tools, processes, data, and people needed to manage the business of technology in a standard taxonomy that can be used by technology, finance and business leaders. FinOps is an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, finance, technology and business teams to collaborate on data-driven spending decisions.

Both disciplines prioritize financial transparency, cost optimization, and aligning technology spending with business objectives. Specifically, TBM compliments FinOps by providing a total cost of ownership (TCO) perspective on cloud-related labor, SaaS, management tools, and license spending. FinOps enhances TBM by providing granular insight on cloud service provider (CSP) spending and opportunities to optimize the business value of the organization’s investment in cloud resources. Based on your organization business case, the FinOps and TBM team(s) may be centralized or separate collaborative unit(s).

Maturity Assessment

Crawl

Individual Understanding

Both TBM and FinOps disciplines have their individual understanding of how CSP resources are being paid for and consumed. They possess in-depth knowledge of their respective frameworks, information sources, goals, and experiences. They can analyze and assess relevant information to determine outcomes specific to their disciplines. Education takes place to enhance the understanding of the intersections between TBM and FinOps and how they can assist each other in optimizing the business value of CSP investment.

Walk

Shared Understanding

Both TBM and FinOps teams have achieved a shared understanding of CSP consumption costs. They regularly reconcile these costs to provide a comprehensive view of the organization, creating a “single pane of glass” approach. There is also a shared understanding of each other’s framework, allowing for effective communication and analysis. TBM is used in conjunction with FinOps to bring additional transparency and understanding to the organization’s cloud consumption. TBM is also used to compare fixed and variable costs when comparing digital infrastructure and data management solutions. Costs are aligned to TBM Cost Pools and Towers to enhance visibility.

Run

Common Taxonomy, Toolset, and Processes

There is common terminology for cost management across all assets and CSP resources. This shared terminology enables the organization to develop a comprehensive understanding of the TCO and the business value derived from cloud investment. Cloud costs are fully mapped to all four layers of the TBM Taxonomy – Cost Pools, Towers, Solutions, and Business Capabilities – maximizing transparency and understanding. TBM and FinOps practitioners closely align and collaborate to ensure an optimized cloud consumption landscape. The tracking of migrated workloads allows for the measurement of OpEx versus CapEx savings achieved through the utilization of cloud infrastructure.

A common toolset including software applications and methodologies is used to enable either some or all TBM and FinOps processes. Recurring actions are performed consistently in a standardized manner by TBM and FinOps practitioners. An example of a common process may be a chargeback allocation methodology including CSP direct costs (FinOps), as well as indirect labor, SaaS, cloud management tools, and/or license costs (which are applied when using a TBM TCO approach).

Functional Activity

As a FinOps Practitioner, I will…

As a TBM Practitioner, I will…

As an Engineering Manager, I will…

As a Finance Manager, I will…

As a Procurement Manager, I will…

As a Business/Product Manager, I will…

As an Executive, I will…

Measures of Success & KPI

Measures of Success

Measures of success are represented in the context of cloud consumption and may include one or more key performance indicators (KPIs). These KPIs provide organizations with insight on how they are maximizing the benefits gained from combining the TBM and FinOps frameworks to understand and manage cloud costs.

Consistent Reporting: Reporting on CSP consumption is coordinated between TBM and FinOps teams, the same data sources are used, and analytical results are consistent.

Coordinated Policy and Governance: TBM and FinOps teams consult with each other before establishing or changing cloud financial management policies, the governance structure, or products used to manage cloud consumption.

KPIs

Supporting KPIs – Related to other FinOps Capabilities

Effective tagging and cost allocation are critical to both TBM and FinOps.

Inputs

TBM Inputs

FinOps Inputs

Finance/Financial Inputs

Organizational Inputs

For more reading

Intersection of TBM & FinOps – TBM Council (external link)

Get Involved

Get involved and contribute to the community by sharing your real world experiences related to this Capability in the form of a story or providing a playbook for how you have implemented best practices in your organization. Your real world experiences can be provided in the context of:

Join the conversation about this Capability in Slack. You can submit stories, how-tos and suggest improvements using one of the options for contributing here.

Related Domains

Capability Assets