The Scaled Agile Framework® (SAFe®) is the world’s leading framework for enterprise agility. It enables organizations lớn respond rapidly lớn changing business models, markets, and technology.
To help businesses address the challenges of developing and delivering software and systems in the shortest sustainable lead time, SAFe combines the power of Agile with the contemporary knowledge found in systems thinking and Lean product development.
As organizations increase business and technical agility with SAFe, they also face another significant challenge — how lớn manage increases in technology spending that exemplifies many modern companies.
Many IT organizations bởi not have full transparency into their spending or have a method for allocating their costs. They may not be able lớn demonstrate the real value they bring lớn the business in return for the investment in technology.
Fortunately, there’s an established approach lớn running IT lượt thích a business: Technology Business Management (TBM). TBM is a discipline that provides technology leaders with standards and validated best practices lớn measure and communicate the cost, consumption, and performance of technology investments lớn their business partners. In turn, IT is better positioned lớn drive innovation in the enterprise.
TBM aims lớn solve the four main challenges with this value proposition:
- Unclear value – Do internal customers consume IT as if it’s free? Do they see the value in IT investment? Can they connect IT’s contributions lớn business outcomes? Does the business think IT is too costly and slow? Can the business compare IT’s performance across the company and with industry peers?
- Uncontrolled costs – Does IT spending crowd out investments in growing and transforming the business? Is IT spending readily justifiable? Is technical debt accumulating faster phàn nàn it can be paid down, limiting business agility?
- Disconnected planning – Are IT budgets defensible? Do you have drawn-out budget and forecast cycles, which are then locked in annually? Do you lack accuracy, transparency, and accountability of IT spending?
- Lack of agility – Can you provide the business with a variety of cost and quality choices for the products and services you offer? Does the business make decisions independent of IT, or are the two real partners?
IT can deliver more value by combining TBM and SAFe.
If you experience any of these four IT challenges, then understanding how TBM and SAFe work effectively with each other is critical lớn your future business success.
This article provides an overview of TBM, with an emphasis on understanding the critical connections lớn SAFe. It also describes how TBM and SAFe work together lớn help IT deliver more value with more transparency and lớn achieve greater business agility and partnership with the business.
What is TBM?
TBM is a discipline that improves business outcomes by giving organizations a consistent way lớn translate technology investments lớn business value. It is backed by a standardized taxonomy that enables IT, finance, and business leaders lớn react quickly lớn changing market dynamics and optimally leverage cloud and agile practices lớn deliver on business objectives. The Technology Business Management Council, a nonprofit organization, designed TBM lớn accomplish the following objectives.
- Reveal the real costs and consumption of services, projects, infrastructure, apps, and more
- Measure the total cost of ownership (TCO) lớn tư vấn managing technical debt and other often-hidden costs
- Accelerate business-aligned decisions with clear, trusted facts
- Empower productive conversations lớn establish a common language between IT, finance, and business units
TBM delivers a single source of truth that all teams can understand — leading to better collaboration, increased trust, and defensible decisions. Organizations that adopt TBM can make decisions faster, react quickly lớn changing market dynamics and optimally leverage cloud and Agile practices lớn deliver on business objectives. Cross-functional collaboration frequently breaks down because the company lacks the information needed lớn make informed, responsible decisions — or business stakeholders bởi not grasp the real costs of IT.
Organizations use the TBM landscape lớn connect technology investments lớn business value: translate the things that money is spent on — cloud bills, data center investments, third-party software, and developers — lớn outcomes the business cares about.
The TBM landscape encourages you lớn think of your technology investments through different lenses — working from left lớn right.
First, consider the practices and operating models your company is adopting or wishes lớn adopt. These impact the business outcomes you are aiming for. A company adopting FinOps cares about unit economics; one moving lớn a product-oriented operating model cares about product TCO.
Second, assess your resources — both the technology assets and the people involved. People are a significant portion of an organization’s technology spend, sánh it’s important lớn include this in your framework.
From here, map your resources lớn actual solutions — the things you are building or maintaining. These can be standalone applications, services used by internal and external customers, or products.
The final step connects these solutions lớn your desired business outcomes. Without this last step, business executives struggle lớn understand why their investments are worthwhile. Tying investments lớn business outcomes enables a shared understanding and a common phối of data lớn make decisions.
The TBM approach and taxonomy
TBM communicates the cost of IT along with the business services and value it provides. This shifts the conversation from the cost of running the business lớn investing in growing and transforming the business.
Changing the business is often the tên miền of software and systems development and digital transformation, a significant aspect of SAFe. Therefore, SAFe focuses on the areas where IT leaders hope lớn increase investment. On a related note, according lớn Apptio, the application IT tower is the single largest resource tower by spend, and this tên miền is where SAFe has the most strength. As a result, successful SAFe implementations can be showcases of value that change-the-business investments can yield.
Once the business and IT speak the same language and are on the same page, they can better collaborate lớn lập cập the business more economically and effectively. Finally, both TBM and SAFe seek lớn empower product managers with accountability for both the run-the-business and change-the-business spending on their products.
Traditionally, project managers focus on new development or enhancement work that fell under changing the business. Today, product managers often manage the entire lifecycle of spending, including traditional maintenance and tư vấn activities that fall under running the business. In turn, product managers optimize run-the-business operations (e.g., by rationalizing their applications or modernizing their platforms) lớn không tính phí up resources (people, time, and money) for change-the-business investments.
To improve alignment between IT, finance, and line-of-business leaders, TBM offers a standard taxonomy (Figure 2) lớn describe cost sources, technologies, IT towers (functional areas), products, and services. Essentially, the TBM taxonomy creates a common language, sánh that terms lượt thích “server” and “compute” have the same meaning lớn business, finance, and IT. The taxonomy was also designed lớn include the same types of underlying costs, allowing them lớn be calculated using the same or similar methods. In turn, a common taxonomy provides a valid comparison between technologies and services lớn peers and third-party options, such as public cloud offerings. The TBM Council developed the taxonomy, and it is maintained by its standards committee, a group of industry IT leaders.
The TBM taxonomy allows agreement on varying definitions of IT cost components, but it does not present the information in a way that can be understood by different stakeholder groups. The TBM model (Figure 3) sorts out this “Tower of Babel” with connections between the taxonomy cost elements that are relevant lớn business stakeholders, IT decision-makers, and finance. Specifically, the TBM model defines the business rules for allocating cost from lower layers (general ledger) lớn upper layers (business capabilities and units). Implementing the model requires tooling lớn gather data from various systems and perform the translation between layers.
SAFe practitioners who learn TBM will be able lớn help organizations become more conversant in a new common language for IT. Since TBM is extensible, SAFe practitioners help organizations add specific categories and subcategories lớn classify better software and systems costs, which can be loaded into the TBM model.
The TBM framework
Although the taxonomy and model provide the fundamental language of cost reporting, the third and most essential part of TBM — the business of IT — is best reflected in Figure 4. The TBM framework helps IT optimize run-the-business and change-the-business spend lớn achieve better business value, based on the strategy and goals of that enterprise. The TBM framework, which is its most strategic part, is typically where SAFe is positioned and provides the integration point for the two frameworks.
Since the TBM framework packs many critical concepts into a small picture, the discussion can be simplified by breaking down its ten core tenets into three main categories:
Fostering a business culture in IT, consisting of two organizational elements:
- Positioning for value
- Continuously improving
Four disciplines for value delivery, which include:
- Create transparency
- Deliver value for money
- Shape business demand
- Plan and govern
Four value conversations for better business outcomes. These enable the right discussions with the business and consist of:
- Cost for performance
- Business-aligned portfolio
- Investment in innovation
- Enterprise agility
We will discuss each category in the next section.
Foster a business culture in IT
TBM helps foster a business culture within IT by making what the TBM Council refers lớn as two organizational changes: position for value and continuously improve.
Position for value
A fundamental starting point for TBM involves answering the question: How bởi we position IT for value? Furthermore, how bởi we create an organizational structure that naturally orients people toward the delivery of value lớn the customer? Figure 5 shows the different technology business models and partnership levels defined by TBM.
Many businesses view IT as an expense center or a service provider. That perception often leads lớn budgets and plans being considered as an afterthought. Instead, IT organizations should strive lớn become value partners who work in close collaboration with the business lớn meet its objectives or become business drivers, where technology is the business. Typically, when SAFe is applied in IT, its primary purpose is lớn support:
- Custom application development
- Development of specialized business applications or configuration of commercial-off-the-shelf solutions (COTS), such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM)
- Solutions for finance, accounting, human resources, and more
Therefore, SAFe is already well-positioned lớn help IT become better value partners and business drivers.
In SAFe, organizing around value is accomplished by first identifying value streams in a portfolio and then launching Agile Release Trains (ARTs) lớn realize them. Each ART contains 5–12 agile teams (50–125 people), working together on the same phối of solutions, as well as all the business leaders and stakeholders needed lớn make these solutions successful.
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Instead of assigning a new project team for each new solution and request, the ART creates a long-lived organizational, cross-functional structure (e.g., customers, business units, Agile teams, tư vấn, operations compliance, security) that brings work lớn a stable group of people. This structure helps ensure a rapid plan-do-check-adjust (PDCA) iteration cycle from idea through implementation lớn deployment and release.
SAFe’s organizational approach enables moving from managing projects lớn developing and maintaining valuable products and services. Managing projects focuses on the completion of tasks, while a product-and-services approach has a stronger and more durable focus on achieving tangible business outcomes.
SAFe emphasizes the role of business owners, which are a small group of stakeholders who have the primary business and technical responsibility for governance, compliance, and return on investment (ROI) for a solution developed by an ART. They are key stakeholders who must evaluate fitness for use and actively participate in certain ART events. Consequently, business owners can links IT delivery with business purpose, helping position the IT organization as a value partner or, in some cases, a business driver.
TBM proposes that the continuous improvement of IT financial management and operational performance is critical lớn identifying opportunities lớn optimize technology costs and investments. With better data, it’s possible lớn drive value conversations with business peers that justify the cost of IT and drive continuous improvement and value delivery. The following are some examples of areas that TBM focuses on improving continuously:
- TBM practices: Vendor performance, capacity planning and procurement, problem management, service portfolio management, demand management, asset, and configuration management
- TBM operations: Month-end close, monthly or quarterly bill of IT, quality reviews, performing ad hoc and what-if analyses for decision-makers, setting and adjusting service rates (prices), monthly budget variance analysis, and operational reviews
In SAFe, the imperative for continuous improvement arises from the House of Lean, where the focus is on “relentless improvement” of delivering value in the shortest sustainable lead time with the highest possible quality. SAFe practitioners put relentless improvement into practice through team retrospectives, the Inspect and Adapt (I&A) sự kiện, and the continuous drive toward technical improvement. SAFe offers the mindset and practices for technical excellence through its Team and Technical Agility competency, built-in quality practices, Agile engineering and architecture practices, and DevOps. Communities of Practice (CoPs) and Agile Portfolio Operations also tư vấn relentless improvement, which permits sharing execution patterns across the portfolio and pursuing operational excellence.
The four pillars of value delivery
TBM promotes four disciplines for optimizing value delivery. These disciplines, described in the following subsections, help improve and accelerate internal IT decision-making by highlighting the sources and costs of waste, which drives corrective action and accountability.
1. Create transparency
It’s important lớn create transparency by translating spending, consumption, and capacity into mutually meaningful perspectives for technology, finance, and business decision-makers. After all, each group has different objectives, uses specialized terminology, and seems lớn speak a language that is foreign lớn each other. TBM’s focus on transparency centers mainly on costs. A complete cost picture allows the business lớn make informed trade-off decisions. TBM suggests applying four dimensions of transparency:
- Controllability: The things you can change, from technology platform choices lớn solution capabilities
- Optionality: What is mandatory, such as security and compliance, and what isn’t
- Timeline: The forecasted schedule for realizing benefits
- Materiality: Whether changes in consumption will affect overall costs
Traditionally, when making decisions that involve software development, any transparency came with a bold disclaimer: Estimates of cost and timeline may not be reliable due lớn many unknowns. Agile showed that only after learning occurred was it possible lớn eliminate or reduce many of the major uncertainties. The larger and more complex the project, the more likely it would suffer wider variances from the original estimates. SAFe delivers many practices lớn provide transparency — it’s a core value.
Implementing TBM often requires overcoming a difficult challenge for transparency: extracting reliable data from disparate sources. Here, again, SAFe supports the TBM discipline of transparency. Work visualized in application lifecycle management (ALM) tooling using SAFe’s requirements model could be included in TBM reporting lớn more accurately allocate costs of product and services. SAFe’s enterprise backlog model and practices facilitate easier and more accurate capital expense reporting. Rolling up labor costs lớn business units, capabilities, and IT towers (defined by the TBM model) is a much simpler task when people are organized around ARTs and value streams.
2. Deliver value for money
It’s simply no longer acceptable lớn operate IT as an expense center. IT must become a key enabler of innovation sánh the business can survive and thrive. TBM positions IT as a value partner or business driver, as described earlier. This positioning depends on what IT delivers and why the business needs lớn acquire it from your technology organization.
TBM suggests that delivering value for money depends on being able lớn answer several questions: Is the IT group adequately funded? Does IT offer the right level of transparency? Do you have a strategy for delivering value for money and shaping demand? Do these practices align with your organization’s unique value proposition?
In TBM, better-performing IT organizations monitor and improve the cost of business application services, balance spend across the portfolio, and continuously assess performance across the portfolio. SAFe applies several principles that work with TBM lớn accomplish these goals. While each of its nine principles apply lớn TBM, only three are most relevant lớn delivering value for money:
Principle #1 – Take an economic view
- SAFe supports TBM by applying economic prioritization lớn epics and features and delivering new value early and often lớn improve the economics of solution development. This principle also offers five primary trade-off parameters (lead time, product cost, value, development expense, and risk) lớn evaluate product development economics better.
Principle #3 – Assume variability; preserve options
- This principle suggests the goal is lớn manage variability, and lớn maintain options, providing the controls and flexibility teams need lớn build great solutions.
Principle #7 – Apply cadence, synchronize with cross-domain planning
- SAFe events, such as Program Increment (PI) Planning, the System Demo, and I&A, help phối principle #7 into motion, providing frequent and regular opportunities lớn discuss and align value, cost-saving possibilities, and other options with business partners.
SAFe helps IT deliver value for money best in the application of Lean and systems thinking approaches lớn strategy and investment funding, Agile portfolio operations, and governance. SAFe helps IT execute more quickly, reduce waste and rework, and manage lớn business commitments better phàn nàn traditional (and project-oriented) software development approaches.
3. Shape business demand
One of the most beneficial disciplines of TBM is shaping business demand. The fine art of helping the business prioritize and make its needs clear, and engage in meaningful trade-off conversations, eludes many technology organizations. Business demand is usually open-ended, presenting IT with a list of urgent requests, all of which seem equally important. At the same time, IT organizations face frequent budget cuts. The result is a never-ending cycle of hyper-demand, cost reduction, and disappointment. It’s no wonder that IT often fails lớn meet the business’s needs. Systems thinking, described in SAFe Principle #2, informs us that the problem is with the system in which people work, not the people themselves.
TBM answers this problem, in part, by presenting business partners with an itemized bill of IT (often administered through chargebacks), which provides details of technology consumption. Business partners are thus incentivized lớn balance consumption with service value. As a result, applying the TBM framework enables more fruitful discussions about the cost and performance of IT products and services.
The success of TBM requires the business and IT lớn have regular trade-off conversations. SAFe offers the diễn đàn for these conversations through Lean Portfolio Management (LPM), which enable the business and IT lớn jointly agree about which strategic initiatives are worth funding, and review how well existing investments are delivering against their benefit hypothesis. (Similar trade-off conversations also occur at the local level via teams and ARTs). Figure 6 illustrates the three main elements of the LPM competency, including each element’s key responsibilities.
LPM helps determine if there is sufficient investment toward change-the-business solutions. SAFe defines several investment horizons (Figure 7), from evaluating promising new solutions (often those with the highest potential for changing the business) lớn extracting value from legacy systems (usually part of running the business). The business and IT can collaborate and agree on where investments should be made in each horizon, ensuring the right balance of investment.
4. Plan and govern
The plan and govern discipline of TBM is about collaborating with the business lớn align the IT annual budget and resource plans lớn the strategic business priorities and manage lớn the plan. SAFe helps TBM plan and govern by creating, funding, and managing value streams within the portfolio, which determine how the organization will deliver value within a particular budget. As briefly described earlier, the strategy and investment funding aspect of the LPM competency in SAFe is arguably the most important for TBM planning and governance. For example, before making strategic trade-offs, business decision-makers must have a clear understanding of the portfolio’s vision and how the business plans lớn accomplish it.
SAFe achieves this through the portfolio canvas, which identifies the specific tên miền of concern for a SAFe portfolio and streamlines planning, development, and execution across the portfolio through better alignment. One of the most fundamental questions about planning and governance is, are we investing in the things that quickly move the organization toward its strategic objectives? SAFe expresses these objectives as strategic themes, which act as the yardstick by which one can measure the alignment of work. SAFe, therefore, sets the table for achieving organizational objectives while also clearly defining the edges of that table. Portfolio budget guardrails ensure the right mix of investments for near-term opportunities, long-term strategy, and maintenance. Furthermore, business owners are engaged continuously lớn guide technology investment over time.
TBM advocates that, in the best IT organizations, P&L leaders understand the cost, performance, consumption, and capacity trade-offs that must be made lớn meet their strategic goals cost-effectively. With SAFe, these leaders collaborate with IT, in technology and business planning, confident that delivery will stay aligned with their business goals and priorities.
The four value conversations for better business outcomes
TBM offers four value conversations (Figure 4) that help foster a true partnership between the business and IT. These conversations focus on the trade-offs between cost, consumption, performance, features, benefits, capacity, and risks in the pursuit of better business outcomes. The first two TBM conversations — cost for performance and business-aligned portfolio — are typically about running the business. The last two conversations — investment in innovation and enterprise agility — are usually change-the-business discussions, which include both growth and transformation business initiatives.
1. Cost for performance
Cost-for-performance conversations focus on delivering technology solutions lớn the enterprise as efficiently as possible, enabling IT lớn focus its time and resources on the right technologies, services, and providers for the business. TBM leverages the bill of IT lớn identify unit costs or consumption patterns that may be excessive. Unit cost can be a good indicator of efficiency, enabling comparisons lớn external providers or industry peers. The goal is lớn identify areas of waste, such as excessive levels of service quality or redundancy higher phàn nàn what is needed lớn operate the business properly. In SAFe, Agile teams work in a fast, flow-based system lớn quickly develop and release high-quality business capabilities. Instead of performing most testing at the kết thúc, Agile teams define and execute many tests early, often, and at multiple levels. In this fashion, building in quality ensures that frequent changes bởi not introduce new errors and lowers the transaction cost of creating new functionality. Also, Agile teams create designs that continually evolve lớn meet current and future business needs, which improves cost for performance and customer satisfaction. With TBM in place, business owners and their stakeholders learn the cost of developing, maintaining, and supporting products and services on a more continuous basis, better enabling the value of IT investments lớn be understood.
2. Business-aligned portfolio
Business-aligned-portfolio conversations are about how lớn deliver the most value for the current level of spending. For example, bởi we spend our resources on the initiatives that get the highest possible return for our business? TBM suggests organizing the IT portfolios of services, projects, vendors and technologies lớn be optimized and aligned with the goals of the business. Doing sánh involves trade-offs, such as shifting people, resources, and time spent on items in each portfolio. Application rationalization and data consolidation initiatives, driven by cost-for-performance conversations, deliver a leaner technology portfolio and an IT organization that can better adapt and respond lớn change faster.
As discussed earlier, SAFe works with TBM lớn accomplish the goal of moving from projects lớn products and services by organizing teams in value streams and ARTs. What’s more, the Lean Portfolio Management competency in SAFe offers several practices for moving from traditional lớn Lean-Agile approaches for managing the technology portfolio of solutions and investments. These practices foster a business-aligned portfolio for software and system development initiatives.
3. Investment in innovation
Investment-in-innovation conversations are about how lớn allocate the proper amount of people and resources lớn develop and maintain new and enhanced products and services lớn improve business innovation. The focus here is lớn ensure that the technology organization spends enough money on new and enhanced services and on business innovation and governs these investments wisely. These conversations require a more comprehensive oversight of innovation initiatives and programs while shifting lớn a service-oriented approach for managing investments. Here again, SAFe helps address investments in innovation through the LPM competency described earlier in the Plan and govern section. Specifically, SAFe’s Lean budgets and guardrails help ensure that the mix of investments addresses both near-term opportunities and long-term strategy. Additionally, most organizations will generate more good ideas phàn nàn they can fund. SAFe’s participatory budgeting and economic prioritization practices help address this demand overload while ensuring that value streams receive the necessary funding lớn lập cập, grow, and transform.
4. Enterprise agility
Enterprise-agility conversations are about how lớn respond and adapt more quickly lớn new business opportunities and threats. Cost structures, staff, skills, and waterfall methodologies prevent some CIOs from reacting quickly lớn new demands. Therefore, many CIOs are adopting Agile methods, DevOps, and tooling. The increased use of automation across the entire organization reduces resource needs by as much as 40%-50% in some areas. TBM improves agility by allowing you lớn change your cost structures, leverage the cloud, exploit decentralized IT decision-making, and use data lớn make better decisions faster.
By adopting SAFe — and applying its well-described phối of values, principles, and practices — organizations achieve enterprise agility and realize greater individual and business benefits. However, achieving enterprise agility is no small feat. Therefore, SAFe provides an implementation roadmap based on proven organizational change management strategies, which describes the steps an enterprise can take lớn implement enterprise agility in an orderly, reliable, and successful fashion.
SAFe and Apptio Targetprocess
The metrics in TBM are supported by solutions such as Apptio Targetprocess that categorize KPIs and metrics into four categories, which are depicted in Figure 8. Apptio Targetprocess accelerates business agility by enabling organizations lớn rapidly scale and adopt Agile practices while connecting business strategy lớn team-level execution. Of course, organizations can implement their own reporting solution if they have the TBM knowledge and technical expertise lớn build their own custom solution using data warehouse technologies. SAFe supports a wide variety of metrics that help answer many of the questions posed in the KPIs and measures in Figure 8.
|Financial Fundamentals||Delivery||Innovation & Agility||Business Value|
Technologists and business professionals lớn collaborate on changing the business
Applying TBM with SAFe provides a powerful combination lớn enable IT lớn deliver more value with more transparency and lớn achieve greater business agility and partnership with the business. Together, these frameworks help IT shift run-the-business spending lớn change-the-business investment, which results in faster and better business value, aligned with the strategy and goals of the enterprise.
For IT organizations doing Agile who hate the inefficiencies of their project-centered finance model, Apptio Targetprocess will help them lớn plan and prioritize the optimal mix of portfolio investments by considering the resource costs and capacity; accelerate value delivery; and optimize resources.
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