Making Digital Transformation Work With IT Cost Management And TBM

The four-step process helps keep every stakeholder aligned


Digital transformation is taking on new meaning as it becomes more tactical and relevant to specific lines of business within the enterprise. In an ISG Insights™ paper we recently co-authored titled 'Driving Digital Strategy Through TBM – A Four-Step Approach,' we outline four steps to address the common challenges companies often face in their digital transformation initiatives. These steps leverage Technology Business Management (TBM) to synchronize the Finance and IT functions and keep costs under control from the very outset of planning.

In our survey of IT and Finance professionals in the TBM community who are responsible for IT cost management, we found that 75% of their respective organizations have some type of digital transformation already underway. Despite overwhelming interest, though, many business leaders do not have an effective way to build a business case across the organization to encourage the follow-through needed to derive benefit from those transformations. But launching a digital transformation isn’t just about execution, it’s about aligning Business, IT and Finance around the new technologies and operating models. The same survey showed that 64% of organizations lack a formal process to align these digital transformation initiatives to measure, track and monitor key performance indicators.

The first step – identify business stakeholder needs – notes that there are three stakeholders involved: Finance, IT and the business. The overarching business perspective must be communicated to and taken into account by all other aligned business units, and from that, IT will gain a deeper and more meaningful understanding of the requirements. It also will allow IT and Finance to develop a plan to manage the IT spend.

From there, we expand the business case for technology using the TBM framework to quantify costs and expected returns, and build a business case. One important part of this phase is to show how new technologies may be re-used for future projects as well, thereby increasing the value of the investment.

The third step is to gain support from throughout the enterprise by presenting it to business stakeholders to align the IT initiative to all relevant lines of business, and finally kick off the project and use a Multidimensional Framework (MDF) approach to prioritize the dimensions of People, Technology, Analytics, Strategy, Process and Data to ensure greater acceptance and success. During this phase, demonstrations and proofs of concept are essential to gaining support, in showing all stakeholders what IT will deliver, and how it will benefit them.

Lastly, the fourth step is project kickoff and TBM. During this step, collaboration between IT and Finance focuses on the specifics of how to deliver the benefits of the initiative, while taking a real-time view of the efforts that must be invested to make it happen. To do this, a multi-dimensional framework for leveraging TBM prioritizes dimensions of People, Technology, Analytics, Strategy, Process, and Data to support the project.

Our four-step process helps keep every stakeholder aligned, so that the transformation can produce the highest levels of success.


Alex-Paul Manders is TBM Practice Lead for the Americas at ISG (Information Services Group). He works closely with enterprise leaders, IT finance managers and IT business unit leaders to help implement the discipline of Technology Business Management (TBM) into their organizations and optimize their enterprise IT. Alex advises both commercial and public sector organizations on the adoption of TBM programs, designs fact-based analytical strategies and supports broader IT transformation initiatives. His development of a strategic TBM multi-dimensional framework addressing people, process, data, analytics, technology and strategy is part of ISG’s industry-leading set of market best practices and methodologies.

Alex Bakker is a Principal Analyst for ISG Insights. Conducting research and writing about emerging trends and markets, he focuses specifically on integration, analytics, social business and super emerging technologies, including the Internet of Things, 3D printing, virtual and augmented reality and drones. Alex manages and analyzes survey data, conducts briefings and interviews and publishes research documents as a part of the ISG Insights team.

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