Craig Wishart, Partner and CIO at KPMG Australia and Head of ASPAC Technology Services Group, and Ben Allard, Vice-President and General Manager APAC at Apptio, tell Intelligent CIO how CIOs can leverage Technology Business Management (TBM) to build trust and credibility in the board room.
IT leaders face a financial battle when demonstrating ROI in a turbulent economic landscape.
Intelligent CIO has spoken to Craig Wishart, CIO at KPMG Australia and Head of ASPAC Technology Services Group, and Ben Allard, Vice-President and General Manager APAC at Apptio, about managing this and the role that Technology Business Management (TBM) plays – an issue especially important when you consider Asia-Pacific IT spend is predicted to reach almost US$924 billion this year.
Wishart tells us that these days: “CIOs and tech leaders are operating under a different set of T&Cs – trust and credibility.”
However, Allard notes that despite the need to demonstrate value and ROI, many business chiefs, CIOs and CTOs don’t have a clear view of all costs pertaining to technology to make informed decisions.
Despite their increasingly strategic business roles, as reported by analysts, transparency is limited – due to the continuously changing and increasingly complex technology portfolios.
Allard says it’s no surprise many Australian enterprises feel pressured to reduce IT spend when there is an inability to demonstrate value; Apptio recently conducted research which found as many as 63% of companies stating they need new IT capabilities and better financial management to optimise their costs and make better strategic decisions.
According to Wishart, using spreadsheets to manage costs is like solving one side of a Rubik’s Cube – solving the finance puzzle is multi-dimensional and as such requires a different way of thinking.
Technology Business Management (TBM) is a methodological framework that provides a multi-dimensional view of financial/spend data incorporating the many different and varied cost models now under the management of CIOs and financial controllers.
TBM is not a defensive play – it’s a means of engaging boards, executives and all stakeholders in an informed and productive data-driven discussion to ensure technology is aligned to strategy and delivers expected business value.
KPMG Australia itself leverages Apptio and the TBM framework. The initial goal was to generate visibility into the company’s services, which it defines as an increasing priority for its customers.
This was one of the issues we considered with Wishart and Allard below.
KPMG Australia leverages Apptio and the TBM (Technology Business Management) framework. Can you explain what TBM is and what Apptio offers in this respect?
Allard: At its core TBM is really about having value-based conversations with all stakeholders across the business. It’s about bringing that group of individuals together to have a data-driven discussion around how they can continuously improve technology and business outcomes for the organization.
That involves a number of things – creating trust with transparency, making sure the portfolio is aligned to the business strategy and ensuring the company has the right mix in terms of investment and innovation.
So when a company is disrupted, the question is: where is the opportunity to use data to make decisions at speed?
When you look at Apptio there are three core parts of our solution that cover the full technology portfolio across on-premise, cloud and agile/project-based investments.
Organizations can choose which solutions address their most pressing priorities and align with their maturity, enabling them to get started with TBM and progress over time.
Craig, how successful has your use of Apptio and TBM been?
Wishart: I think the question for me is more how we measure and define success – evidence of ‘trust building’ is certainly a leading indicator.
We talk a lot about the changing role of what we think the CIO is – what I refer to as the new Ts and Cs. These have shifted and are now more about how trust and credibility is going to drive your influence and drive the authority that you have within the organization you support.
We centred trust around a couple of key words but one of them was ‘transparency’ – how transparent could we be with our technology costs? And then from that, how could we take that transparency and turn that into insights that people could use to help shape their own business and control their own cost base?
On that basis, I’d say we’ve demonstrated success. We’ve been able to take our budget and distil it down to a granular level using the TBM taxonomy, to a point that people can understand where their spend is.
I think that has become increasingly important in a cloud world where companies often experience bill shock because they simply don’t know what it costs to run a technology environment ‘as-a-service’.
By leveraging Apptio Cloudability and TBM taxonomy, we’ve been able to show people not only the cost of the service, but help them understand how they can influence how that service is used to lessen their cost and ultimately manage profitability.
Combined, these factors build trust and credibility for CIOs as they work with the business to help them run it. That’s a fundamental shift for the CIO and technology leadership role.
How can IT leaders use TBM to engage boards in a meaningful discussion about ensuring technology is delivering business value?
Allard: The core component is the ability to capture the expected business value of a technology investment. That starts all the way back from the ideation of that investment, through to the actual delivery, and finally to support reporting on the ‘actual’ versus ‘expected’ benefits.
In that board-level discussion on the business value of technology investment, it’s critical to extend beyond just ROI metrics, and instead look at focusing on key areas – whether it be reduction in cyber-incidents, or increasing use of self-service products and services, for example – that translate technology costs in business terms. This is really that leap to enable a differentiated conversation with the board.
A perfect example of that is one of our customers, Saxo Bank, which justified its investment in Machine Learning based on the ability to accelerate onboarding customers to its trading platform. The result was an average onboarding journey being reduced from fixed days to less than one hour.
TBM helped Saxo Bank communicate the business impact of this technology investment and changed the conversation with the board from ‘Why does technology costs so much?’, to ‘Where can we make additional investments to accelerate our strategy?’
Wishart: I think boards, as executives, are still learning what questions to ask. The separation of technology from business process is now almost impossible. The two of them are very clearly together and boards and executives are learning now how best to engage with technology leaders to ask the right questions.
But I do think consistently they asked these sorts of questions which are: ‘What’s the best way that we could prioritise our investments in technology?’; ‘What’s the best way that we could start to think through measuring return on investment (either through profitability or productivity or even end-user value)?’
The other aspect you’re looking at is what it really costs to run the business and what opportunity there is for either lessening the costs or getting more value from the cost base?
There is also more discussion about moving quickly, with speed. My sense is we need more focus on velocity – speed with focused direction.
And then the last one is really how do you have these balanced discussions at an executive or a board level, where you’re confident that the people around you all speak and understand the same language. Technology leaders have to use language which builds trust and understanding.
You were talking about CIOs operating under a different set of Ts and Cs. Could you just elaborate a bit more on that?
Wishart: In the early days of my career it was pretty simple. Typically, CIOs managed data centres, procured hardware with often long lead times and told the business ‘come back in three months when we’ve procured it, we’ve racked it and we’ve put some software on it and we’ll tell you what it’s going to cost.’
If I go back to 2000, HTML and wireless markup language for mobiles was emerging. However around about 2010, cloud services were truly emerging.
People joining a business were far more technically literate and expectations of what was good technology and user experience was shaping up. Technology was becoming more accessible and vendors started working directly into business leaders for support.
For CIOs this meant pivoting quickly to becoming more commercial, business savvy or risking disintermediation from the business discussions.
So CIOs have had to evolve the role, placing emphasis on what is often referred to as soft skills. If we’re going to be at the front end of the conversation, if we’re going to be considered to be at the front end of decisions, we’re going to have two things: we’re going to be trusted and we’re going to have credibility that we can back up what we say we will do to help this business go forward.
And that’s why I think the game shifted; because 20 years ago you didn’t have a choice. If you wanted something done, technology would lock you up and say: ‘Guess what, I’ll see you in six months.’
You had no choice. Everything changed with mobility and SaaS offerings in the market that suddenly gave the business a choice and whether they used you or didn’t. And from my perspective I think the only way to stay up front and be influential is to have trust and credibility.
Further, cost transparency and providing clarity of how best to optimise the spend is simply now expected. CIOs who don’t will do so at their own peril.