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IT environments are constantly growing more complex, with organizations rolling out AI agents and LLMs, operating in multiple clouds, and anticipating breakthroughs like quantum computing.

At the same time, many CIOs seem to struggle to demonstrate the value of IT to the broader business because other departments often view their domain as a cost center.

As a result, many organizations, including the US Army, UPS, and MasterCard, have turned to (TBM) to better align IT spending with business value. Although TBM has been around for a while, advocates of the practice say it’s more valuable than ever because of a renewed growth in tech investment. More than 90% of IT leaders, in fact, expected their 2025 budgets to increase when surveyed in 2024.

“IT spending has grown faster than any other corporate function for the last 20 to 30 years,” says Matt Guarini, executive director of the advocacy and education group, the TBM Council. “IT is getting more complex than ever. There’s more emerging technology coming in.” Membership in the TBM Council has also grown by about 9% in the last six months, Guarini adds.

TBM is a discipline designed to provide an IT spending and value framework for CIOs, CTOs, and CFOs. The goal is to give such leaders widespread visibility into planning, benchmarking, and optimization of their IT investments, according to the TBM Council. Cost transparency and accurate budget forecasting are two major parts of the TBM framework, Guarini says.

While many organizations have turned to FinOps to monitor cloud spending, TBM focuses on it more broadly, but may include FinOps as a piece of the puzzle, he says.

AI pressures

The rapid adoption of AI over the past two years has demonstrated a need for IT spending to be better connected to business results, Guarini says, as CIOs are under pressure to deliver ROI from AI projects.

“There are a bunch of stakeholders with high expectations saying, ‘I’m giving you all this money, and I’m not funding my sales director,’” he says. “‘I’m expecting you to drive revenue growth and increase productivity of my teams.’”

The US Army adopted TBM practices about five years ago in its financial management and contract processes, says Katie McAteer, chief of strategic business transformation and optimization there. The US Office of Management and Budget has also pushed agencies to use TBM practices since 2017.

TBM achieves the goal of connecting the Army’s IT spending to its mission by allowing IT, business, and financial managers to use a common language when talking about IT costs, McAteer says.

“We were able to use the TBM framework to help us see a holistic view of what we were spending on IT,” she adds. “We use the framework to make informed invest and divest decisions.”

It’s important for the Army to have a wholistic view of its IT spending, given that it operates under tight budgets.

“In the federal government, we always have the responsibility of utilizing taxpayer dollars effectively and efficiently,” she says. “Working within our fiscal limitations, we use the framework to communicate and align our costs, and prioritize and rationalize IT spending.”

The growing importance of IT

Another TBM convert is MasterCard, which has been using the framework for about seven years, says George Maddaloni, its EVP and CTO for operations. The company relies on IT to drive innovation, efficiency, and competitive advantages.

“IT spending has evolved from an operational necessity to a key component of business strategy,” he says. “We leverage TBM’s approach to continue to have the clarity and accountability necessary to make sure every tech investment is aligned with the broader goals of the business.” 

TBM has been particularly useful as MasterCard embraces virtualization, cloud-based resources, and AI, he adds. Energy use has become an important expense to monitor as well, along with more traditional IT costs and risk management.

“It’s important for organizations to carefully monitor consumption and usage,” Maddaloni says. “Frameworks that provide visibility into our IT spending and its business impact allow us to make more informed, strategic decisions.”

TBM alternatives

Logistics provider KUOG has been using TBM since its inception in 2016, says CEO and president Roy Rucker Sr. But there are several alternatives, including value stream management, total cost of ownership analysis, and IT service management, but all lack some advantages that TBM provides, he says.

“TBM done right ultimately delivers cost transparency, value driven IT investments, and continuous optimization of technology and the technology budget,” says Rucker, also CEO and president of TRECIG, a cybersecurity and IT consulting firm.

While many organizations swear by TBM, the practice also has its detractors. Some organizations may use it to justify IT spending after the fact, instead of starting with their business needs, then choosing the right tech solutions, says Vaclav Vincalek, CTO and founder of Hiswai.com, an AI-powered research and insights platform. “IT teams should learn what the customer truly requires and how best to serve them,” he says.