Alfabet and the TBM framework

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Understand how IT supports business and mission priorities & at what cost

To optimize IT investments, your agency and IT stakeholders need a common understanding of IT costs and how IT supports the overall mission. That’s why Software AG’s Alfabet implements the Technology Business Management (TBM) framework at the heart of IT portfolio financial management.

Know Your spend on IT
When you use TBM in Alfabet’s IT portfolio management solution, you can confidently make those tough decisions on prioritizing and rationalizing IT spending—without compromising IT support or alignment with business strategy. You gain transparency between of business priorities, IT cost drivers, the project portfolio and the IT landscape for CapEx prioritization and OpEx management so you can make informed decisions to reduce costs and deliver sustainable value from IT.

With Alfabet and the TBM framework, you’ll be able to focus on the right projects and most valuable initiatives.
You can answer questions like:
• What are my current costs to deliver business capabilities and outcomes?
• Is there sufficient IT support for critical business capabilities?
• Where are IT costs and planned IT investments disproportionate to business strategy?
• What is the impact of operational cost cutting and cancelled projects on critical business areas, current projects and future business plans?

Key benefits
Enjoy the confidence of having a defensible portfolio of projects.

With Alfabet and TBM, you can:
• Map IT spend to business usage
• Assess whether IT spend supports business and mission strategy
• Free up budget for digital business innovation
• Measure proposed projects against strategic KPIs
• Compare cost scenarios for better decision making
• Plan change so it doesn’t impact critical business processes
• Ensure IT provides true business value

You’ll know:
• Which projects to advance or put on hold
• How to change the provisioning of IT services—for example, comparing cloud versus on-premise deployments
• Which IT systems to consolidate or retire due to redundancy
• Where to tweak vendor contracts for price optimization
• And much more

Teaming up for better insights
Cost management is a business discipline that is part of IT planning and governance. It requires a formal financial framework for budgeting, cost aggregation and allocation models, chargeback schemes and their relationships to business strategy. It must be underpinned by general accounting principles (such as activity-based costing). The financial framework must clearly identify all IT cost components and the fundamental drivers and behaviors of these costs from which the appropriate cost control strategies can be devised. It requires an information give-and-take with the corporate financial management systems that are in place. Alfabet integrates with ERP and other relevant systems, such as Apptio®, to exchange information relevant for IT cost optimization acting as the central hub for budget-informed IT portfolio planning and management.

Features
• Familiar TBM views for business, IT and finance
• Full support for the TBM framework
• Crosswalk from an application view to a services view for cost management
• “IT Towers” are implemented as Alfabet cost center groups
• “Cost Pools” are implemented as Alfabet cost center types
• Computation of aggregated costs over time for cost types, rolling up through cost pools, IT towers, services to the agency organizations or capabilities
• Association of assets—for, example, applications, projects, technology components, services and infrastructure —to cost pools
• Finance dashboard and reports that highlight TBM-related financial positions

How Alfabet works with TBM
Capturing IT costs merely as general overhead keeps the enterprise from truly understanding IT’s real contribution to the mission. Often you can’t see where to free up financial resources for innovation. You need differentiated methods for viewing, measuring and planning. That’s where the TBM framework comes in.

The TBM framework in Alfabet:
• Associates IT costs to cost pools, IT towers, business and IT services, up to business capabilities and business units
• Demonstrates how IT supports the mission
• Provides a platform for collaborative business-IT planning

Alfabet then maps IT costs to IT elements and aggregates them in various combinations that are relevant to the business. IT achieves a clear understanding of costs for more meaningful benchmarking, project proposals that are more precise, reliable budgeting, and well-founded investmentdecisions.

Transparency into IT operations costs— for example, per application or business service—empowers IT to better sustain business operations and improve cost/ performance ratios.

Highly configurable, Alfabet supports TBM-relevant artifacts and can be adjusted to customer specific variations or other cost frameworks.

Take the next step
To learn more about Alfabet and the TBM framework, talk to your Software AG representative, today!

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