Modern enterprises have shifted their focus to user-oriented technology development and deployment, whether the users are internal employees or external consumers. In contrast, infrastructure often sits at the bottom of the food chain, evolving slowly and being positioned as the "grunt work" of business operations.

Daniel Schmutz, Chief Technology Officer and Chief Operating Officer at Credit Suisse, said that different business units and application development areas rely on infrastructure, which spans from networks to databases and increasingly the cloud. Schmutz is responsible for the organization of all infrastructure globally at this financial services company.

But Credit Suisse realized that the current infrastructure operating model would be difficult to sustain in the future. To remain relevant, its infrastructure needs to become more service-oriented and aligned with customer needs. Schmutz told CIO Dive in an interview that infrastructure services, in fact, need to start operating like an independent business.

Last fall, Credit Suisse introduced Technology Business Management (TBM), a taxonomy that enables a deeper understanding of technology spending and investments. From a CIO perspective, this spending approach helps IT organizations identify potential duplicate costs and outline business cases for technology projects. This is especially important as enterprises migrate to the cloud—understanding cost associations helps reduce unnecessary redundant spending.

TBM first took root in the financial services industry because that industry was already accustomed to using data to manage and calculate product profitability. Bryan Mueller, director at Information Services Group, told CIO Dive that although financial services companies did not call it TBM at the time, they already had basic standards and used data to understand product profitability.

The federal government is also pushing for TBM adoption to better understand the costs of its massive legacy technology portfolio. David Shive, Chief Information Officer at the General Services Administration (GSA), said at a TBM conference in Washington on Wednesday that stakeholders outside the agency—whether officials from the White House or Congress—demand transparency and clear explanations of technology costs. The framework allows for decision-making based on outcomes rather than on "anecdotes and feelings" when making long-term technology investment decisions.

This methodology is growing in popularity among CIOs and other IT business decision-makers because it advocates the idea that technology departments should operate like businesses, bringing with it a delivery-oriented view of technology.

Credit Suisse's TBM practice

As a purely technical support function, Credit Suisse's infrastructure department was not aligned with the outputs and outcomes of the different businesses within the organization. For example, infrastructure was deployed globally, while application development areas existed within each business line. With limited product management ownership, the infrastructure department realized it needed to better meet customer needs and take responsibility for end-to-end services. In this model, infrastructure requirements would be directly linked to products.

Schmutz said Credit Suisse's infrastructure department is deeply involved in bank operations, but only 15% of its $1 billion budget is used to change the bank, while the remaining 85% is used to keep the bank running. This makes it difficult for the infrastructure department to proactively plan technology business cases and thereby add value to the bank, rather than merely acting as an "infrastructure provider." Schmutz said, "In other words, we said we need to transform our organization to become a more value-driven, extremely customer-oriented company."

This is a massive undertaking, and Credit Suisse's infrastructure department began applying TBM in phases. The first step was to truly understand the needs of internal customers and the business. Schmutz said the company then concluded that the future operating model for infrastructure leans more toward being a "service broker" rather than a role that purely manufactures or creates established hardware and software.

Shive believes that for TBM to work, it must be a joint implementation between finance and technology, a combination of CFO and CIO responsibilities. Otherwise, any initiative to increase cost transparency could be hindered by a lack of cross-departmental understanding of long-term investments. For example, GSA still uses a 25-year-old mainframe to run part of its infrastructure. Because of TBM, Shive understood the unit costs and knew that if modernized, per-user costs would rise but user presentation would not change, so migration would be wasteful.

"Not smooth sailing, nor easy"

Business leaders across industries are looking for solutions or methodologies that can simplify large-scale transformation. Whether it is a finance-based TBM approach or clearly defined business structures and operations within enterprise architecture, leaders will adopt the strategy that best fits their business needs. But success is not guaranteed.

Mueller said, "It's not smooth sailing, nor is it easy. Everyone understands at the start that there will be data issues. Your models and outputs are only as good as your data quality." Imperfect data can prevent organizations from adopting a spending methodology. But Mueller believes that once companies start discovering data issues, they will resolve them. Understanding infrastructure costs will be the starting point for most organizations adopting the taxonomy; migrating the rest of IT to TBM will happen gradually.

Shive advises that when implementing TBM, "don't wait, start now." Once business value becomes apparent, organizations can begin to iterate and add incremental changes.

However, stakeholders will be invested because of the conceptual and financial transformation that TBM brings. Schmutz said C-level executives have reacted positively to TBM because "they realize we can help reduce the bank's costs." Credit Suisse is in the middle of a three-year cost-cutting program while trying to increase revenue. C-level executives like the cost-reduction element of TBM because technology departments are often huge cost generators.

In the early stages of TBM adoption, Schmutz plans to return to C-level executive meetings in Q3 or Q4 with the foundation needed to implement the methodology. From there, the organization can gradually expand TBM.

Schmutz said, "The first thing we need to do is bring everything together. This is foundational work. Some of my friends underestimate this effort. But if the foundation is not solid, then all the data you have is garbage."