By Larry Blasko, President of Operations at Apptio
So many things about the current rise of AI are historic-including
its cost. On top of the ever-growing heap of enterprise IT expenses, the capital
needed to implement AI at scale has pushed many organizations to an inflection
point: To free up the necessary budget and to demonstrate the business value of
their investments, they're realizing they first need to establish a much clearer
picture of their technology spending.
That's why 2025 is shaping up to be the year that technology
business management (TBM) frameworks rise from an enterprise priority to an
absolute necessity. By integrating tools, processes, data, and people into a
unified TBM framework, organizations will have the budgetary visibility to run
leaner and smarter, streamlining their spend and fueling innovation with much
greater efficiency.
The State of Disorganization
Compared to other past technology imperatives, scaling enterprise
AI demands much more careful investment and planning. Between factors like
infrastructure upgrades, data management improvements, and talent acquisition, doing
AI properly requires a lot of capital and cross-departmental coordination. To
undertake investments of this scale, you need a comprehensive picture of your
budget and the business value your planned transformation will deliver.
That's where many organizations are running into trouble. Despite 91% of tech leaders expecting IT budget
increases this year, 55% of business leaders say they lack key
information to effectively evaluate tech spend. There are numerous reasons for
this opacity, but a predominant factor is the decentralization of procurement. Over
the past several years, enterprise technology spending has increasingly been
driven by entities outside of traditional IT departments. When each business
division is empowered to source its own tools, misalignment is inevitable. And without
a system in place to enable a centralized view, accounting is a struggle.
In large organizations, this translates to a ton of waste. Infrastructure
is overprovisioned, unauthorized "shadow IT" applications proliferate, and as
much as 25% of enterprise software goes unused while their
licenses gobble up budget. With nearly 20% of businesses spending up to $12 million
annually on SaaS, this translates to millions of dollars that could be funneled
into innovations like AI. Add in mounting technical debt from legacy systems,
and the case for implementing a strategy to bring wasteful technology spending
under control becomes undeniable.
Like the consumer finance applications that help individuals manage
their expenses on subscriptions like streaming services, enterprises need software
that provides single-pane visibility into their technology spending. But to get
the most out of these applications, organizations must also establish a
framework that not only optimizes existing investments, but also provides
strategic direction for driving business value.
A Framework for Change
Simply put, TBM is an organizational playbook for transforming IT
investments from cost centers into engines of business growth. The concept was
developed in collaboration between tech and finance experts and has been adopted
across nearly every industry by businesses looking to get smarter about their
technology dollars. And as spending on AI continues to rise, TBM is evolving
from a way to gain ground on competitors to a necessity for sustained
innovation.
Standardization is at the heart of TBM. This begins with a common
language that breaks down communications barriers and facilitates collaboration
between IT, finance, and business teams. From there, organizations can start aligning
on a standardized approach to tracking and allocating technology costs. Instead
of getting lost in complex spreadsheets, TBM uses smart allocation strategies
that show exactly where and how technology dollars are being spent. This means
leadership can see the real value behind each tech investment, not just the
price tag.
Implementing TBM typically involves specialized software that
pulls together financial and operational data into a unified model. These tools
help organizations track KPIs across different areas like financial efficiency,
technology delivery, and business impact.
Next-Level Insights
Once businesses establish a TBM framework, they can unlock a
plethora of budgetary optimizations that go far beyond what's possible from ad
hoc adjustments.
-
Vendor Management and E-procurement: By implementing e-procurement
software as part of a TBM strategy, businesses can improve spend visibility,
reduce shadow IT spending, and identify opportunities for supplier
consolidation or negotiation.
-
Service Consolidation: Organizations can identify and combine
multiple services or platforms into more efficient, unified solutions. This can
reduce redundancies and simplify management, leading to lower overall costs.
-
Resource Utilization Optimization: TBM enables more accurate
tracking of resource usage, allowing for usage-based cost allocation. This is
particularly useful for optimizing cloud spending.
-
Application Portfolio Optimization: Businesses can quantify the
value of their applications relative to their costs. This insight helps in
strategically reducing investments in low-value applications and reallocating
resources to high-impact areas. It can also extrapolate the true costs of
maintaining outdated software, encouraging migration to modern, cloud-based
solutions with better long-term value.
Then there's AI. Equipped with the preceding capabilities,
enterprises will not only free up more budget to scale their AI deployments, but
they'll also have the structures in place to make it more effective. This
includes identifying the business use cases where AI will have the greatest
financial impact, as well as where this impact aligns best with business goals.
In addition, the TBM framework will provide the means to accurately assess
their AI deployments' ROI in hard dollar figures-a capability with which many
businesses are still struggling.
2025 is shaping up to be a pivotal year for the momentum of AI
adoption. Companies deploying AI at scale across their organization are
emerging as clear leaders, uncovering new efficiencies and separating
themselves from the competition. By providing a structured approach to
technology spending and value creation, TBM has become the essential mechanism
for companies transforming AI from an experimental technology to a core driver
of business innovation and performance.
##
ABOUT THE AUTHOR
Larry Blasko is Apptio’s President, Operations, and is responsible for driving revenue generation, channel strategy, and sales excellence for the company while overseeing Customer Success and Marketing. Larry joined Apptio in 2009 as vice president of sales before becoming Chief Revenue Officer. He played an instrumental role in scaling the organization and bringing in a broad set of customers across the Global 10,000.
Larry brings more than 20 years of experience building and leading high-performance sales teams in the enterprise software industry. Prior to joining Apptio, he was a vice president of sales for HP Software (via the Opsware acquisition). There, he led teams that delivered hundreds of millions in annual revenues. As SVP of Sales at Opsware, Larry’s customer acquisition and leadership success played a key role in the company’s $1.6 billion acquisition. Larry also spent more than six years in various sales leadership roles at Veritas Software, contributing to their rapid ascent and eventual acquisition by Symantec. Larry was a commissioned officer in the United States Army and holds an MBA from The George Washington University in Washington, DC.