Technology Portfolio Management (TPM) Best Practices

Overview

Different Technologies Inventory types carry different financial profiles, and the financial data worth capturing for each category reflects those differences. A SaaS platform record should capture subscription cost, seat count, and utilization rate data that a hardware record does not need. A hardware record should capture acquisition cost, depreciation schedule, and warranty cost data that a SaaS record does not need. A cloud service record should capture consumption-based cost data with tag attribution that neither hardware nor traditional software records require. Defining the financial data standards per inventory type ensures that financial governance is calibrated to the actual financial profile of each technology category.

Best Practice

Define per-inventory-type financial data standards that specify the financial attributes required for each Technologies Inventory type, organized into a minimum viable financial data set and a comprehensive financial data set. For the Software Technologies Inventory, the minimum viable financial data should include: the license or subscription cost on an annual basis; the license model type (perpetual, subscription, SaaS, usage-based); the renewal date; and the named commercial owner responsible for the vendor relationship. The comprehensive financial data should add: the fully loaded operational cost including infrastructure and personnel; the integration cost; the training and skills development cost; and a technology debt quantification where applicable. For the Hardware Technologies Inventory, the minimum viable financial data should include: the acquisition cost or current lease cost; the depreciation schedule and current book value; and the warranty cost. The comprehensive financial data should add: the operational cost including power and cooling; the maintenance and repair cost; and the estimated ITAD cost at retirement. For the Cloud and Infrastructure Services Inventory, the minimum viable financial data should include: the current monthly cost; the billing model (consumption, reserved, committed); and the cost attribution tags connecting the service to the applications and business capabilities it supports. The comprehensive financial data should add: the three-month and twelve-month cost trend; the cost optimization opportunities identified through FinOps analysis; and the exit cost estimate.

Benefit(s)

Per-inventory-type financial data standards ensure that financial governance is both comprehensive enough to support the decisions it needs to inform and focused enough to be maintainable without consuming governance capacity disproportionate to the financial materiality of each technology category. Technologies with the highest financial materiality receive the most comprehensive financial governance. Technologies with limited financial complexity receive governance calibrated to their actual financial profile. And the per-inventory-type standards make financial data comparable within each category while acknowledging that comparison across categories requires adjusting for the different financial profiles each represents.