The TBM Council defines TBM as “a strategic discipline for managing the value of technology across the enterprise.” It gives technology and finance leaders one structured model for connecting what technology costs to what the business gets for it.
The taxonomy is the part most teams work in every day. Costs flow through four layers, from the ledger to the people who consume the result.
At the sourcetbmcouncil.org: What is TBM, and The TBM Framework.
Raw financial categories mapped from the general ledger: labor, hardware, software, facilities, external services.
Logical groupings of what technology produces: compute, storage, network and end user.
The applications and services the business uses. The layer that answers what it costs to run this system.
The units, products and teams that consume the solutions. The layer that makes showback and chargeback possible.
Most TBM programs reach cost pools and towers, and stop. 83% have cost pools and 78% have towers, but only 55% reach solutions and 53% reach consumers. Those last two layers are where chargeback and total cost of ownership live, and practices that reach them are two to three times more likely to see significant business impact. That’s why they are the ones worth automating.
Source: TBM Council, 2025 State of TBM.
MagicOrange is a Committee member of the TBM Council, and actively works closely in the TBM working groups, including presenting at regional and global summits.
MagicOrange is also proud to have customers that have been nominated and won TBM Awards.
| TBM element | Where it runs |
|---|---|
| The taxonomy, all four layers | IT Financial Management. The full chain from cost pools through towers and solutions to business functions, automated, with the last two layers delivered as outputs rather than projects. |
| Beyond IT | Enterprise Allocation Modeling. Using the same engine that runs your TBM model, open to any cost you need to allocate. Use it for HR, finance and other shared services, for customer or product profitability, or for transfer pricing, on the TBM taxonomy or on a structure of your own. |
| Transparency and insights | Analytics, included with every capability: embedded Power BI over the model, with drill-down to the record underneath. MagicOrange also produces a single holistic view from the start of the value chain all the way to the last stage. This is famously known as the “All-Back.” |
| Alignment | The Bill of IT in IT Financial Management. Showback while the baseline builds, chargeback once it is agreed, posted to the general ledger. |
| Strategy | Run, Grow and Transform classification in IT Financial Management, planned in Budgeting and Forecasting. |
| Optimization | FinOps for cloud, and application and vendor views in IT Financial Management. |
| Labor | Resource Planning. Approved hours land in the staffing cost pool, so the largest line in the model is captured rather than assumed. |
| TBM for AI | AI Economics. GPU, model and agent cost land in the same towers as everything else. |
The TBM Council’s benchmarking programs are the Council’s own. MagicOrange normalizes the model so your numbers can be compared on the same taxonomy. The flexibility in MagicOrange allows for benchmarks against Gartner data, and it is building its own peer dataset.
The discipline for consumption spend, which MagicOrange runs on the same model.
The billing data underneath the cloud towers.
Our framework, which runs the same chain across all seven spend categories.
