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How to Derive Sourcing Strategies
   in Application Management

   1. Xing Event Application Management
   Wien, 31. Mai 2011


   Christian Kaupa
   Leiter Application Management CEE
   Siemens IT Solutions and Services
Page 1           Christian Kaupa       © Siemens IT Solutions and Services 2010. All Rights Reserved.
Sourcing im Application Management hat
   viele gute Gründe


                Reduce cost                                                  Improve agility
                Reduce spend on non-core activities;        Adopt applications and services that
                contain costs and re-focus on core             can flexibly respond to business
                business                                                                change

   Increase quality                                                           Maximize Transparancy
   Achieve high quality service delivery                                    Gain transparency and flexibility of
   through standardized processes and                                     costs through customer-tailored price
   accreditation                                                                                        models


   Deliver globally                                                                    Simplify business
   Deliver services wherever you                                        Improve business performance through
   operate around the world; leverage                                     application and process consolidation
   economies of scale                                                                        and harmonization

                Guarantee compliance                                Leverage innovation
                Ensure 24x7 information security and                 Use technology innovation to
                compliance with regulatory                        increase business performance
                frameworks                                         and add value to the enterprise




Page 2                        Christian Kaupa          © Siemens IT Solutions and Services 2011. All Rights Reserved.
Der Schnitt zwischen Make or Buy muss
   kundenindividuell gezogen werden




   Horizontal cut:
   1     Full Outsourcing (service mgmt by Provider)




                                                                                                                            Customer
                                                                               Service
   2     Managed Outsourcing (demand mgmt by cust.)                          Governance
   5     Staff Augmentation (Provider as body leaser)
                                                                             Service
   Vertical cut:
                                                                      Management                 Demand
   3     Selective Outtasking                                                                   Management
         z. B. commodity services




                                                                                                                            Provider
                                                        Application   User    Probl. Incident   En-      Projects
   3rd dimension:                                         Basis       Help    Mgmt. Mgmt.       hance-
                                                        Support       Desk                      ments
   4     Adaptation of vertical cut to
         multiple applications / systems          Provider            Service Delivery
                                                                 Provider  Provider Provider                 Provider




Page 3                       Christian Kaupa                          © Siemens IT Solutions and Services 2011. All Rights Reserved.
Value Comparison Assessment als Methode zur
   Ableitung der Sourcing Strategie im AMS


                     1. Review Business Objectives                      2. Understand VCA Objectives
                                                                           Determine areas needing
                                                                           improvement
                                                                           Establish IT value targets



                                                                                               3. Assess Current
                                                                                                  Environment
                                               6. Report Results                                  Collect current
                                                  VCA Assessment                                  support cost
                                                  Summary                                         Evaluate current
   5. Develop Roadmap                                                                             support model
                                                  Executive
      High level like-for-like solution
                                                  Presentation
      SLA modeling
      Cost reduction
      Integrate IT Business Value objectives                         4. Identify Potential Opportunities
                                                                        Increase IT value alignment
                                                                        Cost reduction
                                                                        Efficiency & productivity gains



Page 4                      Christian Kaupa                    © Siemens IT Solutions and Services 2011. All Rights Reserved.
Beispiele für Analysen der Applikationslandschaft


                         High
                                                                                                                  Application Outsourcing Assessment
                                                                                                      High
                                                             B                                                                                     G
                        Business Impact



                                                                                                                      B
                                                                        D                                                                                                  Most
                                                 A
                                                                                G                                                                                          promising




                                                                                                    Interaction
                                                                                                     End User
                                                                                                                                   A                                       application

                                                                            E
                                                                                                                          Tier 1
                                                                                                                     F                                 D
                                                                        C           F
                           Low
                                                                                                                               E
                                                                                                                      C
                                              Design       Build    Maintain        Modify             Low
                                                       Software Lifecycle                                         Commodity            Important              Critical
                                                                                                                     Application Criticality to Business




                                                                                                           3.5
                                                                                                                                                           Size
                                                                                                              3
         Requirements




                                                                                                                                                           Technology
                                                                                                           2.5                                             Stability
                                                                                                                                                           Volatility
             Skill




                                                                                                              2
                                                                                                                                                           Retirement
                                                                                                           1.5
                                          A          B      C       D           E       F    G                                                             Business Knowledge
                                          Biz Mgr                           Architect                         1                                            Complexity
                                          Proj. Mgr                         ABAP Programmer                0.5                                             Development Phase
                                          Client Svr. Programmer            SAP Business Analyst                                                           Service Level
                                          App Support                                                         0


                                                                                                                         Landscape Readiness Check




Page 5                                                             Christian Kaupa                 © Siemens IT Solutions and Services 2011. All Rights Reserved.
Das Value Comparison Assessment erfolgt in
   vier straffen Phasen
   Introduction           Challenges    VCA Overview         Proposed Approach


                                                            Elapsed Time


               0.5 week                       1-2 weeks                    1-2 Weeks                        0.5 week



                                                 Data
               Startup                                                         Analysis                        Results
                                               Gathering

                                         Project Management, Reporting and Control

         Introduction                  Project initiation             Data collection               Findings presentation
                                                                                                    and discussion
         Engagement overview           Process training               Data analysis
                                                                                                    Identification of next
         Customer situation            Stakeholder interviews         Comparison
                                                                                                    steps
         discussion                                                   benchmark calculation
                                       Data gathering
                                                                                                    Project closure
         Scoping and timescale                                        Service roadmap
                                       Data validation
         scheduling                                                   customization
         Approval to proceed                                          Report preparation

                                                                                                                             Quality Gate




Page 6                             Christian Kaupa                            © Siemens IT Solutions and Services 2011. All Rights Reserved.
Bei weiteren Fragen kontaktieren Sie bitte…



         Christian Kaupa
         Head of Application Management CEE

         Siemens IT Solutions and Services
         SIS GO GAA CEE
         Mobile:   +43 (664) 80117-29410
         E-Mail:   christian.kaupa@siemens.com




Page 7                  Christian Kaupa          © Siemens IT Solutions and Services 2011. All Rights Reserved.

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XING-Event Wien "How to derive Sourcing Strategies"

  • 1. How to Derive Sourcing Strategies in Application Management 1. Xing Event Application Management Wien, 31. Mai 2011 Christian Kaupa Leiter Application Management CEE Siemens IT Solutions and Services Page 1 Christian Kaupa © Siemens IT Solutions and Services 2010. All Rights Reserved.
  • 2. Sourcing im Application Management hat viele gute Gründe Reduce cost Improve agility Reduce spend on non-core activities; Adopt applications and services that contain costs and re-focus on core can flexibly respond to business business change Increase quality Maximize Transparancy Achieve high quality service delivery Gain transparency and flexibility of through standardized processes and costs through customer-tailored price accreditation models Deliver globally Simplify business Deliver services wherever you Improve business performance through operate around the world; leverage application and process consolidation economies of scale and harmonization Guarantee compliance Leverage innovation Ensure 24x7 information security and Use technology innovation to compliance with regulatory increase business performance frameworks and add value to the enterprise Page 2 Christian Kaupa © Siemens IT Solutions and Services 2011. All Rights Reserved.
  • 3. Der Schnitt zwischen Make or Buy muss kundenindividuell gezogen werden Horizontal cut: 1 Full Outsourcing (service mgmt by Provider) Customer Service 2 Managed Outsourcing (demand mgmt by cust.) Governance 5 Staff Augmentation (Provider as body leaser) Service Vertical cut: Management Demand 3 Selective Outtasking Management z. B. commodity services Provider Application User Probl. Incident En- Projects 3rd dimension: Basis Help Mgmt. Mgmt. hance- Support Desk ments 4 Adaptation of vertical cut to multiple applications / systems Provider Service Delivery Provider Provider Provider Provider Page 3 Christian Kaupa © Siemens IT Solutions and Services 2011. All Rights Reserved.
  • 4. Value Comparison Assessment als Methode zur Ableitung der Sourcing Strategie im AMS 1. Review Business Objectives 2. Understand VCA Objectives Determine areas needing improvement Establish IT value targets 3. Assess Current Environment 6. Report Results Collect current VCA Assessment support cost Summary Evaluate current 5. Develop Roadmap support model Executive High level like-for-like solution Presentation SLA modeling Cost reduction Integrate IT Business Value objectives 4. Identify Potential Opportunities Increase IT value alignment Cost reduction Efficiency & productivity gains Page 4 Christian Kaupa © Siemens IT Solutions and Services 2011. All Rights Reserved.
  • 5. Beispiele für Analysen der Applikationslandschaft High Application Outsourcing Assessment High B G Business Impact B D Most A G promising Interaction End User A application E Tier 1 F D C F Low E C Design Build Maintain Modify Low Software Lifecycle Commodity Important Critical Application Criticality to Business 3.5 Size 3 Requirements Technology 2.5 Stability Volatility Skill 2 Retirement 1.5 A B C D E F G Business Knowledge Biz Mgr Architect 1 Complexity Proj. Mgr ABAP Programmer 0.5 Development Phase Client Svr. Programmer SAP Business Analyst Service Level App Support 0 Landscape Readiness Check Page 5 Christian Kaupa © Siemens IT Solutions and Services 2011. All Rights Reserved.
  • 6. Das Value Comparison Assessment erfolgt in vier straffen Phasen Introduction Challenges VCA Overview Proposed Approach Elapsed Time 0.5 week 1-2 weeks 1-2 Weeks 0.5 week Data Startup Analysis Results Gathering Project Management, Reporting and Control Introduction Project initiation Data collection Findings presentation and discussion Engagement overview Process training Data analysis Identification of next Customer situation Stakeholder interviews Comparison steps discussion benchmark calculation Data gathering Project closure Scoping and timescale Service roadmap Data validation scheduling customization Approval to proceed Report preparation Quality Gate Page 6 Christian Kaupa © Siemens IT Solutions and Services 2011. All Rights Reserved.
  • 7. Bei weiteren Fragen kontaktieren Sie bitte… Christian Kaupa Head of Application Management CEE Siemens IT Solutions and Services SIS GO GAA CEE Mobile: +43 (664) 80117-29410 E-Mail: christian.kaupa@siemens.com Page 7 Christian Kaupa © Siemens IT Solutions and Services 2011. All Rights Reserved.