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Software Engineering für betriebliche Informationssysteme (sebis) Fakultät für InformatikTechnische Universität München

wwwmatthes.in.tum.de

How to identify removal candidates in a large application portfolio?Sebis Workshop, 23.09.2016Pouya Aleatrati Khosroshahi, Technische Universität München

© sebis20160923 Aleatrati Khosroshahi - Application Portfolio Managment 1

Agenda

1. Initial situation: 5.000 applications in the portfolio Page 04

2. Motivation and conducted activities Page 06

3. Current activities: capability-based complexity management Page 10


BMW GroupOverview legal entities & plants


BMW Group is represented in…

...over 140 countries…

…with 30 plants and…

…over 40 dealer and

sale branches.

SpartanburgX3, X4, X5, X6

ManausBMW Motorcycles

Hams Hall EnginesOxford MINISwindonComponentsGoodwood Rolls-Royce

Steyr EnginesGraz MINI Countryman, MINI Paceman

Kaliningrad

Kairo

Rosslyn3 Series

Chennai

Shenyang- Tiexi X1, 3 Series, 3 Series Long

ZINORO- Dadong 5 Series Long,

EnginesKulim

Rayong

Jakarta

Production locations

Moses Lake Components

Assembly plantsJoint-venture companies Contract production Munich

3 Series, 4 Series M4, Engines

BerlinBMW Motorcycles, Maxi-scooter, Components

Dingolfing3 Series, 4 Series, 5 Series, 6 Series, 7 Series, M5, Components

EisenachComponents

LandshutComponents

Leipzig1 Series, 2 Ser,ies X1, BMW i3, i8

Regensburg1 Series, 2 Series, 3 Series, 4 Series, M3, M4 Convertible, Z4

WackersdorfComponents

Araquari1 Series, 3 Series, X1, X3, MINI Countryman (gradually from 2014)

Born

San Louis PotosíProduction launch in 2019

BMW GroupWide range of products and services


Upcoming trends in the automotive industry (autonomous driving, digitalization, etc.) demands for highly agile and cost-efficient IT.

… and be aware of upcoming market

trends.

… produce a range of mobility

products&services…

…multiple business units,

cooperation's,…

… legal entities & plants around the

globe,…

Production locationsAssembly plantsJoint-venture companies

Contract production

+

BMW Group IT11 main departments to manage the BMW Group EA with over 5.000 applications


BRM

Design

Build

Govern Governance

Infrastructure & technology management

Application management

DigitalServicesIdea Enabling Order Deliver Financial

Services

Local solutions

Local solutions

Americas APAC EMEA

Operate

The complexity of the current application portfolio leads to decreased agility and enhanced efforts in the maintenance and operation due to inefficiencies.

Initial situationHypothesis: Not sufficiently evaluated “root causes” lead to undesirable effects


Long-term goal Master and control the

complexity of BMW AP.

Concrete problem fields lead to undesired phenomenon in the daily business and ask for solution-oriented actions.

Ability of the organization to implement upcoming business requirements in budget, time and efficiently.

Applications cause monetary expenses with respect to various activities in order to guarantee a continuous business support

Poor IT Agility

Challenges to fulfill projects in budget and time

Application operations,

maintenance, project business

• Identify EAM-Hotspots

• Derive concrete measures in the EA

• Define space for innovative solutions

Avoidable IT costs

What is application portfolio complexity? how to control?Research already identified and evaluated this phenomenon in the past


Conceptual Model by Mocker 2

Entropy measure to calculate heterogeneity of

technical componentsBy Schuetz et al.3

Related work (in a nutshell) shows a very fragmented picture on this phenomenonHow many different concepts do we have?

Variation

What are differences between individuals?

Variety

How are individuals distributed?

Balance

To which degree do our concepts differ?

Disparity

Diversity charact. by Schneider 1

Related work on complexity management in EA analyzed this phenomenon from different views and serves as a starting point to identify root causes and respective

actions in practice1Schneider: Decision Support for Application Landscape Diversity Management, Dissertation, Technische Universität München, 2015.2 Mocker: Mocker, Martin. "What is complex about 273 applications? Untangling application architecture complexity in a case of European investment banking." System Sciences, 2009. HICSS'09. 42nd Hawaii International Conference on. IEEE, 2009.3 Schuetz et al.: Schuetz, Alexander; Widjaja, Thomas; and Kaiser, Jasmin, "Complexity In Enterprise Architectures - Conceptualization And Introduction Of A Measure From A System Theoretic Perspective" (2013). ECIS 2013 Completed Research. Paper 202.

Past initiativesQuantitative and qualitative activities helps to understand AP complexity in detail


1. Quantitative analysis of an large application portfolio40 correlations between application characteristics and

effects for approx. 3.500 applications

Number of interfaces

Number of supported bus. proc

Age

Number of users

...

Application characteristics

Incidents

Operation costs

Effects

Contribution?

Related Work (interfaces as cost driver) could be confirmed, others (Age) notResults could serve for further refinement of SLAs and the definition of DevOps

Good results in order to discover technical complexity drivers, but missing hint of what to do now.

2. Expert interviews Application know the challenges and root causes off applications.

Technical infrastructure

Interfaces Softwarequality

Releasemanageme

nt

Problem / Incident / Change

management

Sourcing capability

Derive concrete measures

Expert interviews discover concrete issues in the application owner, but lack of a “big picture” understanding

Application portfolio complexity – a highly fragmented definitionRoot causes, appearance, consequences


Root causes ConsequencesAppearance

Com

pone

nt re

late

d

Not used Code

Degree of Customization

Age of Code

Poor code quality Performance issues Canceled jobs

Efforts for IS

Manualworkarounds/

reworks

Technical not suited interfaces

Error-proned data

Maintenance costs

Operations costs

Land

scap

e re

late

d

Cos

tsAg

ility

Amount of IS

Amount of Interfaces

Chain reaction for changes

Delay in projects Further resourcesUnnecessary transitive interfaces

Missing transparency Functional overlapsMissing Knowhow

Process/Application mapping arbitrarily

Unwanted dependencies

Business Silos

Functional redundancies

Growing EA

Missing harmonization

Strategy, EAM & PPM not interlocked

Lacking influence on project portfolio

Complex integrations

Current initiativesDefinition of several working packages in order to identify removal candidates


Establishment of a comprehensive transformation program

Evaluation of used technologies

Analysis of documented Master solutions

Increase data quality of EA repository

Capability-based APM

Define governance principles for removal candidates

Quick Win: Analyze small applications

Current initiativesCapability-based complexity management


A business capability map illustrates a sorted and complete picture of the defined business capabilities.

Further elements (applications, strategy statements, etc.) can be allocated to one or more business capabilities and visualizations /color coding helps to illustrate the status of the business capability for concrete topic in order to support strategy decision makings, such as:

- Strategy investments

- Architectural health

- EA target development

…

Customs & Taxes Capability „Customs & Taxes“ is needed to support tax computation.

Risk Management We have to provide defined risk management KPIs and clearly defined responsibilities

…

Vehicle Sales

Common Customer Oriented Services

Capability 1 … Financial Services

Retail Finance

Banking

Business Mobility ServicesCommercial Finance

ACC

ESS

CO

RE

Aftersales

Service & RepairsProduct Quality & Warranty Mgmt

…

Insurance (Non-Vehicle)

Vehicle Distribution

Retail Development

Sales Parts Lifecycle Mgmt

Operat. CRM & Sales Funnel MgmtMarketing Communication

Sales Planning

Used Vehicle Mgmt & Remarketing

Pipeline Management

Sales Offer & Contract Management

Teleservices & Information Logistics

…

……

Sub-Capability 2Sub-Capability 2

……

……

Capability 2

Sub-Capability 1

Sub-Capability 3Sub-Capability 2

AccountingSub-Capability 2

Sub-Capability 4IT planning

Sub-Capability 5

Sub-Capability 7

Sub-Capability 3

Sub-Capability 6

Capability

Sub-Capability 1

…Sub-Capability 2

…

… ……

Customer Services

Mobility Services

Reselling ServicesServices with Added Value

Car Enabling Services

…

…

…

B2B Channel Employee Channel Vehicle Channel………

Information Management & Analytics

Vehicle & Component Dev. Analyses

…

…

Enabling Analyses

Financial Services SupportSales Parts Logistics

Production & Physical Logistics A.

Product Quality Management Analyses

Sales & Marketing Analyses

Connected Drive & Mobility Serv. A.

Financial Services Analyses

IT4IT Analyses

VisualizationGood architectural health

Medium architectural health

Poor architectural health

Idea: Define complexity dimensions of AP and measure and illustrate their current status by using the business capability map.

Advantage: Aggregated view on AP-HotSpots.

Current initiativesExcurse: Business capabilities @BMW Group IT


Forget the “HOW!” Look at the What!

Think of business capability as separate „company“, fully responsible for delivering an agreed set on non-redundant business functions & -services incl. all necessary resources (people, assets, budget etc.), dependent from the other capabilities only by agreed service interfaces

Current initiativesBusiness capability map of BMW Group (Extract, Feb. 2016)


Group Services

Production

Vehicle Sales


ProductClient

Vehicle & Component Dev. Parts Logistics & QMT

Information Technology

IT Delivery

IT Operations

Financial Services

Human Resource MgmtHR Core Services

Talent Management

Finance & Controlling

Customer Data Mgmt

Sales Structure

Employee Oriented Services

Retail Finance

Banking

Business Mobility Services

Commercial Finance

ACC

ESS

CO

RE

RES

OU

RC

ESU

PPO

RT

SupplierSupplier MgmtVehicle Portfolio Mgmt

AftersalesService & Repairs

Product Quality & Warranty Mgmt

General Services

Real Estate & Facility Mgmt



Retail Development


Parts Mgmt (incl. Spare Parts)

Operat. CRM & Sales Funnel Mgmt

Marketing Communication

Financial Product Portfolio Mgmt

Sales Planning


Pipeline Management


Vehicle Instance Mgmt


Production Control

Plant Maintenance

Production Quality

Material Req. Planning & Call-off

Logistics Inbound

Supply Chain Monitoring

Parts Quality Management

Logistics Outbound

Intra-plant Logistics

Capacity ManagementCapacity & Restrictions definition

Capacity Analysis & Balancing

Scenario-based Demand Calculation

Overall Vehicle Development

Requirements Eng. & Mgmt

Functional Design & Verification

Geometric Design

E/E Design

Product Data Mgmt (Automotive)

Product Quality Mgmt

Production Preparation

Comp. Planning & Ordering

Component Program Planning

Production Scheduling

Component Ordering

Communication

Collaboration

Legal Affairs

Car related & Mobility Prod.Portf. M.

Integrated Planning & ControlStrategic Management Compliance Management

Risk Management

Group Consolidation & Reporting

Accounting

Treasury

Customs & Taxes

Operational Controlling

Payment Processing

Corporate Security Mgmt

Customer Services

Mobility ServicesReselling Services

Services with Added Value


Purchasing

Container Management

Channel ServicesB2B Channel Employee Channel Vehicle ChannelDealer ChannelInteraction ChannelCustomer Online Channel

Information Management & AnalyticsVehicle & Component Dev. Analyses

Document Mgmt

Digital Asset Management

Enabling Analyses

Financial Services Support

IT Planning Level 0 Capability

Level 1 Capability

Legend

Driver Assist. Syst. Backend Services

Sales Parts Logistics






IT4IT Analyses

Current initiativesComplexity dimensions, data, target causalities


Analysisactivities

Dimensions tocontrol

Data from EAMrepositories

Incidents (Transitive) Interfaces Functionality

Number of IS in each capability Age of IS Blueprint Conformation

…

PlantsM

arkets

Agility

Customization

Costs …

Technologies

Verify

Evaluate

Are there functional

overlaps between the plants or

markets?

Are there specific technologies that lead

to high amount of incidents?

Does selected plants strongly use customized

applications?

How do we measure the dimensions,

based on the available data?

How do transitive interfaces affect

the agility of selected

capabilities?

Status of businesscapability

How to measure

and visualize?

…

Current initiativesTo Verify: Contribution of „Capability-spanning“ application to complexity of AP


Group Services

Production

Vehicle Sales


ProductClient

Vehicle & Component Dev. Parts Logistics & QMT

Information Technology

IT Delivery

IT Operations

Financial Services

Human Resource MgmtHR Core Services

Talent Management

Finance & Controlling

Customer Data Mgmt

Sales Structure

Employee Oriented Services

Retail Finance

Banking

Business Mobility Services

Commercial Finance

ACC

ESS

CO

RE

RES

OU

RC

ESU

PPO

RT

SupplierSupplier MgmtVehicle Portfolio Mgmt

AftersalesService & Repairs

Product Quality & Warranty Mgmt

General Services

Real Estate & Facility Mgmt



Retail Development


Parts Mgmt (incl. Spare Parts)

Operat. CRM & Sales Funnel Mgmt

Marketing Communication

Financial Product Portfolio Mgmt

Sales Planning


Pipeline Management


Vehicle Instance Mgmt


Production Control

Plant Maintenance

Production Quality

Material Req. Planning & Call-off

Logistics Inbound

Supply Chain Monitoring

Parts Quality Management

Logistics Outbound

Intra-plant Logistics

Capacity ManagementCapacity & Restrictions definition

Capacity Analysis & Balancing

Scenario-based Demand Calculation

Overall Vehicle Development

Requirements Eng. & Mgmt

Functional Design & Verification

Geometric Design

E/E Design

Product Data Mgmt (Automotive)

Product Quality Mgmt

Production Preparation

Comp. Planning & Ordering

Component Program Planning

Production Scheduling

Component Ordering

Communication

Collaboration

Legal Affairs

Car related & Mobility Prod.Portf. M.

Integrated Planning & ControlStrategic Management Compliance Management

Risk Management

Group Consolidation & Reporting

Accounting

Treasury

Customs & Taxes

Operational Controlling

Payment Processing

Corporate Security Mgmt

Customer Services

Mobility ServicesReselling Services

Services with Added Value


Purchasing

Container Management

Channel ServicesB2B Channel Employee Channel Vehicle ChannelDealer ChannelInteraction ChannelCustomer Online Channel

Information Management & AnalyticsVehicle & Component Dev. Analyses

Document Mgmt

Digital Asset Management

Enabling Analyses

Financial Services Support

IT Planning Level 0 Capability

Level 1 Capability

Legend

Driver Assist. Syst. Backend Services

Sales Parts Logistics






IT4IT Analyses

APP 2344

APP 4192

APP 0021

APP 2331

APP 2561APP 1231

Technische Universität MünchenDepartment of InformaticsChair of Software Engineering for Business Information Systems

Boltzmannstraße 385748 Garching bei München

Tel +49.151.Fax +49.89.289.17136

wwwmatthes.in.tum.de

Pouya Aleatrati KhosroshahiResearch associate

200 49 48 1

[email protected]

Thank you for your attention.


Initiative 1: quantitative analysis

Literature review and alignment with industry partner about scope of analysis

Outlier removal, logarithmic transformation (for normal distribution)

Scoping

Extract relevant data from data several data sources of the industry partner

Data collection

Data cleansing

Quantitative analysis, using pearson and spearman correlation coefficients

Data analysis

Interpret identified dependencies and answer RQ and hypotheses

Analyze Results

Deliverable: Application portfolio complexity driver

Deliverable: Relevant information for 3.609 applications

Deliverable: Research questions and hypothesis

Deliverable: Dataset for 3.656 applications

Deliverable: Dependencies between application characteristics

May 2015 June 2015 July 2015 August 2015 September 2015

. .. . . .. .. . . .. .

. .. . H1

_______________________________________________________________________________________________________________

H2_______________________________________________________________________________________________________________

H3_______________________________________________________________________________________________________________


Initiative 1: Results.


Interfaces Business processes

Business data Users

Mainframen = 277 Cost

β = .744***n = 186, p = .000

β = .396*n = 196, p = .041

β = .382n = 86, p = .166

β = 1.174***n = 272, p = .000

Incidentsβ = .465**n = 89, p = .002

β = .643***n = 87, p = .001

β = .637**n = 40, p = .008

β = -.049n = 112, p = .803

Database systemsn = 481 Cost

β = 1.013***n = 178, p = .000

β = .057n = 337, p = .763

β = .942**n = 73, p = .002

β = .630***n = 465, p = .000

Incidentsβ = .701**n = 64, p = .001

β = .685**n = 80, p = .007

β = .338n = 34, p = .164

β = .428n = 97, p = .066

Javan = 546 Cost

β = .688***n = 196, p = .000

β = .433*n = 371, p = .013

β = .420*n = 108, p = .021

β = .401***n = 526, p = .001

Incidentsβ = -.032n = 85, p = .859

β = .646**n = 113, p = .003

β = .267n = 40, p = .190

β = .106n = 144, p = .541

SAPn = 94 Cost

β = .298n = 60, p = .216

β = .482n = 60, p = .171

β = .386n = 31, p = .400

β = -.141n = 88, p = .621

Incidentsβ = .564*n = 30, p = .041

β = .233n = 29, p = .396

β = .461n = 13, p = .163

β = .006n = 38, p = .844

= Strong causality identified

In line with previous research

Maintenance of interfaces costs

a lot effort

SAP is “designed” for it

Models get more complex

(b. data)

User management etc.

Good results in order to discover technical complexity drivers, but missing hint of what to do now

Initiative 2: Expert interviews


Technical infrastructure

Interfaces Softwarequality

Releasemanagement

Problem / Incident / Change

management

Sourcing capability

• Amount of tickets?• Processing time

okay?• Dedicated pains?

• Repeating problems in the release management?

• Are you able to outsource the operation and maintenance of the application in a defined timeframe?

• What kind of challenges might hinder an outsourcing initiative?

• Type of programming language?

• Grade of customization?

• Does it make sense to initiative concrete activities?

• Type of interfaces?• Root cause for

problems?

• Which technologies are used?• Problematic maintenance?• Conformity to blueprint?

Derive concrete measures

Hypothesis: Application and maintenance owners of applications know the challenges and root causes off applications.

Initiative 2: Expert interviews


Rapid landscape assessment- Gather information based on defined

scope- Prepare and conduct interviews

Deep Dive assessment- Identify actions for deep dive

candidates with BV /WV- Derive actions

Report & communicate- Propose Measures- Define and visualize reports- Inform relevant stakeholder

Rep. 2(Costs

Rep. 1(Appl. Data) CMDB

Deep Dive candidates

Actions and findsings

Sources

DQ lacks

Operations Maintenance

IT-priorization

IT-riskmanagement ...

Departments

Report (ToDos)

Assessment of 1.000 applications to derive concrete measures in the EA and identify complexity patterns.

Business Criticality

Business Value

Maturity Fuctional Quality

Sustainability Tech. Complexity

Tech. QualityMaintainability

Nature of business capabilities @ BMW Group


Evaluation Criterion Value

Innovation level 2-low

Competitor differentiation 5-very high

Agility 4-high

CoR

Goal

StrategyStatement

Strategic business parameters

Offering

UCP

PlatformJava

ICM

PlatformSAP ERP

New App System?

Platform ?

Strategic Input

Business Capabilities

Logical Components

Application Systems & Platforms

Strategic Alignment

Implementation

Trac

eabi

lity

- Reference Structure for Target EA & Services

- Managing complexity by business componentization

- Clear responsibilities, business process & -area spanning

- Avoidance of redundancies

- Steered process/Application System mapping

- Scope for procurement negotiations

- Functional placement- On- or off-premise - ASP or public cloud- Standard Commodity

or Standard Best-of-breed or Individual

Vendor & Technology neutral

Design

Arch. Reqmt.

Price finding service

Incentive & Commission

Mgmt

Accounting

Vehicle Inventory Mgmt

Vehicle Invoicing

Business harmonization potentialsFunctional

strategies

EA-R

ules

& b

est p

ract

ices

for g

ood

Ente

rpris

e Ar

chite

ctur

e

Business Capability Map = EA Target Picture for Application

Landscape based on Architecture Paradigm of a

“Service Oriented Enterprise” (SOE)

Mission (together with ITSM): Shift BMW Group from a silos to a services mindset and reduce complexity in all IT processes, organization & technology; reduce time to business and implement a new IT Operation Model.

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