competence in it management · • it management competence – it benchmarking – it cost-cutting...

© Copyright LEXTA GmbH 2009

This document is for authorised staff only. Distribution, citation, or copying – whether in extracts or all parts – is not allowed without written affirmation of the LEXTA GmbH.The enclosed texts and graphics have been used as part of a presentation; they do not cover the event in the sense of a complete documentation.

Competence in IT Management

Company Profile

Berlin, March 2009

Company-Profile-Lexta.ppt

Exhibit 1Exhibit 1

• Overview LEXTA• IT Management Competence

– IT Benchmarking

– IT Cost-Cutting

– IT Sourcing

– IT Strategy

– IT Security

• Project References

AGENDACompany Profile


Exhibit 2Exhibit 2

€ IT Services

Facts and Figures Profile

OVERVIEW LEXTA CONSULTANTS GROUP

LEXTA is one of the leading consultancies focussed on the competitiveness of IT services

Source: LEXTA

• IT management consultancy with clear focus

• Medium-sized, entrepreneurial business culture

• “Rheingauer Kreis” – IT manager amongst themselves

• Award-winning Online Benchmarking Tool “Benchmarking@LEXTA“("Innovationspreis 2007 ITK" of the “initiative mittelstand”)

• Business with the most constructive corporate culture according to the Organizational Culture Inventory (OCI) study

• Partner of CIO and CFO

• Founded in 2003

• 30 consultants in Germany, Austria and Switzerland

• Combination of technical expertise in IT management and top management consulting background

• World-leading clients in industries, utilities, banking and telecommunications

• Up-to-date master data for IT Benchmarking from over 100 companies, i. e. more than 1.200 single contracts and approx. 8.500 prices/cost rates (status: 02/2009)


Exhibit 3

IT Benchmarking

IT Sourcing

IT Cost-Cutting

IT Strategy

Source: LEXTA

LIFE CYCLE IT MANAGEMENT

LEXTA covers the whole IT management life cycle from Benchmarking, Cost-Cutting, Sourcing and Strategy to Security

IT Security


Exhibit 4Exhibit 4

• Overview LEXTA

• IT Management Competence– IT Benchmarking– IT Cost-Cutting

– IT Sourcing

– IT Strategy

– IT Security




Exhibit 5

Standard applications

(e.g. SAP ERP)

Data processing centre facilities (building, conditioning etc.)

Hardware (processors, storage, network)

Operating systems (e. g. UNIX, Windows)

Databases(e. g. Oracle)

= Standard IT Benchmarking = LEXTA specific cost estimate (ProBIT) = LEXTA specific application benchmark

Plan Build SupportOperate

Individual applications

LAYERS OF CREATION OF ADDED VALUE IN IT

Standardisation is the key in IT management — and LEXTA provides benchmarks for all standard IT services

Source: LEXTA


Exhibit 6

IT benchmarks typically use clearly defined categories

TYPICAL BENCHMARKING CATEGORIES

Arc

hive

s, b

ack-

up a

nd re

stor

e

Offi

ce C

omm

unic

atio

n

Dat

abas

es

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s

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anag

emen

t

Serv

er

Serv

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Des

k

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age

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-bas

ed S

ervi

ces

App

licat

ion

Usa

ge

General Expenses

App

licat

ion

Dev

elop

men

t

Client-PC Desktop

Client-PC Laptop

PDAs

Standard Software

Printer

Communication

Basic Services

Software Distribution

File/Print Services

Other Peripherals

LAN

Data Center-LAN

WLAN

Network Services

Internet Access

VPN (RAS)

Telephony

WAN

Server

Virtual Servers

Mainframe

Stan

dard

App

licat

ions

Source: LEXTA


Exhibit 7Exhibit 7

IT cost Bench-marking

Technically oriented Benchmarking

Business-orientedBenchmarking

Benchmarking approach Procedure Results

• Analyse the whole IT service spectrum and identify standard services

• Calculate actual IT costs and project them onto all standard IT services

• Compare to recent data from about 100 benchmarking partners

• Data have been collected and verified by LEXTA Consultants

• Identify actual IT costs (cost type and cost unit)

• Establish "golf course" indicators like:

- IT costs related to turnover - IT costs per user/employee- IT costs per subscriber etc.- etc.

• Trend statement concerning IT costs, based on intra-industry comparison

• Indicator for adequacy of user require-ments

• Limited consideration of quality standards, functional complexity and company specific characteristics

• Positioning within a ranking• Transparent conclusion concerning

the backlog to IT service providers with excellent cost/service position (“lessons learned”)

• Reliable identification of levers for cost-cutting and the associated potential savings

For technically oriented IT Benchmarking LEXTA can resort to data from over 1,200 contracts with more than 8,500 prices and cost rates

IT BENCHMARKING APPROACH

Source: LEXTA

data of currently 100 benchmarking partners:12 to 18 months old


Exhibit 8

LEXTA has access to benchmarking data for Europe as well as for North America

COVERAGE OF COUNTRIES FOR IT BENCHMARKING

USA

CDN

UK

F

D

DK

P E

I

CH AU

N S

FIN

IRLNLB

H

CZSK

Source: LEXTA


Exhibit 9Exhibit 9

IT BENCHMARKING PROCEDURE

1. Preparation

Content:

Phases:

Results:

• Kick-off• Definition

of contact person

• Classification of service modules

• Time scheduling

• Project framework

• Report on status quo

• Report on improvement factors

• Selected peer group

• Benchmarking results

• Improvement potential

• Overview of levers

• Gather information on service portfolio, quantity structures, SLAs, contract as well as cost and pricing structure

• Analyseoverheads

• Find out specific regulations of company

• Define selection criteria for peer groups

• Select inner and outer peer groups as reference groups

• Create transparency towards comparability and restrictions

• Calculate costs per IT service

• Identify Ranking in comparison to competitors

• Show costs in comparison to peer groups

• Identify causes for differences to competitors

• Audit Overheads

• Define levers

• Assure comparability of IT services

• Consider SLA criteria

• Scale client data to parameters of comparable systems

2. Collection of initial data

6. Definition of levers

5. Execution of benchmarking

4. Selection of peer group

3. Generation ofcomparability

The IT Benchmarking is conducted in six phases

Source: LEXTA


Exhibit 10

Provision of a comprehensive and up-to-date database

• Coverage of all service constituents

• Coverage of service range and quality

• Up-to-date data (< 15 months)

• Database granularity with regard to service depth

• Own database

• First-hand data collection

• Data quality assurance

• Uniform and standardised services

• Frequent updates

• Geographical coverage

Exhibit 10

No total global coverage, but mainly OECD countries

CONFORMITY WITH BITKOM BENCHMARKING STANDARDS (1 OF 2)

BITKOM’s extensive benchmarking standards …

Experience

• Methodical competence in data collection, measurementand comparison

• Seniority, experience and temporal availability ofthe person responsible for benchmarking

• Substantial references from benchmarking projects

Methodical competence

• Standardised approach for data collection and analysis

• Identification and quantification of cost drivers

• Data and procedure verification to identify possibleinconsistencies and gaps

Principles and code of conduct

• Open and fair conduct

• Observation of legality and confidentiality in data handling

• Comprehensive and truthful data collection

• Conformity with schedules and milestones

• Continuity of project members

• Target-oriented preparation and execution of project meetings

Source: BITKOM


Exhibit 11Exhibit 11

CONFORMITY WITH BITKOM BENCHMARKING STANDARDS (2 OF 2)

Complete compilation of all price-influencing parameters

• Service specifications

• Quality

• Complexity

• Volumes/Amounts

• Contract duration

• Special arrangements

Project organisation

• Application of a three-layered organisational model (steering committee, project management and team)

• Organisation of data collection workshops and coachings

• Realistic project planning

Data collection and analysis

• Compilation of technical performance indicators

• Collection of service quality data, particularly with focus on cost drivers

• Recording of the individual company setting

• Recording of governance and business processes

• Creation of peer groups

• Development of categories based on the SLAs and/or services

• Assessment of special financial items (e. g. asset or human resource transfers, “cosmetic“ pricing adjustments, risk spreading)

• Data standardisation using price deductions and premiums

• Transparent standardisation

X

Presentation of results

• Display market conformity of the results

• Display of the best in class results

• Extensive presentation of the results

• Comparison within the same industry branch

• Comparison with other industries

• Peer group sample size (>= 6)

• Indicator analysis

• Derivation of levers

• Clear and tangible results

• Proof of experience through existing references

Source: BITKOM

… are almost perfectly covered by LEXTA


Exhibit 12

Hardware Provision

• Sourcing management• Financing• Capacity costs (calc. interest)• Capacity costs (amortisation)• Guarantee• Delivery and temporary storage• Transport to place of installation• Setup at the place of installation• Connection to infrastructure• First briefing• Test (POST)• Inventory

• Relocation: dismounting/installation• Relocation: transport (incl. package)

• Observation• Reporting• Preparation for exchange• Realisation of exchange• Maintenance

• Sundown• Dismounting• Storage• Transport• Disposal

• Sourcing management• Capacity costs (calc. interest)• Capacity costs (amortisation)• Guarantee• Licence management• Automatic installation• Manual installation• Basic configuration (standard)• Basic configuration (individual)• First briefing• Test

• Re-installation• Re-configuration• Monitoring• Inventory• Reporting• Update (patch)• Update (minor release change)• Update (major release change)

• Sundown• Deinstallation

• Supply: electricity• Supply: air condition• Supply: facility• Supply: physical securities• Supply: network infrastructure• Supply: rack

• Operating system service• Periphery service• Network service• Fax service• Printer service• File service• E-mail service• Internet service• RAS service• Backup service (if “stand alone benchmark")• Restore service (if “stand alone benchmark")• Recovery test (if “stand alone benchmark")• Application service• Firewall service• Security service

• Help desk

• Documentation operation manual• Documentation problem solution database

Software Provision Infrastructure Data Centre

Hardware Relocation

Hardware Maintenance

Hardware Decommissioning

Software Relocation

Software Decommissioning

Administration

User Help Desk

Documentation

A server benchmark consists of approximately 70 detailed checkpoints

OVERVIEW CHECKPOINTS FOR SERVER BENCHMARK

Source: LEXTA



Peer partner 1

Client company

Reference modelNormalisation

Normalisation Normalisation

Source: LEXTA

Normalisation

Peer partner 2

Peer partner n

With established comparability, all benchmarking participants’ information is normalised on one reference model

PHASE 3: APPROACH TO NORMALISATION

1. Normalisation of the benchmarking target on the reference model

3. Reverse calculation of the percentage pricing and cost differences to the peer partners

2. Pricing and cost comparison of the benchmarked company with selected, normalised peer partners

Non-normalised and normaliseddata of peer partners in the

benchmarking database



Criteria Service class Service level

Availability Very high 99,5 < x < 99,999 %

High 97,5 % < x < 99,5 %

Medium 95 % < x < 97,5 %

Low < 95,0 %

Reaction time

Not considered because usually not a cost driver

Maximum downtime

Very high 1 to 2 h

High 4h/case; 15 h p. a.

Medium 4 to 8 h; 24 h p. a.

Low 8 to 10 h; 48 h p. a.

Client LEXTA reference model

Criteria Service class

Service levelCore time Flexible time

Availability 1 99,5 %

2 97,5 %

3 95,0 %

4 95,0 %

Reaction time 1 15 min. 60 min.

2 15 min. 60 min.

3 15 min. 60 min.

4 60 min. 240 min.

Maximum downtime

1 2 h 2 h

2 4 h 5 h

3 4 h 5 h

4 8 h 10 h

The client's service levels are projected on to LEXTA’s reference classes "high", "medium" and "low"

PHASE 3: COMPARISON OF SERVICE CLASSES

Source: LEXTA



Inner Peer Group Outer Peer Group

• Comparison is restricted to companies with comparable general conditions of IT operations

– Same industry– Comparable relevant

volumes– Comparable complexity

of requirements – Comparable service

levels • Trend statement regarding

competitiveness of cost performance ratio under the given conditions

• Identification of the best in class

• Comparison is extended to companies with only limited comparability in the conditions of IT operations

– Same/comparable industry

– Comparable relevant volumes

– Complexity of require-ments is not considered

– Service levels are not considered

• Assessment whether requirements and service levels are typical for the industry

• Identification of the best in practice

Inner Outer

The benchmarking is conducted in comparison to an inner and an outer peer group

PHASE 4: BENCHMARKING PEER GROUPS (1 OF 2)

Source: LEXTA



No. Peer Group Company Turnover in millions of Euros

Number of employees

Number of workstations

Number of clients in millions

Client 611 1.019 1.187 0,7

1 Inner Company 1 2.229 3.200 4.073 1,2

2 Company 2 2.755 4.400 3.549 1,8

3 Company 3 1.034 2.100 2.317 1,25

4 Company 4 1.840 2.808 2.480 1,3

5 Company 5 1.939 5.753 4.496 0,4

6 Company 6 225 835 857 0,3

7 Company 7 180 396 451 0,2

8 Company 8 771 6.700 4.800 0,035

9 Company 9 494 660 622 0,3

10 Outer Company 10 4.100 9.000 10.027 26,3

11 Company 11 46.400 66.549 > 25.000 12,4

12 Company 12 613 2.341 k. A. Unknown

13 Company 13 104 281 400 0,1

14 Company 14 113 243 400 Unknown

15 Company 15 2.248 5.602 3.751 Unknown

16 Company 16 181 305 639 0,2

Other relevant criteria include: Structure of service portfolios, service level agreements,

availability, time to react, etc.

Inner and outer peer groups are selected on the basis of quantitative and qualitative criteria

PHASE 4: SELECTION OF PEER GROUP (2 OF 2)

Source: LEXTA

ILLUSTRATIVE



Prices Prices - peer group

Source: LEXTA

0,2323,10 23,33

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+ 19 %

31,10

24,0023,8623,4021,00

18,9018,2517,8616,0015,7815,70

14,0513,4911,25

1st quartile: 15,70

The prices per active port are about 19 percent above the market average and33 percent above the first quartile

PHASE 5: BENCHMARKING RESULTS - NETWORK INFRASTRUCTUREin EUR per port and month

ILLUSTRATIVE



• Complexity

• Effort

• Frequency

• Level of affectedness

• Relevant configuration items

• Typical distributional patterns

• Key figures

• Comparison of plausibility towards personnel expenses for ITIL® processes

3

Problem management

Applications management for non-standard applications

4

Configuration and release management

2

Change management

1

Incident management

Analysis of ticket data

LEXTA provides reliable key figures of service and support costs within ITIL®

processes

SELECTIVE BENCHMARKING OF ITIL® PROCESSES APPLICATIONS MANAGEMENT

Source: LEXTA



What is “Benchmarking@LEXTA”?• “Benchmarking@LEXTA” is an innovative, highly professional tool to analyse and benchmark all common IT-related areas of

large and medium-sized companies online.

• The software is built on the comprehensive expertise of the LEXTA CONSULTANTS GROUP in structuring and conducting benchmarks for leading companies of all industry sectors.

The Structure of “Benchmarking@LEXTA”• “Benchmarking@LEXTA” is very modular and highly structured

tool which is easily accessible and rather intuitive to use, which enables the client to independently benchmark his IT:

The Value of “Benchmarking@LEXTA”• The client is able to perform a large part of the benchmarking himself

• Significantly lower financial efforts and a considerably reducedamount of time necessary for follow-up benchmarks (max. 2 weeks)

Printing & enveloping

Personnel cost rates

Operation of data centre and platform

SAPoperations

Office communications

“Benchmarking@LEXTA” is an online tool to continuously track and benchmark operational IT costs

SHORT DESCRIPTION AND STRUCTURE

Source: LEXTA



Step by step the tool guides the user through data ascertainment• Collection of all needed data in nine steps

• All dimensions of a service are captured

• All prompted data can be edited or deleted anytime until the end of the process

Afterwards all data are quality assured by LEXTA experts in order

• To guarantee significant results

• To assure the comparability of data

All data will be treated strictly confidential by LEXTA and will be used completely anonymously for benchmarks

“Benchmarking@LEXTA” leads the user step by step through the process of data collection

STEPS OF “BENCHMARKING@LEXTA”

Source: LEXTA

Determine categories

Prompt service provider

Prompt key data

Define performance

Define servicelevel

Promptprices

Prompt company

data

Completebenchmark

Determinerange to be

benchmarked


Exhibit 21

Picture: Index page at first login

Source: LEXTA

After a successful login, users can work fully autonomously

Steps Available Steps

Progress Bar



• Economic efficiency: Control and transparency - from single services to process costs

• Determination of details in scope

• Definition of short, medium and long term goals

• “Benchmarking is not comparing apples and oranges”

OBJECTIVES, TOPICS AND GENERAL CONDITIONS OF THE “RHEINGAUER KREIS“

The “Rheingauer Kreis” provides a professional platform for IT managers to discuss current challenges of their IT environment across corporate frontiers

Source: LEXTA

IT Benchmarking and the opportunity for knowledge exchange between the members on current IT topics and challenges:

• The participants are collectively defined and proceed as closed circle

• The decision to the course of action is jointly taken and carried forward

• A mixture of workshops and informative meetings (topic dependent)

• Experience exchange during the evening and a workshop the following day

• Four meetings each year

• Costs: 4.200 EUR per year

General conditionsObjectives and topics


Exhibit 23

• Overview LEXTA

• IT Management Competence

– IT Benchmarking

– IT Cost-Cutting– IT Sourcing

– IT Strategy

– IT Security


Exhibit 23




Leverapplication

development

Leverstandard officecommunication

Leverapplication operations

Leverplatform

operations

IT Cost-Cutting

There are four influential dimensions of IT Cost-Cutting

OVERVIEW LEVERS

Source: LEXTA



No. Lever Relevant indicators

1 Use of multi project management • Alignment of project portfolio management with IT Strategy• Standardised tools for project management, controlling and reporting

2 Maturity level of the project organisation • Level within the Capability Maturity Model• Maturity level according to PMMM

3 Transparency concerning cost/value ratio in projects

• Share of projects that are over budget/overdue/not specification compliant • Transparency concerning operational costs induced by the projects• Ex-ante quantification of project benefits

4 Know-how transfer from development to operations

• Operations involved in project management• Defined interface between development and production monitoring • Feedback loop from operations to development• Job enrichment

There are levers for cost-cutting on the demand side as well as on the delivery side

EXAMPLES FOR LEVERS – APPLICATION DEVELOPMENT

Source: LEXTA




1 Demand based volumes for desktops and notebooks

• Reliable asset management for complete equipment• Billing of external service provider by "volume x price" • Competitive equipment• Use of desk sharing concepts

2 Demand based volumes for printers • Reliable asset management for complete equipment• Billing of external service provider by "volume x price"• Competitive equipment• Use of multi functional printers

3 Demand based service levels • Differentiated service levels• Gearing to industry typical benchmarks• Transparency concerning services for VIP users

4 Optimised expected lifecycle of end user devices

• Differentiated user classes• Possibility to extend expected useful life• Pools of terminal devices

5 LAN and general services (file, email, print server etc.)

• Consolidation of the general services• Industry typical service levels• Competitive service costs

6 Licence management • Defined license management process• Transparency concerning used licences


EXAMPLES FOR LEVERS – OFFICE COMMUNICATION

Source: LEXTA




1 Transparent pricing model of application specific services

• Billing by "volume x price" (unit pricing)• Gearing to benchmarks for standard applications• Incentive structures for optimal development

2 Incentive structures for production monitoring to optimise infrastructure efficiency

• Scorecards for target agreements• Business oriented pricing models with service providers

3 Securing of critical internal application know-how

• Transfer of know-how from application development to application support• Operations involved in project management

4 Optimised environment management • Efficiency of production, disaster recovery, testing and development environments

5 Optimised sourcing • Separate outsourcing of services with specific requirements

EXAMPLES FOR LEVERS – APPLICATION OPERATIONS


Source: LEXTA




1 Centralised server hosting • Degree of centralisation of server locations• Consolidation data centres

2 Competitive prices for server hosting • Check for competitiveness using benchmarks

3 Demand based service levels • Differentiation according to criticality• Gearing to industry typical benchmarks

4 Optimal hardware lifecycle • Optimisation relative to MTBF*, maintenance costs and price decline

5 Optimised capacity management for server systems

• Extension of server systems • Load of large server systems• Use of modern technology for capacity optimisation

6 Optimised storage operations • Utilisation of table space, file system and net storage volume• Adjustment of RAID levels according to requirements• Ratio of online to backup storage volume

7 Intelligent storage architecture • Degree of penetration by SAN or NAS• Potential for consolidation of DAS systems

EXAMPLES FOR LEVERS – PLATFORM OPERATIONS


Source: LEXTA* Mean Time Between Failures



Equivalent to approx. 24 %

67.0

12.3

12.0

10.4

10.1

8.2 3.4 2.7 2.0 1.7 1.4 1.4 0.9 0.3 0.2 0.1

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Reference example no. 1 is a technology group that saved approximately 67 million EUR p. a.

REALISED SAVINGS p. a.in million EUR p. a.

Source: LEXTA



Benchmarking TSI

Feasibility

High

Long term Mid term Short term

Medium

Low

Pote

ntia

l sav

ings

Communication cost transparency

(manual)

Reduction control reports

Optimising systems on application level

Optimisationstorage usage Archiving

unused data

Changes inpricing model

Sourcingstrategy

Removal of users

Price benchmarking IT providers

User/cost allocation

Reference example no. 2 shows the cost-optimisation levers for data centre services in a current project

MATRIX OF LEVERS

Source: LEXTA



• Overview LEXTA


– IT Benchmarking

– IT Cost-Cutting

– IT Sourcing– IT Strategy

– IT Security





Strategic examinationof IT expenditures

Analysis of categories

Decision on vertical integration

Regular operative control

Implementation

Request for proposal Negotiation andpricing model

IT SOURCING

1

2

3

45

6

7

LEXTA accompanies and supports the complete process of IT Sourcing

MODUS OPERANDI SOURCING

Source: LEXTA


Exhibit 33

Rou

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raft

Range of possible service bundles and sourcing scenarios

Det

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ddr

aft

Sele

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nM

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tion

„What areour skills andwhat do we want?“

„What is the marketable to deliver?“

„Who suits our requirements best?“

„How do we achieve ourgoals together?“

Types of project results

Tim

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Time frame for talks to partners, opportunity for

partners to presentown conceptions

Source: LEXTA

The „Sourcing Funnel“ allows a structured monitoring of the progress during the sourcing process“SOURCING-FUNNEL”

Long List

Partner fact sheet

Ideas, whishes, visions:Put in the market context

Short List

ContactAssessmentNegotiationSelection

Migration

• Current service landscape• Current cost structure• Rough market vision• Prioritised sourcing scenarios• Partner fact sheet• Partner process check-list• Fundamental decision

• Business case with targetperformance and cost structure

• Evaluated Long List• Request for information (rfi)• Request for proposal (rfp)• Assessed Short List• Provider presentation

• Letter of Intent (LOI)• Due Diligence• Business plan & performance

measurement indicators• Negotiations and contract

• Transition planning• Change of control• Readjustment of objectives• Partner controlling

Measuringpoint

Point ofno return

Go orno go?

Go orno go?



• Contract detailing

• Development of escalation concepts

• Conception and support of the transition

• Preparation of the internal organisational structures

• Development of “client competences”and sourcing management know-how

• Development of monitoring and control instruments for the governance

• Planning and advisory for the development of a professional service level management

• Definition of project scope and approach

• Evaluation of the service portfolio

– Prioritisation

– Life cycle

– Costs etc.

• Preparation of the rfp documents including

– Service descriptions

– Definition of service levels

– Pricing models

• Guidance during the request for proposal (rfp)

Reference example no. 3: This exemplary sourcing of systems was implemented over three phases and seven consecutive steps in only 18 monthsEXEMPLARY APPROACH TO IT-SOURCING

2. Offer development, assessment and negotiation process

3. Contract design andtransition guidance

1. Development of the request for proposal

1.2 Assessment of the current service provision

1.3 Development of the rfpdocuments

2.1 Offer and bidder assessment

3.1 Guidance during the transition

3.2 Implementation support

2.2 Negotiation

Duration: approx. 5 months approx. 4 months approx. 9 months

Phase:

Step:

Results:

Obtaining binding quotes from renown and established IT providers

Preparation and realisation of coordination meetings with the providers

Development of an evaluation and decision matrices

Definition of assessment criteria

Comparison of the provider quotes with each other and the current situation

General options assessment

Planning and visit of the development and operations centres of selected providers

Development of a business case

• Comprehensive inventory of currently used services

• Market-adjusted rfp documents

• Binding, assessed andnegotiated bids

• Make-or-buy decision

• Transition of the chosen services to an IT provider

• Development of “client competences”

Contents:

1.1Project structuring and planning

Source: LEXTA



IT potential savings

• 12 to 34 percent per client and • 10 to 29 percent per category are

possible (18 percent on average)

Unbiased ranking of suppliers

(qualitative/ quantitative)

Be preparedto abandon established solutions

(no “Last Call”policy)

Common ratio of savings/

consulting fees> 20 : 1

Always have an alternative

vendor

The "fat" is in the model

Top management

support is vital

At least three rounds of

negotiations

A Euro saved in IT is a Euro earned in business

LESSONS LEARNED PROJECT EXPERIENCE

Source: LEXTA



• Overview LEXTA


– IT Benchmarking

– IT Cost-Cutting

– IT Sourcing

– IT Strategy– IT Security





Manpo

wer

System

s

Clients

Input Results

Business strategy

Strategy subjects, influence factors and criteria

IT policy paper

Realisation

Activities

Govern

ance

Technology

trends

Changes

Regulatory

guidelines

IT Strategy

Effectiveness

Efficiency

IT Strategy is derived from the business strategy and provides structured statements about the prospective IT orientation

GENERIC IT STRATEGY PROCESS

Source: LEXTA



View: companiesView: regions

IT Manpower

IT Clients

IT Systems

View: product/branch

Is critical know-howhanded over? Comprehensive

resource planning/availability?Frictions caused by

cultural differences?

Appropriate allocation models?

Servicebased on

adequate contracts?

Guaranteed futurefor applications?

Covered professionalarchitecture

by user systems?

Suitable organisationalunit for customer and

service provider management?

Balance betweencentral and local IT?

Good balance make or buy?

Processes regulated where necessary?

Synergy potential through standardisation?

Utility of the IT is transparent?

Safety and qualityrequirements fulfilled?

Is the IT efficient?Effectiveness of the

IT managementorganisation?

IT Governance

• Organisation• Market rules• Processes• Governing

• Performance portfolio and performance quality

• Accounting for services• Client interfaces

• Projects• Architecture• Applications/data• Infrastructure

• Skills• Human resources

development• Culture

Topics Crucial questions

Effectiveness of thecost structure?

Appropriate processes tocustomers

and service providers?

Are prospective skill and capacity needs satisfied?

The IT Strategy answers the crucial questions which are essential for an effective and efficient IT from different angles

TOPICS, CRUCIAL QUESTIONS AND VIEWS

Source: LEXTA



• Determination of emphases for topics and views

• Project schedule• Basic structure IT

policy paper

• Interviews

• Annual reports• Organisation chart• Process documents

• Schedule, participants

• Communication concept

• Client (management/MD or CIO/IT director)

• Deduction of IT objectives out of the business strategy

• Adherence of relevant factors

• Investigation of frame-work for prospective IT orientation

• Structured interviews• Workshops

• Business strategy• Client documents• LEXTA research

• IT objectives, guidelines

• Mission statement• Framework• Influencing factors

• Responsible persons: IT, products, regions, companies

For determined and focused topics:

• Reconcilement of benchmark criteria

• Quick scan current situation

• Appraisal, analysis

• Structured interviews• Portfolio analyses• Analysis of correlation

• Result of the second step

• Progress report

• Equal to the previous steps

• Determination of strategy statement

• Outline and coordination of package of measures

• Utility benchmark and prioritisation of measures

• Implementation strategy for top measures

• Workshops• Coordination rounds

• Progress report

• IT policy paper• Roadmap with measures

• Client• Responsible persons for the

measures

1. Initialisation 2. Objectives and ideal

3. Investigation and analysis

4. Strategy concept

Content

Method

Input

Result

Detailed planning

Involved person

The LEXTA process model shows the way to an adequate IT Strategy relating to practice and situation

PROCESS MODEL IT STRATEGY

Source: LEXTA



IT Strategy

• Derived out of business strategy

• Verification of potential for optimisation

• Highlight options for action

Businessarchitecture

• Business and service functions

• Enterprise’s main tasks

• Business divisions

Applicationarchitecture

• Allocation of application systems to the main tasks

• Scale integration

• Percentage of individual solutions

Technical architecture• Platform concepts

• Operating systems, middleware, databases

• Hardware

Products and markets

Functions and cycles

Techniques

Business view IT view

Source: LEXTA

With the implementation of architecture principles the following objectives are primarily pursued:

• Improved support of business requirements

• Applications’ ability to integrate and communicate

• Development after uniform guidelines

• Similar appearance and process logic

• Less error rate, improved quality • Platform independence

Architecture objectives

IT architectures are incorporated into an IT Strategy and can be complexly described

TYPES OF ARCHITECTURES AND THEIR OBJECTIVES



IT Strategy HR Management

Program Management Finance

Relationship Management

Service Level Management

Incident Management

Build and Test

Design

Problem Management

Configuration Management

System Management

Release Management

Supplier Management

Change Management

Financial Management

Availability and Continuity Management

Capacity Management

Account Management

Development/Projects

Service Delivery

Service & Support

Use

rC

usto

mer

Man

ager

Supp

liers

and

Pro

vide

rs

Starting point for the development of the IT organisation could be the de facto standard ITIL®

IT CORE PROCESSES ACCORDING TO ITIL®

Source: glenfis, LEXTA

METHOD EXAMPLE



Stage Parameter value

• Ad hoc processes• Few project management processes are defined • Project success depends on individual circumstances

• Basic project management processes to control progress, costs and functio-nality are established

• Process discipline is existent

• Project management processes are documented, standardised and integral-ted into the organisation

• All current projects are applying consistent project management

• Regularly and detailed measuring of process progress and product quality• Quantitative project controlling is a matter of course

• Project management processes are continually improved• Pilot initiatives for new project management approaches

“Initial”

“Repeatable”

“Defined”

“Managed”

“Optimising”

1

2

3

4

5

On the way to a higher maturity in IT project management, LEXTA provides support in the core areas cost estimation and project controlling

PROJECT MANAGEMENT MATURITY: SEI CAPABILITY MATURITY MODEL ® METHOD EXAMPLE

Source: Software Engineering Institute (SEI) of the U.S. Department of Defense, LEXTA



Basic Expert team estimation

Intermediate Expert team estimation + Effort drivers

Advanced Expert team estimation + Effort drivers+ Analogies

development process**Software

• Reliable estimates• Transparent estimates• Pragmatic method

– Feasibility without own databases of completed projects

– quick implementation• Early applicability in the

project life cycle

1

2

3

Objectives Implementation in three steps

To ensure reliable project effort estimations, LEXTA has developed a method that combines best practices from the industry

PROJECT MANAGEMENT MATURITY: PROBIT* METHOD

Source: LEXTA

METHOD EXAMPLE

* ProBIT = Process oriented budgeting for IT projects** E. g. Rational Unified Process, V-model, simple waterfall model



1. Prepare project 2. Control project 3. Close project

• Identify budget, schedule and scope risks, as well as budget levers in the project contracts

• Anchor project controlling in the project organisation

• Define project controlling processes

– Timely reporting of project efforts

– Change request and supplement procedure

• Regularly compare actual and planned budget in milestone plans

• Support inspection of project re-sults at milestones

• Recognise budget and schedule overruns early

• Control change request and supplement procedure

• Ensure a clear-cut pro-ject close (end of invoi-cing for project)

• Define remaining tasks (responsible, budget, schedule)

• Support project docu-mentation and transition into current IT operations

Mile-stone 1

Mile-stone 2

Mile-stone n

...

Project controlling process

Project control-ling tasks

Kick-off

Project process

Go-live

Project controlling tasks can be grouped into three phases

PROJECT MANAGEMENT MATURITY: PROJECT CONTROLLING PROCESS

Source: LEXTA

METHOD EXAMPLE



• Overview LEXTA


– IT Benchmarking

– IT Cost-Cutting

– IT Sourcing

– IT Strategy

– IT Security• Project References



Exhibit 46

Dataintegrity

Availability

Documentation Processes

Confidentiality

KEY ISSUES OF IT SECURITY MANAGEMENT

IT risk management aims at appropriate security standards under consideration of the cost-benefit ratio

Source: LEXTA

Costs


Exhibit 47Pers

onne

l

System

s

Clients

Strategy topics and influence factors Implementation

IT securityorganisation/

IT securityconcept

Govern

ance

Technology

trends

Change

manag

emen

t

Regulatory

guidelines

IT-Security strategy

Efficiency targets

Source: LEXTA

STEPS OF LEXTA IT-SECURITY MODEL

The IT security strategy is derived from IT strategy and risk strategy and delivers structured statements for its implementation

Business strategy

IT strategy/riskmanagement

Input


Exhibit 48

An intra-industy benchmark of security standards can assess the adequacy of risk management

BENCHMARKING - SAFETY REQUIREMENTS

Source: LEXTA

8,1

7,1

6,2

7,7

7,8

8,0

8,1

Ø Other industries

Utility company 1

Utility company 2

Utility company 3

Utility company 4

Utility company 5

Example client

Procedure Example

• Structured LEXTA-recording sheet for most relevant security requirements

• Ca. 45 queries within categories

- IT security certification

- IT security services

- IT security operations

- IT access security

- IT security skills and organisation

• Identification point system (0,0 to 10,0 points)

• Identification of relative security requirements in comparison to other companies withcomparable size, industry and businessrequirements


Exhibit 49

The objective is not the creation of maximum security standards but an efficientimplementation of reasonable requirements

100%

Security and availability standards

Costs

Actual security

Recom-mendationLEXTA

∆ Costs for implementation of recommendation

ANALYSIS AND RECOMMENDED COURSE OF ACTION GENERIC

Source: LEXTA

Transparencyand managementcommittmenttowards residualrisks


Exhibit 50Source: LEXTA

A cost-benefit evaluation of possible IT-security measures is conducted

high

medium

low

Ben

efit

Estimated investment and operating expenses in thousand € p. a.

Estimated investment and operating expenses in thousand € p. a.

Ben

efit

high

medium

low

< 100200 - 100> 200 < 100200 - 100> 200

Infrastructure layerApplication layer

Integritytest/

Tripwire

Operation manual,

emergencymanual

Penetration tests

Delay and blocking

mechanisms

SSLEnforcement

Password conventions

Securepassword

transmission

Operationmanual,

emergencymanual

Multi-factor

authenti-cation

Penetrationtests

EVALUATION IT-SECURITY MEASURES EXAMPLE


Exhibit 51

The typical project procedure for IT risk management conforms with ISO 27001

Identify risk treatmentAnalyse risksIdentify risksDefine scope

Select and implement controls

Contents:

Phases:

• Definition of scope and boundaries

• Justification of restrictions

• Setting of principles

• Taking intoaccount businessand legal orregulatoryrequirements

• Execution of securitybenchmark (point system)

• Definition of securityobjectives

• Definition of criteria riskassessment and acceptance

• Approval by Management

• Identification of assets withinscope of ISMS and owners of assets

• Identification of threats

• Identification of vulnerabilities

• Identification of impacts by lossof confidentiality, integrity and availability on assets

• Assessment of potential business impacts

• Assessment of realisticlikelihood of security failures

• Assessment of acceptance of residual risks

• Identification and evaluation of options for risktreatment:

–Apply controls

–Accept risks–Avoid risks–Transfer risks

• Cost-benefitevaluation for risktreatment

• Choice of measures and objectives

• Management autorisation of residual risks

• Formulation of statement of applicability

• Formulation of risk treatmentplan

• Implementation of risk treatmentplan

• Definition of KPIsfor rating the efficiency of measures

• Implementation of training and awarementprogrammes

• Execution of monitoring and reviewingprocedures

Formulate objectives

TYPICAL PROCEDURE

Source: ISO 27001, LEXTA



• Overview LEXTA


– IT Benchmarking

– IT Cost-Cutting

– IT Sourcing

– IT Strategy

– IT Security




Exhibit 53

• Worldwide leading telecommunications company, GER

• Worldwide leading mobile telecommunications company, GER

• Worldwide leading telecommunications company, AUT

• Europe-based internet service provider, GER

Client

• IT Benchmarking

- Execution of numerous benchmarks in all service categories

- Management of corporate benchmarking process

• IT Cost-Cutting

- Concept & implementation of global cost-cutting program

- Standardisation of data processing centre operations

- Standardisation of end-user infrastructure

- Evaluation of software distribution

- Implementation of multifunctional printers

• IT Sourcing

- Development of the sourcing strategy for the single business fields

- Concept & implementation of corporate standards for the entire IT operation

- Support and moderation SLA- and price negotiation, amongst other things SAP and IPTV

• IT Strategy

- Development of the IT Strategy of multiple business fields

- Accompanying a Dual-Vendor-Strategy for Hardware purchases

- Introduction COBIT

Project experience

Source: LEXTA

LEXTA has profound experience in IT management

REFERENCES TELECOMMUNICATIONS AND MEDIA

Exhibit 53


Exhibit 54

• IT Benchmarking

– Entire IT operations

– Project management

• IT Strategy: new orientation of IT activities

• Municipal utility company, GER

• IT Strategy

– Concept and implementation IT governance

– Reorganisation of the entire IT

• Regional utility company of a DAX30 group, GER

• IT Benchmarking• Municipal utility company, CH

• IT Benchmarking• Worldwide leading company for gas transportation and storage, GER

Client Project experience

Source: LEXTA

REFERENCES UTILITIES (1 OF 5)


Exhibit 54


Exhibit 55

• IT Benchmarking

– Performance comparison of IT providers within the corporation

– Execution of numerous benchmarks in all service categories

• IT Cost-Cutting

– Lever concepts to reduce the IT costs

– Effective result oriented application for multiple regional providers

• IT Sourcing

– Moderation during alignment of shared service models

– Outsourcing of the IT operations in form of a “shared service” for multiple business units

– Support during negotiations with the IT provider

• IT Strategy

– Development of a blueprint for business units

– Concept for a centralised Networking provider in the corporation

– Development of telephony strategy for diverse business units

– Concept for a wind power information system

• Miscellaneous

– Project controlling during the implementation of SAP IS-U/EDM/BW/CRM

• Worldwide leading energy supply company of DAX30, GER

• Multiple regional utility companies of a DAX30 group, GER


Source: LEXTA



Exhibit 55


Exhibit 56

• IT Benchmarking

– benchmarking of the entire IT operations

• IT Sourcing

– accompanying the proposal process

• IT Strategy

– development of IT Strategy & governance

• Internationally leading gas carrier, GER

• IT Benchmarking• Regional utility company, GER

• IT Benchmarking

• IT Sourcing

– buildup of service level management

• IT Strategy

– concept and adjustment of IT governance

• Leading national utility company, GER

• IT Benchmarking• Regional utility company, GER


Source: LEXTA



Exhibit 56


Exhibit 57

• Strategy check IT service provider• Leading network of regional gas suppliers, GER

• IT Benchmarking • Municipal utility company, GER

• Assessment of the security- and quality standards for IT operations • Leading internet trading platform for storage capacity, GER

• IT Strategy

– development of the strategy for telephony

• Worldwide leading electric utility company of a DAX30 group, GER

• IT Sourcing

– assembly of a consolidated service level management

• IT Strategy

– supervision of the data processing centre during the PMI-Phase

• Big utility company of a european energy combine, GER


Source: LEXTA



Exhibit 57


Exhibit 58

• Assessment of the security- and quality standards for IT operations • Leading importer of gas and regional utility company, GER


Source: LEXTA



Exhibit 58


Exhibit 59

• Benchmarking

• Introduction of IT security, organisation and risk management

• Worldwide leading plant breeding company, GER

• IT Strategy• Leading manufacturer of health care products, GER

• IT Benchmarking

• IT Cost-Cutting: Consolidation of the data processing centre

• IT Strategy:

– Feasibility- and economic efficiency study & transition dealership-management-systems

– Transition strategy of operating system

• Internationally leading automotive manufacturer, GER

• IT Benchmarking• Worldwide leading semiconductor manufacturer, GER

• IT Benchmarking

• IT Cost-Cutting:

– Increase of efficiency during application usage

– Lever concept of infrastructure costs

• International premium automotive manufacturer of DAX30, GER


Source: LEXTA

REFERENCES INDUSTRY (1 OF 2)


Exhibit 59


Exhibit 60

• IT Benchmarking

• IT Sourcing: evaluation reporting

• IT Strategy: Organisation concept during the PMI-Phase

• Worldwide leading pharma group, GER

• IT Strategy• Top 3 of automobile importer in Germany, GER

• IT Benchmarking of the entire IT operations • Most profitable automotive manufacturer, GER and USA

• IT Benchmarking

• Rheingauer Kreis

• Worldwide operating manufactuer • IT-benchmarking File-Services of quality steel, GER


Source: LEXTA

REFERENCES INDUSTRY (2 OF 2)


Exhibit 60


Exhibit 61

• IT Benchmarking

• IT Sourcing

– optimisation of the offer process

• IT Strategy

– market entry in the telephony business


• Mid-sized software house, GER

• IT Benchmarking• Major regional IT service provider, GER

• Audit product strategy and market potential analysis • Major regional IT service provider, GER

• IT Benchmarking• IT-service provider of a DAX30 group, GER


Source: LEXTA

REFERENCES SERVICE PROVIDERS (1 OF 2)


Exhibit 61


Exhibit 62

• Benchmarking• Mid-sized software house, GER

• IT Benchmarking

• IT Cost-Cutting

– business case for the introduction of multi function printers


• IT-service provider subsidiary of a internationally leading air carrier, GER

• IT Benchmarking:

– Accompanying the benchmark process with key accounts

– Development of a tool to estimate project costs

• IT Strategy

– Applications strategy for a key account


• Europe-wide leading IT service provider, GER


Source: LEXTA

REFERENCES SERVICE PROVIDERS (2 OF 2)


Exhibit 62


Exhibit 63

• Rheingauer Kreis• Leading european financial service group

• IT Benchmarking

• IT Cost-Cutting

• IT Sourcing

– Buildup accounting for services

• Credit union, GER

• IT Cost-Cutting

– Leverage concept

• IT Strategy

• Big multivendor vehicle financer, GER

• IT Benchmarking

• IT outsourcing process


• IT-service provider of an international leading insurance group, GER


Source: LEXTA

REFERENCES FINANCIAL SERVICE PROVIDERS


Exhibit 63


Exhibit 64

• IT Benchmarking• Regionally leading full service bank, GER

• IT Benchmarking

• Development of a key data system for IT operations


• Cooperative insurance group, GER

• Optimisation of operations process

• Skill-Review of staff

• Internationally leading private bank, GER


Source: LEXTA

REFERENCES FINANCIAL SERVICE PROVIDERS


Exhibit 64


Exhibit 65

• IT Benchmarking• Worldwide leading media group, GER

• IT Benchmarking

– Project business

– SAP operations

• Worldwide leading publisher group, GER

• National leading information serviceprovider, A

Client

• IT-Sourcing: Support with offer and integration process for a Key Account

Project experience

Source: LEXTA

REFERENCES MEDIA


Exhibit 65


Exhibit 66

• IT-Benchmarking

– Complete IT operation

• IT-Cost-Cutting

– Overall programme for cost-cutting

– Professionalisation of project business

• IT-Sourcing

– Support in negotiations with service provider

– Development of a service-level management organisation

• IT-Strategy

– Development IT strategy

• Nationally leading real estate service provider, GER

• IT Benchmarking

• IT Cost-Cutting

• Mid-sized facility management company, GER

• IT Benchmarking

• IT Cost-Cutting

– Concept and application of the entire program

• Regionally leading real estate service provider, GER


Source: LEXTA

REFERENCES REALESTATE PROVIDER


Exhibit 66


Exhibit 67

• IT Benchmarking• Largest private bus and train company in •Benchmarking IT operations Germany, GER

• IT-Sourcing

– Compilation of a product and service catalogue

• Leading european logistics gruop, GER

• IT Benchmarking• Nationally leading consumer research company, GER

• IT Strategy for product resource planning

• IT Sourcing (data processing centre, WAN)

• Nationally major furniture trading company, GER

• IT Benchmarking: preparation of a telecommunications benchmark

– Telecommunication

• Leading international transportation and logistics group, GER

• IT Benchmarking (D, E, HU, J, USA)

• Evaluation reporting

• Nationally leading service provider, GER


Source: LEXTA

REFERENCES SERVICE PROVIDERS AND LOGISTICS


Exhibit 67


Exhibit 68

• IT Benchmarking• Municipal service provider, GER

• IT Sourcing: development of product and service catalogues for the IT systems house

• Largest service provider at labour market in Germany, GER

• IT Benchmarking with „Benchmarking@Lexta“ (pro bono)• Regional subsidiary of an international relieforganisation

• IT Benchmarking• Nationally leading health insurance, GER

• IT Benchmarking• Municipal service provider, GER


Source: LEXTA

REFERENCES PUBLBIC ORGANISATIONS


Exhibit 68



Frank BaumannManaging Director

LEXTA GmbHDorotheenstraße 3710117 BerlinGermany

http://www.LEXTA.com

Phone +49-(0) 30-88 71 24-0Fax +49-(0) 30-88 71 24-20Mobile +49-(0) 172-760 6738E-mail [email protected]

Please contact us for further information

CONTACT INFORMATION

Source: LEXTA

competence in it management · • it management competence – it benchmarking – it cost-cutting...

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