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White PaPerAPPLICATION MANAGEMENTAND MODERNIZATION MATuRITybENChMARk

WhITE PAPER aPPLication management and modernization maturity benchmark

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content

introduction to it benchmarking

the amm maturity benchmarkgeneraL observations and findingsimPortant benchmarks

detaiLed anaLyticaL resuLtsoutsourcing better than onsite budget doesn’t aLWays mean more maturityobjectives aren’t easy to meet

additionaL information

sources and figures

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introduction to it benchmarking

Comparing how a specific activity is performed against the methods of a competitor or other organizations doing the same is a way to identify best practices and to find ways to be more efficient, improve the out-come over time and even possibly lower costs (eNotes, 2012). When it comes to the IT services industry, the primary question asked by organi-zations outsourcing their IT is whether they receive value for money from their IT service provider. The difficulty in answering that question is the fact that the spectrum of IT services across organizations are different from each other and hence conducting a comparative study to extract an objective benchmark is often a huge challenge (Limited, 2002).

however, it is still possible to segregate IT services into categories or service groups such as Desktop Software Services, Application Manage-ment, Server Management, Networks, Infrastructure, etc. and be able to orchestrate a benchmark study based on the common areas within these groups. One such benchmarking study within the scope of Application Management and Modernization (AMM) services operated by T-Systems International Gmbh has been carried out using a tool developed at the company’s Global Competence Center for AMM. This tool, called the AMM Maturity benchmark, is T-Systems’ offering to the AMM market across all industries. In the following sections of this paper, an overview of the tool is discussed, before diving into the initial findings of the study.The data collection for this study was done over a period of 7 months from April to November 2012 for more than 70 services currently run by T-Systems. In November 2012, each participant received its individual report with recommendations on how to optomize its Application Landscape.

benchmarking as a general term is defined as the measurement of the quality of a company’s or an organization’s policies, products, processes, strategies, etc. and their comparison to standard measurements or the measurements used by their peers (Luthra, 2012).


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the amm maturity benchmark

The AMM Maturity Benchmark aims to assess and measure the maturi-ty of the AMM portfolio of an IT service, and compare it to other services, both within and across industries. It offers participants the opportunity to rate themselves among their peers in the global AMM market. The tool is implemented via an online survey, in which the questions are divided into 6 different categories, based on which the AMM services are benchmar-ked. These categories can be seen in Figure 1. Each of these categories results in benchmark values such as average, best-in-class, worst-in-class maturity which will be showcased in later sections. In addition, the maturity of ITIL processes such as Incident Management, Change Management, Release Management, etc. are also discussed and com-pared against different variables in order to infer common trends among the AMM services.

generaL observations and findings

When it comes to the general trends exhibited by the study results, most complied with the expected findings, however there were a few surprising observations that were worth noting. As anticipated, the most chosen or preferred AMM objectives of the universal set were “Stability of the IT-Landscape” and “Long Term Cost reduction”. This was even more apparent among the IT services that were operated in the automotive sector.

categories of questions

FIG. 1

Among the importance given to the various IT chain activities, it was rather logical that “Application Management” be the most significant among the participants. In keeping with ever changing industrial and technological advancements, the results also showed that services look to increasingly modernize or innovate their business processes as well as pay much more importance now, to “IT Strategy” and its alignment with the business, than in the past. This suggests the realization that IT is no longer a mere supporting function, but must be given its due when it comes to the vision and the future planning of an organization.

Objectives and Strategy

A BIS Assessment analyses the Current Mode of Operation (CMO) and then applies more than 25 leading-practice savings techniques (“levers”), including industrialization, consolidation and transformation to identify and define concrete optimization projects/programs. The corresponding CAPEX/OPEX requirements and benefits are estimated as well to enable you to make an informed decison on the way forward.

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Governance

Processes and Tools

Mas

ter D

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Security and Privacy

People Service-Infrastructure

BIS Assessment*

ITIL / ISO 20.000

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White PaPer APPLicAtion mAnAgement And modernizAtion mAturity benchmArk

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An interesting finding from an IT service provider’s point of view is that most of the services rely heavily on second and third level of support. This leaves plenty of room for introducing a first level support such as help desks or shifting the balance of tasks that are carried out towards a first level support structure. This would significantly help to reduce costs and wherever possible, could be a key to help services achieve their most important long term goals. Another intriguing observation was that among the 35% of the participants who run some amount of SAP appli-cations within their portfolio, more than 60% of those applications were used in the Logistic domain, while less than 12% use those applications in the Production or Manufacturing domain, and approximately only 18% use them to assist their Procurement functions. This shows the ten-dency of European AMM services to prefer SAP for its renowned Logisti-cs suite while making use of a combination of Legacy and Modern Open Systems to facilitate Production heavy and other functional clusters.

imPortant benchmarks

In addition to the general patterns and trends that the study con-firmed or revealed, the numerical values representing the maturity of the benchmarked processes within the AMM services, also makes for interesting reading. These are summarized in Figure 2. Among all the ITIL processes to do with Service Management, Incident Management had the highest average maturity. It also had the least percentage of services with a maturity of 0, on the 0-5 scale, indicating that most services implement Incident Management as a primary process, even if other processes are neglected. Other important processes like Problem Management and Change Management were lower in terms of average maturity, both at values close to 2. however one process often found neglected was Configuration Management, with 50% of the participants not implementing it at all.

Apart from the ITIL processes, other benchmarks like the maturity of “Service Documentation” and “Training and Skill Management” also yielded compelling results, with the best-in-class maturity in these categories being only a value of 4. This shows the tendency of IT service managers to not spend too many resources on improving documenta-tion quality as well as investing money in training the people so that the correct skills are acquired. Often, these parts of running a service are overlooked and it has been proven so with the help of this survey as well.

some imPortant benchmarks

FIG. 2

Average Maturity

Mat

urity

5

4

3

2

1

0IncidentManagement

ProblemManagement

ChangeManagement

ConfigurationManagement

Training and SkillManagement

ServiceDokumentation

Best in Class

WhITE PAPER oPPortunities and chaLLenges for big data in the automotive industry

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outsourcing better than onsite

This result discusses how the maturity of different processes varies depending on whether the service is run completely onsite or from mul-tiple on-shore, near-shore and off-shore locations. The universal set was divided into two groups - one where 37% of the services were operated exclusively on-site at the client location, while the remaining services were spread over various locations from where the service provider deliver-ed the service. The average maturity for these groups across various processes were then analyzed. Figure 3 shows that the average maturity is consistently higher, across all processes, in the group where the service is outsourced and not operated solely at the client location. This reinforces the fact that processes and structures are more likely to be implemented when the service provider has more control and operates the service with tools, policies and laws that are better known to them. When operated from on-site, the providers generally tend to adapt or change their pro-cesses to the pre-existing client environment and this often leads to them operating at a lower maturity. It is important to understand, however, that simply outsourcing application maintenance is not a solution to increase maturity. It needs to be done taking into account the client situation and also the various trade-offs involved across the different operational areas.

budget doesn’t aLWays mean more maturity

It is often believed that a manager who has more budget to his disposal will be able to operate his service at a more mature level and hence gu-arantee higher customer satisfaction. This observation does not support that belief and instead shows that maturity is not always achievable if more funds are made available. Figure 4 clearly demonstrates that all AMM processes do not exhibit more maturity, just by the fact that more AM budget is available to use. For processes like Incident Management and IT Security and Privacy, clear differences in maturity level can be seen. This is fairly comprehendible as implementation of service desks, Incident Management boards, buying licensed ticketing tools or setting up firewalls, server and data rooms or other security features are expensive but at the same time contribute to increasing the maturity. In terms of processes such as Training and Skill Management, it is more important to know what kind of training to invest the available budget on, in order to make it more mature. Similarly for Documentation, using the right documentation such as Service Manual, Configuration Db, etc. is more important as it also affects the maturity of the other processes that are involved. In implementing the correct Governance procedures and RACI within a service, more can be drawn from following it closely, rather than spending money on organizing emergency meetings or handling escalations.

detaiLed anaLyticaL resuLts

The participants in the study were broken down into various peer groups containing similar features like budget, technology, size of the service, global sourcing mix, etc. and the maturity over these groups were compared to each other, within each category. It made for some interesting revelations and in this section, a discussion of a few of these findings has been covered.

effect of gLobaL sourcing on maturity

FIG. 3

effect of am budget on maturity

FIG. 4

Aver

age

Mat

urity

0,5

1

1,5

2

2,5

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IncidentManage-ment

ChangeManage-ment

ReleaseManage-ment

Service LevelManage-ment

Know-ledgeManage-ment

Training and SkillManage-ment

ServiceDocumen-tation

Gover-nance

Security & Privacy

Multiple locations

0

Completely onsite

Aver

age

Mat

urity

0,5

1

1,5

2

2,5

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IncidentManagement

ProblemManagement

Less than 1 Mio AM Budget

0ReleaseManagement

Training and SkillManagement

ServiceDocumentation

Governance Security &Privacy

More than 1 Mio AM Budget


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objectives aren’t easy to meet

As service objectives and importance given to various IT value chain activities act as a baseline for a service and how it performs, an exami-nation of how effectively services have achieved their most important objectives, especially those that are measurable with this benchmarking tool, was carried out. Two components of the service’s strategy were looked at closely: “Security & Data Privacy” and “Importance given to Operational Application Management”. It was found that only one-third of the services who listed “Security & Data Privacy” as one of their top three objectives could be classified as mature in that process. In this case maturity is considered to be achieved if the service has a maturity value of 3 or more on a scale of 5. This can be seen in Figure 5, which gives a breakup of the entire universal set and its performance in the “Security & Data Privacy” parameter.

A further analysis of objectives and the success in achieving them was carried out using the importance given to “Operational Application Management” as an IT value chain activity. To measure the performance in this area, it was decided to take into account the services maturity in Release Management and Service Level Management, which are extre-mely significant activities in an AM service and are ITIL core processes. Other important activities like Incident, Problem and Change Manage-ment were ignored because it was seen in section 2.2 that most services pay most attention to these services and they achieved a relatively high average maturity. For similar reasons, Configuration Management was not taken into account to assess Application Management because it has a very low average maturity level, showing that most services choose to neglect its implementation. here too, as can be seen in Figure 6, results showed that the majority of participants who list “Operational AM” as a very important activity, fail to back that objective up with maturity in that activity. Only 24% of the services showed maturity in Release Management, while less than 50% of them exhibited maturity in Service Level Management.

security and data Privacy as an objective

oPerationaL aPPLication management as an it vaLue chain activity

FIG. 5

FIG. 6

For these services, a strong recommendation would be to focus on bringing those processes to a more mature level, which are important to them as part of strategy or objectives. Action items or improvement plans for all processes are formulated as part of the customized service report, which every participant receives as part of taking part in this survey.

The results above show that this tool can prove to be a good assessment of any customer’s application landscape, but is highly reliant on the answers being accurate and complete, without any biases. In addition, it must be remembered that the AMM Maturity benchmark is intended to be a catalyst to opening a discussion on the entire service level and not a detailed analysis of each application within the scope of the service. If these two important factors are considered, this offering can be success-ful in evaluating and benchmarking AMM services, no matter where they are run, or which industry they operate in.

100%

50%

25%

75%

0%

OtherServices

Security& Privacyimportantobjective

Immature inSecurity &

Data Privacy

Mature inSecurity &

Data Privacy

100%

50%

25%

75%

0%

OtherServices

Release Management

Service Level Management

OperationalAM as animportantobjective

ImmatureServices

MatureServices

ImmatureServices

MatureServices

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The AMM Maturity Benchmark is a T-Systems offering used to assess the current mode of operations of an Application Management Service over all its constituent aspects. It is run out of the Advisory Practice unit of the Global Competence Center for Application Management and Mo-dernization. Apart from providing the benchmark data and a set of AMM to-dos, the tool can act as a door opener for potential AMM business with completely new clients. It can also be used by existing accounts to strengthen their client relationship, by drawing up improvement plans for existing services and become a trusted advisor for all AMM related activities.

In order to find out more about the AMM Maturity benchmark & for a free trial visit the landing page of the tool at:http://www.t-systems.com/solutions/amm-maturity-benchmark-your-path-to-a-more-efficient-future-proof-application-landscape-and-more-happy-users-/1062674

T-Systems is Deutsche Telekom’s corporate customer arm. using a global infrastructure of data centers and networks, T-Systems operates information and communication technology (ICT) systems for multina-tional corporation and public sector institutions. With offices in over 20 countries and global delivery capabilities, T-Systems serves companies in all industries – from the automotive industry to telecommunications, the financial sector, retail, services, media, energy, and the manufacturing industry all the way to government agencies and the healthcare sector. Approximately 48,200 employees worldwide use their industry expertise and ICT know-how to provide top quality service. T-Systems generated revenue of around EuR 9.2 billion in the 2011 financial year.

additionaL information


about the eXPert

Darryl Lowe is a consultant within the Global Competence Center for Application Management & Modernization (AMM). his work-experience includes large AMS projects, after initially joining the IT service industry as a software developer. his responsi-bilities included Incident Management, offshore team co-ordination and management of operational activities and processes. he also led teams working on critical change requests and development projects within the AMS deal. At the GCC AMM, he is responsible for the AMM Maturity benchmark and is the product owner. he has also been involved in the development and release of other tools and methodologies related to T-Systems’ AMbition book to support various consulting projects and bids dealing with a wide base of international clients.

The GCC AMM is a multinational team of more than 30 consultants and project managers who specialize in the implementation of critical application outsourcing projects. big AMM deals are accom-panied “from Lead to FMO“ above all branches, technologies and countries.

This Expert Paper is published within the “Experts on Application Management & Modernization“ column. For more information go to: www.t-systems.com


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sources and figures

ENOTES. (2012) abgerufen am 27. november 2012 von enotes: httP://WWW.enotes.com

LIMITED, F. &. (2002) benchmarking it services. nsW: farreLL & associates Pty. Limited.

LuThRA, V. (2012) onLine business dictionary. abgerufen am 27. november 2012 von onLine business dictionary: httP://WWW.businessdictionary.com

FIGuRE 1 categories of questions

FIGuRE 2 some imPortant benchmarks

FIGuRE 3 effect of gLobaL sourcing on maturity

FIGuRE 4 effect of am budget

FIGuRE 5 security and data Privacy as an objective

FIGuRE 6 oPerationaL am as an it vaLue chain activity

sources

figures

contact

T-Systems International GmbhGlobal Competence Center AMMDarryl LoweFasanenweg 570771 Leinfelden-Echterdingen, [email protected]

T-Systems International Gmbh Market Intelligencehermann hänleFasanenweg 570771 Leinfelden-Echterdingen, [email protected]

T-Systems International GmbhProduct MarketingStefan SpielbauerDachauer Str. 65180995 München, [email protected]

PubLished by

T-Systems International Gmbhhahnstraße 43d60325 Frankfurt, Germany

Responsible for content:Focus Industries Marketing

http://www.t-systems.com

Last revised: March 2013

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