Strategic IT planning leads to million-dollar savings

CustomerThis global player in the oil and gas industry provides customers fuel, energy and petrochemicals. More than 85,000 employees worldwide generate annual revenues of over $300 billion. The enterprise portfolio includes upstream and downstream sectors, and exploration and production takes place in over 30 countries.

IndustryOil and gas

Opportunity• Optimize IT investments

• Simplify complex legacy of thousands of applications

• Build information repository to specify all IT components and relationships to business processes

• Increase business collaboration on IT related topics

• Align application landscape with multi-year strategic road map

Solution SetAlfabet Enterprise Architecture Management

Key benefi ts• Application rationalization saved $13 million

in fi rst year operations

• Company depends upon 7 percent fewer applications

• Application transparency helps improve communications and minimize business risk

• 85 percent of IT asset investment is now aligned with strategic goals

“ We had the benefi t of some quick wins in terms of application realization. That amounted to about $13 million in the fi rst year—far more than the cost of the program.”— Head of Enterprise Architecture

A billion-dollar question This large global player in the oil and gas industry spends over $1 billion annually in technology to help organize, store and share the information that drives the business. Over a period of time, the enterprise IT infrastructure had become complicated, built piecemeal throughout the company’s business units and a tangled web of legacy systems from mergers and acquisitions dating back to the early 1980s. Best estimates were some 8,000 applications cost the company over $600 million to run annually.

Despite that the enterprise spent such a signifi cant amount each year on new systems, there was no alignment to a multi-year road map. Application strategies were inconsistent across the business units, and there was no common architecture or strategy. To remedy the situation, the CIO gave the enterprise architecture team the task to go and fi gure it out. The solution the team came up with was called the Bill of IT, a revolutionary way of optimizing the enterprise’s investment and simplifying the complex legacy of 8,000 applications.

APPLICATIONRATIONALIZATIONyields quick win of $13 M

IMPROVEDCAPITALEFFICIENCY of IT asset investment

is strategic

85%

7%

Get There Faster

Get There Faster

Find out how to power up your Digital Enterprise at www.SoftwareAG.com

ABOUT SOFTWARE AGSoftware AG helps organizations achieve their business objectives faster. The company’s big data, integration and businessprocess technologies enable customers to drive operational effi ciency, modernize their systems and optimize processes forsmarter decisions and better service. Building on over 40 years of customer-centric innovation, the company is ranked as a“leader” in 14 market categories, fueled by core product families Adabas-Natural, Alfabet, Apama, ARIS, Terracotta andwebMethods. Learn more at www.SoftwareAG.com.

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Reference Story | Oil & Gas Industry

The Bill of ITIn manufacturing, a bill of materials specifi es all the components required for a product and how they fi t together. The enterprise’s vision of a Bill of IT works in the same way. It comprises a list of all the IT components in an organization and how they fi t together to support the business processes. The team decided to produce a Bill of IT for the current state and for the desired situation in three to fi ve years´ time.

The team fi rst undertook a rigorous survey of the application landscape, mapping applications to business processes, and classifying applications according to whether they were critical or strategic. Only those fi tting both criteria became part of the Bill of IT.

Next, the enterprise architects worked with more than 300 people from around the organization to defi ne the future Bill of IT: what the company’s business processes would be and the IT infrastructure needed to support this.

Creating the road mapOnce a Bill of IT was established for each business unit, a road map and spending framework were agreed upon to align spending as closely as possible to the strategic goals. The only other spending that was sanctioned went on maintaining the integrity of operations and addressing unexpected gaps.

Each business unit, too, established performance indicators: metrics to show where the money was going, and progress towards the Bill of IT. Alfabet was chosen as the central repository of all the information needed for the whole Bill of IT process including target states, application-to-business-process,relationships and road maps.

Quick wins and future rewards Results were immediate. “We had the benefi t of some quick wins in terms of application rationalization,” the company’s head of enterprise architecture says. “That amounted to about $13 million in the fi rst yea—far more than the cost of the program.” The company now depends upon 7 percent fewer applications. The company is also able to maximize the return on its $1 billion annual spend on IT: 85 percent of IT asset investment is now aligned with its strategic goals.

Alfabet has also helped to provide a true understanding of the applications it uses.

“We can now provide application costing,” he explains “Business doesn’t know, typically, how much an application costs to run and manage. It’s very useful for transparency purposes. We also can give obsolescence reports. We still have a signifi cant landscape of Windows® 2000, Oracle® 10 and Solaris® 8, and it’s very important that we direct our investments to move on from those platforms at the most critical, the most important points, so we can replace them appropriately. We want to minimize our risk, so knowing which business processes those applications are privy to, making those investments and moving on are incredibly important to us.”

Within its three-year change process, the company is embedding the good practices in everyday routines. According to the head of enterprise architecture, the work will lead to improved capital effi ciency and operational integration, as well as helping towards disaster recovery planning and mitigating technology risks. “Next year we expect it to be largely business as usual,” he says. “That doesn’t mean it’s all fi nished—there’s always ongoing work to be done—but it does mean we’ve got over the hump of creating all the initial information we needed.”

“Alfabet was very helpful to us, as a structured way of storing all the data and the metadata we needed for providing the analysis.” — Head of Enterprise Architecture