In today’s dynamic business world, efficient IT strategies are critical to success. The 6R strategy, Gartner TIME methodology, Development Technology Radar and Clean Core offer valuable tools for optimizing IT landscapes. They promote the standardization, harmonization and integration of new technologies, drive innovation and reduce costs. Find out here how these methods can help you strengthen your competitiveness and react agilely to market changes.

Simplify IT: Tidying up the IT landscape – introduction, big picture, TIME methodology

In order to reduce IT costs and facilitate the integration of company acquisitions, simplifying the application landscape is essential. This also enables the optimization of business processes (e.g. technical ERP templates) and their costs. The application of methods such as the 6R strategy or the Gartner TIME methodology supports companies in making their IT more efficient.

A tidy IT landscape not only saves IT costs, but also reduces operational (Opex) and investment costs (capex) in other areas of the company. For example, standardized ERP solutions can be used to standardize business processes in different locations. This enables the establishment of so-called “shared service centers” that take over central support functions (such as HR, accounting, controlling, etc.) for several countries. This avoids each country having its own support departments, which reduces costs while reducing operational costs (Opex).

Complicated and expensive IT structures, the so-called “application zoo”, often arise when there is no clear IT strategy or companies are acquired. This complexity not only increases the IT operating costs (Opex), for example through additional software licenses and specialized personnel, but also the investment costs (Capex) for the maintenance and further development of the many different systems. In addition, this complicates transparency and reporting in finance departments, which in turn leads to additional workarounds, e.g. to prepare monthly or annual financial statements.

A central task of the IT strategy is to keep the IT landscape lean and standardized in order to avoid unnecessary investments (capex) and high ongoing operating costs (Opex). This means clearly defining which business processes are supported with which systems. This prevents new systems (shadow IT) from being introduced uncontrollably and unnecessarily complicating the IT landscape. If this control is missing, IT costs and complexity are further increased by redundant projects.

In practice, methods such as the 6R strategy or the Gartner TIME methodology help to analyze the IT landscape and make recommendations on which systems should be removed, retained, modernized or replaced. A tidy IT landscape thus not only reduces opex and capex, but also facilitates the integration of new companies (post-merger integration) or the outsourcing of corporate divisions (carve-outs).

Clean Core: Practical Tip for Business Addressees, SAP Consolidation, Guiding Principles

Clean Core is an approach to standardize and harmonize SAP systems by means of Guiding Principles in order to promote innovation and maintain a solid technological basis. The Clean Core approach focuses on ERP systems that are as close to the standard as possible, while also incorporating cloud-compliant extensions and integrations. Strong governance is required for every technical dimension of Clean Core SAP.

The clean core approach helps companies to make their SAP systems more efficient and future-proof. The aim is to avoid in-house developments as much as possible and to use the manufacturer’s standardized business processes. When moving to SAP S/4HANA, many companies are taking advantage of this opportunity to consolidate their systems and harmonize workflows.

This standardization often requires an adjustment of the way of working in the departments and leads to intensive discussions about the best solution. In order to maintain an overview and protect the Clean Core, so-called “Guiding Principles” (GP) are used. These guidelines specify how much standardization is needed and when adjustments are warranted:

GP1: Use of the standard solution.

GP2: Extension of the standard only if necessary.

GP3: New solutions replace existing adaptations if they are more suitable.

GP4: Temporary adjustments only in exceptional cases.

These principles help to avoid too much fragmentation of the IT landscape and ensure that projects can be implemented quickly and efficiently. For example, one company was able to successfully integrate a major acquisition with 1,500 ERP users and ten global production sites into the global SAP system within nine months.

Dev Tech Radar: Practical Tip for Tech Addressees, Lifecycle Management Using Technology Radar Using the Example of Development Technologies

The Development Technology Radar helps companies assess trends in development technologies to make informed strategic investment decisions about which technologies to pursue and which to avoid.

The world is becoming more and more complex, and especially when it comes to technologies and innovations, companies have to distinguish between short-lived trends and long-term stable developments. This is particularly important when it comes to digital business models and the automation of processes. There are many options when it comes to technology choices, and it’s often hard to predict which trends will prevail in the long term.

Enterprise architecture helps to manage this complexity. It provides a model that maps technologies and their use in applications. This allows you to quickly identify outdated or unwanted technologies. A Development Technology Radar, for example, shows which technologies are used in the company and in which phase of their life cycle they are.

The radar supports the strategic selection of technologies and helps to set clear guidelines for developers. This ensures that the IT strategy is aligned with the corporate strategy and that investments are only made in future-proof technologies.

The figure below shows a typical development technology radar of a large company. On display are over 100 different development technologies that are used in the various phases of the life cycle. The circles present the technology assessment in four levels from undesirable to fully suitable. On the basis of the radar, internal and external developers are pointed out to desired technologies and necessary measures are planned for existing applications with undesirable technologies. In practice, the Development Technology Radar should be integrated into IT strategy and governance to establish a unified and integrated process that also includes alignment of corporate strategy with IT strategy and requirements management (functional and non-functional requirements) in the selection of technology and innovation decisions.

The authors

Gunnar Weider studied industrial engineering at the Technical University of Darmstadt and started in 1995 in the IT department of Evonik’s predecessor company Röhm GmbH & Co. KG. After holding various positions in business and IT service, he moved to the Group initiative to build Evonik’s global SAP platform in 2013. In 2015, Gunnar Weider established the Process and IT Management of the Nutrition & Care segment of Evonik Industries AG. Since April 2019, he has been in charge of IT Strategy, Processes & Architecture across the Group and since September 2023 of IT Strategy & Governance.

 

Christian Plath is a Partner at Deloitte and heads M&A Tech Services in Germany and M&A Transaction Services in the Frankfurt office. He has been working in the areas of M&A and Business & IT Transformation for almost 30 years. His current focus areas include operational & tech/IT due diligence, carve-out, post-merger integration, performance optimization, transformation and value creation. Christian Plath completed a double degree in economics and electrical engineering with a minor in software engineering at the Ruhr University Bochum. He holds certifications as a CVA (Certified Valuation Analyst) from NACVA/EACVA and as a Qualified Supervisory Board member (Deutsche Börse AG).