2. Application Portfolio Management in the Context of a Global Enterprise Architecture Programme
Martin Dawson and Mark-Jan Paanakker,
Shell International Petroleum Company

3. Presenters Martin Dawson Shell B2B/Lubes Application Architect
Mark-Jan Paanakker
Shell Downstream Lead Application Architect

4. Shell Downstream Business
Refining oil into fuels and lubricants
Producing petrochemicals
Developing biofuels
Trading
Retail sales
Managing CO2 emissions
Supply and distribution
Business-to-business sales
Add statement about Shell overall business
100 countries
Business areas – Upstream, Projects and Technology, Downstream
Describe Shell Downstream business.
Turnover: $250bn
Operates in 100 countries worldwide
65,000 staff

5. Downstream One Transformation
2001 – Need to standardise and simplify business processes
2003 – Streamline governance
2005 – Global business structure
Going back to basics
Simplified Customer Offering
Common Set of Global Processes
Single Instance of SAP
Consolidated Portfolio of Applications
Design
35 Countries
4 Global Businesses
7 Major Releases
Deploy
Process and Portfolio Improvement
Roadmaps
Performance Metrics
Harvest and Sustain
2001
2011
Original anticipated cost $1.2bn. Benefits $500m per annum
Both costs and identified benefits greater than original business case
Compare to US Navy ERP implementation : $1.4bn
NHS Systems replacement: £12m
Emphasis that this is, in all but name, a very large Enterprise Architecture programme

6. > 40 ERP Systems
Enterprise Architecture: Design and Deploy Managing the transformation of a very large global portfolio of applications
Martin Dawson
> 6500 Applications

7. Shell Architecture Development
DS-1 Vision
Architecture Principles
Harvest and Sustain
Streamline
Process Model
Select Target Applications
Decommission
Methodology followed was not TOGAF
Large number of similarities
In presentation today going to discuss elements of the approach (highlighted)
Particular emphasis on the management of the Application Portfolio (highlighted in red)
Deploy
Implement

8. Architecture Development: Focus on Portfolio Management
Select ‘Target’ applications
Implement and Assure
Deploy
Decommission
Legacy
Architecture
Principles
Business
Architecture
Harvest and Sustain

9. DS-1 Vision – Going Back to Basics
Global standard customer offerings
Restricted portfolio of products and services
Common global processes
Manage Bulk Hydrocarbons Supply
Manufacture
Manage Lubricants Supply Chain
Manage Product Lifecycle
Sell to Business Customers
Sell to Cards Customer
Sell to Retail Customer
Provide Financial and Support Services
Global business model replaces country based operations
Overall Architecture Vision – driving business architecture in terms of organisation, functions and processes.

10. Architecture Principles
Organisation wide Process Model
Single global instance of SAP
Portfolio of ‘Connected Applications’
Rationalised global set of standard processes and applications

11. Information Architecture
Emphasis on delivery of application functionality
More limited consideration of common data requirements
Not approached from a ‘service’ perspective
Required particular emphasis on Portfolio Management
Verbally, expand on the slide. Highlighting some key inefficiencies and major project failures
Overlapping sources of master reference data
Complex integration pattern
Replicated functionality

12. Defining Application Portfolio
Objective – Single Global portfolio of applications
Functionality areas (‘Target Areas’) identified as part of process definition and process development
Iterative process highlighting exceptions outside core SAP configuration
85% complete – some Target Areas not supported by global tool

13. Architecture Meta-Model
Business Capability
Enabled by
Process
Target Area
Define requirements
for
Realised by
Application
Used by

14. ‘Target’ Selection Principles
Solution Architecture Analysis
Internal evaluation of existing solutions
External evaluation
Procurement
Use SAP functionality:
Including consideration of developing new functionality with SAP.
When SAP is not an option, look at existing Shell applications:
Evaluation of Commercial ‘off the shelf’ (COTS) Packages
Bespoke Development

15. Selection: B2B Lubes Example
Invoice Processing
Configuration of SAP
Call Centre
Configuration of
COTS Packages + SAP
Pricing
Evaluation of COTS Packages
Bespoke Development

16. Implement and Assure
Each selected application had separate implementation project with releases tied to overall programme, e.g. CIM 2.1, 2.2 etc.
Architecture and design assured within overall governance framework

17. Deployment 7 Major Releases Release: Process design Applications suite
Current release deployed to country
New functionality/
applications retrofitted
Detailed Portfolio Reviews

18. Country Application Portfolio Review
Applications
As Is
Standard Process
Standard Tools
Included in scope of
Global Programme
Review
Non-Standard Tools replaced by New Tools
DECOMMISSION
Only if agreement:-
Process Step-Out
Business case for funding
Interfaces
Resourcing
Non-Standard Tools where study justifies
REQUEST TO KEEP
Highlight key aspects on country review
Focus on identifying exceptions to Global Portfolio:
Process gaps
Legal or fiscal requirements
Local technical requirements e.g. Plant systems
SPECIALIST: Retained indefinitely
STEP OUT: Subject to later review and replacement

19. Proactive Decommissioning Programme
Portfolio wide review to identify candidates in advance of country review
Decommissioning targets confirmed by country review
Managed programme to decommission and archive applications
Effective Retirement > 50% of original portfolio

20. Enterprise Architecture: Harvest and Sustain Appraising the performance of and managing change in the deployed portfolio
Mark-Jan Paanakker

21. Shell Architecture Development
DS-1 Vision
Harvest and Sustain
Architecture Principles
Streamline
Process Model
Target Application
Determination
Decommission
Deploy
Implement

22. Harvest & Sustain: Application Portfolio Planning
What do we have in the countries / sites?
Appraise Local Portfolio
Determine Key Apps
Appraise Global Portfolio
Define Global Roadmaps
Select Target Apps
Define Local Roadmaps
Deploy & Decommission
Actual deployment and decommissioning
What are our business critical applications?
Business
How will targets be deployed to countries?
What is the health of our key applications?
Application Portfolio Planning comprises a number of activities aimed at understanding, driving and communicating the portfolio journey. It is aligned with the Group IT Portfolio Management Framework
Which standard apps fit best our needs?
How will the portfolio change over time?

23. Appraise Local Portfolio
What do we have in the countries / sites?
The Country As-is Landscape is an as-is overview of the locally used applications and interfaces. It establishes the baseline for measuring change progress and value.

24. Determine Key Applications
What are our business critical applications?
Business Critical
High Confidentiality
High Integrity
High Availability
High Recoverability

25. Appraise Global Portfolio
What is the health of our business critical applications?
Business Critical Applications
The Strategic Application Dashboard shows the health of the global target application portfolio seen from several perspectives. It forms the starting point for the application roadmaps. Reds and Ambers should drive investments.
Business
Architecture
App Support

26. Define Global Roadmaps
How will the standard portfolio change over time?
Business
Business Process
Application Service
Application
Application Component
Technical Component
Technology
Global Application Roadmaps show the planned or possible (subject to funding) evolution of the global target portfolio based on business and technical drivers. It is input into the Investment Management process and will make that more predictable over time.
- Help to ensure asset integrity
- Align target portfolio to changing business requirements
- Surface future decision points
Technical Service

27. Define Local Roadmaps Countries Target Applications
How will targets be deployed to countries?
Countries
Target Applications
Local roadmaps show the deployment of the target portfolio to key countries, and the consequent decommissioning of legacy applications, as recorded in MYDP and ePims.

28. Application Portfolio Planning
Realizing the Business & IT Strategy
Business Strategy
IT Strategy
Appraisal:
Application landscapes as baseline for change
Appraisal of how well target portfolio supports the business
Identification of need for new targets
Planning (roadmaps):
Help to ensure asset integrity
Align target portfolio to changing business requirements
Surface future decision points
Country / Site Implementations

29. Concluding Statements
The ongoing goal of the Shell Downstream One programme has been on driving business value from rationalisation, simplification and developing operational excellence.
Execution has, in all but name, been an Enterprise Architecture programme with an emphasis on Application Portfolio Management
A highly effective Portfolio Management process has delivered a rationalised global application portfolio
As Shell seeks to ‘Harvest and Sustain’ its investment this process has been developed into a ‘best in class’ Application Portfolio Planning Process