TRANSFORMING A BUSINESS FROM LICENSE SELLING TO SERVICE PROVIDER - PowerPoint PPT Presentation

TRANSFORMING A BUSINESS FROM LICENSE SELLING TO SERVICE PROVIDER LEEN BLOM March, 2019 Classification: Restricted (V2)

TITLE PRESENTATION March 25, 2019 Classification: Restricted (V2)

ABOUT ME • Manager Research & Development at Centric • Background in software development, database management, application design, head software development, architect, R&D manager • Consultant, Manager consultancy, R&D manager • Now member of team Enterprise Innovation • Member of Contact Group Universities, guest lecturer at Rotterdam University of applied sciences Classification: Restricted (V2)

Classification: Restricted (V2)

Classification: Restricted (V2)

CENTRIC • One pillar: Software Solutions – We build applications for • Public Sector • Supply Chain • Financial Sector • Horizontal markets – About 100 software applications Classification: Restricted (V2)

AGENDA • From traditional to SaaS • From technical debt to up-to-date • Software Quality Classification: Restricted (V2)

FROM TRADITIONAL TO SAAS Classification: Restricted (V2)

Reality of our portfolio Classification: Restricted (V2)

Our approach until 2016 Classification: Restricted (V2)

Centric SaaS Classification: Restricted (V2)

SAAS TRANSFORMATION PROGRAM • Goals – Help organisation to transform applications to services – Help organisation to build a platform for services – Help organisation to automate development to operations • For – PSS, HR&PS and SCS – In cooperation with Romania, Lithuania • Team – Christiaan Konstapel, Leen Blom, Quirijn van der Goes, Cosmin Sontu*, Rene Bliekendaal, Frank de Nijs, Gert-Jan Verkerk TITLE PRESENTATION March 25, 2019 Classification: Restricted (V2)

TRANSFORMATION PRINCIPLES • Accept all maturity levels of SaaS – Applications can move easily and improve later (“vernieuwbouw”) • No major dependencies between transformation projects – Each transformation can have its own pace and lead time • Use common platform – Enables us to share as much as possible and reuse components • Automate, automate, automate – Remove any manual task after software build: test, deployment, operations TITLE PRESENTATION March 25, 2019 Classification: Restricted (V2)

PORTFOLIO ASSESSMENT Customer perspective Centric perspective large favourable high importance -> means Investment low -> feasable eDienstenSD Motion Conductor Suite4Inkomen Key2Zaken Key2WOZ Key2Financien DIS Cost Suite4Werk Portaal Suite4Jeugdzorg Motion PAY Non DEM Leefomgeving Document Profit Suite4Zorg Key2Betalen <- low importance Creation Burgerzaken <- high Key2Belastingen Key2BAG Motion Pay Added Value Added Value <- low high -> <- low high -> Classification: Restricted (V2)

Customer perspective OK: most in upper right corner Portaal Leefomgeving DEM high importance -> Motion PAY Non Profit Motion Key2Belastingen Motion Pay eDienstenSD Suite4Jeugdzorg Key2Betalen Document Creation Key2Zaken Suite4Inkomen Key2WOZ <- low importance Cost Key2BAG DIS Key2Financien Suite4Werk Suite4Zorg Burgerzaken Conductor Added Value Not OK: large <- low high -> applications high cost Classification: Restricted (V2)

Centric perspective OK: modern applications in upper right corner Investment low -> eDienstenSD Motion Conductor Suite4Inkomen Key2WOZ Key2Zaken Key2Financien DIS Suite4Werk Suite4Jeugdzorg Portaal Leefomgeving DEM Motion PAY Non Profit Suite4Zorg Document Creation Key2Betalen <- high Burgerzaken Key2Belastingen Key2BAG Motion Pay Added Value <- low high -> Not OK: most applications high cost Classification: Restricted (V2)

INTERMEZZO – WORKSHOP • Work in small groups – 10 minutes • The situation: we need 20 men year for removing technical debt, but we got a RFP from important customer, requiring a change of 7 men year, delivery time 1 year. Team size is 8 including product manager and developers. You can’t do both. • Decide what you would do and why: – Ignore RFP and start renewal? • or – Ignore technical debt and deliver to customer? Classification: Restricted (V2)

WORKSHOP: DISCUSSION • What is your choice? Why? Classification: Restricted (V2)

WORKSHOP • After 1 month a new RFP comes in • What would be your choice? • Does it differ from first? Classification: Restricted (V2)

TAKEAWAY • Men year to rebuild: thousands – (it is a measure, to know the size of our portfolio) – Portfolio in transition to Software-as-a-Service – Renewal programs are underway – Getting grip on quality is very important • Maximum project size in our experience: 30 MY Classification: Restricted (V2)

EXAMPLE TAX SOFTWARE TRANSITION TO SAAS Classification: Restricted (V2)

KEY2BELASTINGEN IN FIGURES DB Inputs Outputs Selections Object # Forms 1.578 1.578 1.578 Batches 465 465 465 Workflows 141 141 Letters 71 71 Scripts 232 232 Reports 489 489 Database procedures 5.929 Managestabels (*1) 2.401 2.401 Total 11.306 2.401 2.043 838 2.138 Points per function 7 4 5 4 Total no FP 16.807 8.172 4.190 8.552 Total 37.721 • • Estimation 37.721 FP 30 developers • 332 men year • Value 37 Miljoen Classification: Restricted (V2)

CHALLENGE IS BIG • Competitiveness declining • Complexity increasing • Technology is old • But still functional very fit: best in class, to be honest • How to convince the board about an approach? Classification: Restricted (V2)

BUSINESS CASE LOGIC FOR A BOSS • This will always work – Lower cost, higher turnover • But how?? • Another trick – We will completely rebuild to new modern application • But what is the cost? How long will it take? • Remember: >300 men year • So we need to play the technology card – We do some magic – Which will lower cost and increase turnover • How?? TITLE PRESENTATION March 25, 2019 Classification: Restricted (V2)

BUSINESS CASE LOGIC Higher productivity Smaller Less Lower cost applications management Less software Less bugs Customer retention Modern Webbased UI Increasing applications turnover New business 3 tier model SaaS ready (REST API) TITLE PRESENTATION March 25, 2019 Classification: Restricted (V2)

REDUCTION • Removing duplication from 33 modules to 21 components is 37% decrease of software volume TITLE PRESENTATION March 25, 2019 Classification: Restricted (V2)

MINIMIZE IMPACT Data Ma- LV K2DDS kelaar Major change Minor change Subject Adres No change K2 Baker K2B GISVG Park- Cipal ware eren March 25, 2019 Classification: Restricted (V2)

COST REDUCTION Cost reduction 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Maintenance % - - 4% 8% 12% 16% 19% 23% 27% 31% 35% Maintenance K€ 100 300 400 500 700 700 900 1000 1000 Cumulative 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Spending 200 800 900 400 400 Reduction OH 100 300 400 500 700 700 900 1000 1000 Total cash flow -200 -800 -800 -100 0 500 700 700 900 1000 1000 Cumulative -200 -1000 -1600 -900 -100 500 1200 1400 2300 3300 4300 • Cost reduction up to 35% in 2026 • Break-even point 2021 • Netto Present Value 1.329 • Note: not real figures, but same order TITLE PRESENTATION March 25, 2019 Classification: Restricted (V2)

FROM TECHNICAL DEBT TO UP-TO-DATE 25-03-19 Classification: Restricted (V2)

RENEWAL PROJECT • Example department – Human Resource & Payroll Solutions (HRPS) Classification: Restricted (V2)

CHALLENGE IN 2012 • Centric is a company of many acquired organizations • HRPS is a merger of 3 companies – 120 employees • For HR and Payrolling each 3 applications + selfservice portal – Interlinked – Markets: profit and non-profit YouPP – HR products licensed – Payrolling: software as a service • Organization sub-optimal PIMS @all PMvdO PersMaster – 6 product management groups • Overall competitiveness declining – But still profitable! PASO LPS PayMaster Classification: Restricted (V2)

CHALLENGE IN 2012 Renewed software Cost per unit Cost reduction goal 2012 2016 2018 Classification: Restricted (V2)

OVERALL PLAN • One product line for HR and Payrolling • Delivered as Software-as-a-Service (SaaS) • Self-service for employees (ESS), managers (MSS) • Deliver first MVP in 2016 • But how? And what would be the cost and lead time? • Approach – Part 1: Decision scenario for upgrading HR systems – Part 2: Decision on what payrolling system should remain Classification: Restricted (V2)

ESTIMATIONS NOTES • Estimations are lean & mean – If something already works, do not change it – When developing to bridge functional differences, rebuild it “as is” and not “fancier” • The team that has to develop the new functionality made the estimation • All estimations are high level effort estimations, not a planning – Does not include project overhead – Does not include the performing of the conversions TITLE PRESENTATION March 25, 2019 Classification: Restricted (V2)