Commerzbank, one of Germany's biggest banks, runs more than a thousand applications relevant to its business. To figure out whether the bank's IT complexity is improving or getting worse, CIO Peter Leukert developed an IT complexity model with the help of consulting firm Capco Partners. To benchmark the bank's complexity against other financial institutions, Leukert and Capco are getting other banks involved, reports John Dix at Network World.

IT complexity drives higher costs, reduce flexibility and reduce stability. It is a challenging problem because it involves interactions among many components and it is very hard to localize, Leukert said in an interview with Dix. What's more, it can't easily be measured, which is why Leukert began building a complexity model three years ago.

Commerzbank has consolidated its network and data centers, and has consolidated applications where it makes sense. The model, which looks only at application complexity, helps a company "get the biggest bang for the buck," Leukert said.

"It can give you an indicator that says, 'Look, if you do it this way, it might be better in the short term, you might have a slightly faster time to market or a slightly lower administration cost, but beware, the long-term impact in terms of complexity is huge, and that will in the end translate into more long-term cost and reduced flexibility,'" he said.

The model alone doesn't provide all the information necessary to make decisions about IT projects. Instead, it provides insight on how the increasing complexity of a potential project would stack up against its value, quantifying information that previously was discussed qualitatively, Leukert said. It also offers perspective on whether the risk involved in a large-scale project would outweigh the benefit.

Right now, Leukert is using the model to help determine the best strategy for consolidating seven different customer master data systems. One option is to move all of the data into a new system, and another is to take a couple of the existing systems and build upon them. "Complexity is a very important guideline in making this decision because it really gives you insights into how different they are, the effects in the core domain of customer master data itself and also the effects on the overall application landscape because of all the apps consuming master data," Leukert noted.

Using the complexity model, the bank is leaning toward the evolutionary option. Without the model, it likely would have chosen another route. "We looked at the question a couple of years ago and at that point we actually thought the only way to solve the problem would be the greenfield approach. We thought the other way would not really solve the problem, and by having looked at the complexity levels, we see this is a very valid alternative," Leukert said.

For more:
- see John Dix's article at Network World

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