Mr. CIO, Are Old Applications Weighing You Down? AMO them

“Outsourcing” is no longer a word that the IT Services industry is waking up to. Businesses, large and mid-sized, have been outsourcing their IT applications to vendors for years now.

This article attempts to define and explain Application Maintenance Outsourcing (AMO) in a nutshell.

Gartner defines AMO as the ongoing maintenance, management, conversion, enhancement and support of an application portfolio by an external company.

In other words, AMO refers to the performance of those activities required to keep a software system operational and responsive after it has been accepted and placed into production. They are a custom-developed set of processes, policies, procedures, standards and templates. To achieve this objective, enterprises are constantly on the lookout for best practices and frameworks for delivering sustained business value and ensuring operational superiority.

AMO can offer greater budget flexibility and control. Outsourcing lets organizations pay for only the services they need, when they need them. It also reduces the need to hire and train specialized staff, brings in fresh engineering expertise, and reduces capital and operating expenses for businesses. The motto for any business with respect to managing their IT applications should be: “Do what I do best and outsource the rest.”

Application Maintenance Outsourcing Service Components

• Application Development – Address evolving business and technology challenges by defining, designing and building new applications tailored to meet your business requirements.
• Application Maintenance and Support Service – Maximize your existing IT applications through ability analysis, maintainability analysis, maintenance, upgrades and enhancement. Offers a wide range of support services for various platforms and technologies.
• Application Modernization – Help modernize legacy systems to enhance flexibility, mitigate risk, minimize disruption and lower costs.
• Packaged Application Services – Help you automate your value chain through off-the-shelf application packages.
• Performance Engineering and Enhancement – Enhances the performance and scalability of applications across the technology and application lifecycle.
• Testing and Validation Services – Creates a Quality Assurance (QA) enterprise through a combination of varied models, offerings to address the changing technology landscape, and new engagement models.
   

Value Proposition:

AMO Optimizes an entire application portfolio with cost reduction typically between 20-30% with improved quality, enhanced governance and use of leading practices to focus on IT initiatives that drive the most business value.

• Enables increased focus on core strategic business issues
• Provides ability to scale and expand the business as needed
• More effectively enables mergers and acquisitions
• Establishes an application platform that supports and drives business process change and flexibility

Key Business Drivers:

• Increasingly complex system environments and adoption of new technology are difficult to manage and maintain
• Difficulty in finding the required skills in the right place at the right time
• High cost of ongoing application management and support
• Limited relevant application and data integration expertise
• Need for an IT platform that better accommodates business change and improves time to market
• Need for improved IT response to marketplace demands

QualifyingQuestions before you decide for AMO:

• Do you need to lower the cost of ongoing application management, maintenance and support?
• Do you need to improve quality of service and overall customer satisfaction?
• Do you have challenges with application and data integration?
• Is you your organization able to accommodate change?
• Are you looking for a governance model that aligns IT activities to business objectives and provides supporting metrics?
• Would you like to move fixed IT support costs to a variable basis?
• Do you need to tie the cost of application management/support to a business metric, to better reflect the value of IT support?
• Are you experiencing production/output/activity variability? Missed or low service levels?
• Are you consolidating, sun setting or transforming applications?

Finally, as businesses continue to look at bringing in more innovations in their client offerings / services, digital, mobile and cloud-based technologies would dominate the global CIOs’ and CEOs’ minds, but they would also look to find ways of removing inefficiencies, automate wherever possible and do selective outsourcing of in-house applications to achieve a perfect blend of Outsourced Vs. In-house IT. A Win Win for all!!