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Applications outsourcing as a means to achieving transformation Aprajita Sharma Research Manager, Outsourcing & BPO IDC Australia
www.idc.com Applications outsourcing as a means to achieving transformation Aprajita Sharma Program Manager IT Services/Outsourcing
© IDC, 2008 Agenda Overall Market Trends AM Services Value Pyramid AO as a means to achieving transformation
© IDC, 2008 OVERVIEW OF MARKET TRENDS
© IDC, 2008 Discrete vs. Bundled AM Services Domestic Service Provider Delivered Onshore Domestic Service Provider Delivered Offshore Offshore Service Provider Delivered Onshore Australia Application Management Services Spending Discrete AM Services AMS Embedded in ISO Contracts AMS Embedded in BPO Contracts Sourcing Model Offshore Service Provider Delivered Offshore Covered in IDC AM Services forecast
© IDC, 2008 Competitive Analysis Australia Leadership Grid For Offshore Applications Management
© IDC, 2008 AM SERVICES VALUE PYRAMID
© IDC, 2008 The AM Services Value Pyramid End-User Support Reactive Application Maintenance Proactive Application Enhancements Legacy Modernisation Remote Server Monitoring Day-to-Day Operational Responsibility Portfolio Optimisation Trans- formation “Supporting User & Code” Low-end, delivered offshore “Enhancing the Code” Adding value to individual apps. “True Application Management” Operational knowledge & responsibility “Partners for Transformation” Combination of business strategy with application portfolio optimisation and transformation Customer Business Value
© IDC, 2008 Role Of A Partner In Sustaining Application Investments
© IDC, 2008 AO as a means to achieving transformation
© IDC, 2008 AO as a means to achieve transformation Enhanced overall enterprise functionality and efficiency Fixed Costs and Variable Payment Methods Guaranteed SLAs Continued access to skilled IT personnel Reducing the cost of maintaining and upgrading infrastructure Increasing Customer Satisfaction Mitigated Risk Enhanced overall enterprise functionality and efficiency Fixed Costs and Variable Payment Methods Guaranteed SLAs Continued access to skilled IT personnel Reducing the cost of maintaining and upgrading infrastructure Increasing Customer Satisfaction Mitigated Risk
© IDC, 2008 Partnering – Complexity V/s Potential Savings High Low High Implementation Complexity Savings Staff Augmentation Co-Sourcing Transformation and APM Skilled Resources are provided by partner on demand Partners co-develop future state sharing cost and Risk Partners performs the transformation and assumes risk Note: Using these base structures organisations may adopt one or more to meet specific requirements 30-40% reduction in product deployment time 40% faster systems implementation Improved faster conversion or consolidation of acquired assets (30-60% in time, 30% of costs)
© IDC, 2008 What is the roadmap going forward? Managing a larger portion of the application portfolio Integrating services, such as portfolio optimisation, process reengineering Transforming environment to Dynamic IT Embracing new delivery models such as hosted AM Building and managing SOAs Synergising AO and BPO services New strategies as a result of application vendor consolidation Managing a larger portion of the application portfolio Integrating services, such as portfolio optimisation, process reengineering Transforming environment to Dynamic IT Embracing new delivery models such as hosted AM Building and managing SOAs Synergising AO and BPO services New strategies as a result of application vendor consolidation
© IDC, 2008 Essential Guidance Move up the value chain by looking at application from a portfolio perspective: self-funding transformation Embrace packaged application services while maintaining increasingly valuable legacy skillsets (are there any COBOL majors out there?) Think strategically about global sourcing Use project-based transformation services to start with- Transformation is difficult!! Invest in Hosted AM Stop any investments not aligned to the vision !! Move up the value chain by looking at application from a portfolio perspective: self-funding transformation Embrace packaged application services while maintaining increasingly valuable legacy skillsets (are there any COBOL majors out there?) Think strategically about global sourcing Use project-based transformation services to start with- Transformation is difficult!! Invest in Hosted AM Stop any investments not aligned to the vision !! Its an evolution not a revolution!!!
© IDC, 2008 Please email me at email@example.com Questions?
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