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Enhanced app development 'can cut costs by 50%'

Insight | ADM | Operation costs | Application development

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Optimising the way businesses conduct their application development and maintenance (ADM) strategies could help them slash their operation costs. 

A new study by consultancy firm Gartner found organisations might be able to save more than 50 per cent by doing this. It advised IT managers could reduce their expenditure by upgrading legacy applications and changing outdated approaches to staffing.

The report showed ADM accounted for around 34 per cent of a company's computing budget, yet many businesses believe this will continue to grow over the coming years, due to factors such as the rising cost of labour. However, Gartner claimed this was not necessarily the case, as long as firms followed best practices throughout the application and sourcing life cycle. 

According to the study, most companies secure their apps tactically, by asking several known service providers to compete for their work in terms of price and daily rates. Only 11 per cent of organisations were said to master source their programs, while many are ineffectively using staff augmentation to manage their ADM strategies.

In order to get the most out of their applications, Gartner recommended businesses should set out best practice contracts, while coming up with a set of key performance indicators to make sure their operations are performing well. In addition, they were advised to implement an analysis of their app portfolio and life cycle to be able to recognise the amount of effort needed to efficiently conduct their strategies.

Gilbert van der Heiden, research vice-president at the consultancy firm, commented: "Whatever model an organisation uses, it should be applied consistently and as objectively as possible, with a focus on measuring and improving productivity and quality. The more comparable the data than an organisation applies to the model, the better it can benchmark the results."

He also stated businesses should perform a proper analysis of their application portfolio to determine the most suitable method of sourcing new apps for each area of their operations. Firms adopting this strategy, he said, would be more likely to witness a reduction in costs and an improvement in effectiveness.

 


Posted by Jon Aspinell on 22nd April 2014

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