Application Landscape in 2018: “Finding a Way out of the Baseline Support Quagmire!”

What is the everyday dilemma that faces all IT Managers concerning resources? “Do I put resources on new development or on baseline maintenance?”

That question arises when pressure comes from the business to prioritise resources on new development projects. However, it is often crucial to allocate resources to baseline maintenance, which is needed to reduce the support risk, and provide system stability. Unfortunately this rarely brings any immediate benefit to the front line! In our endeavour to deliver a risk free infrastructure landscape, more time is invariably needed on baseline maintenance upgrades.

Insurers, for example, are looking to develop new products and systems more than ever but as an inherently cautious market they need to deliver continued stability to their clients. Is it possible to achieve significant transformation, improving platform resiliency while completing a massive data centre move, cloud migration, and hardware overhaul, for example? The answer is yes but strong foundations need to be in place for a new focus on digital strategies, innovation, and product development.

It is important to CIOs when you consider that the spending forecast of information technology (IT) support services worldwide from 2017 to 2020 (in billion U.S. dollars) is expected to grow from $164bn to $172bn.

As we all know, however, there is no simple answer, and as in life, it is always about balance and compromise. But, how can we move forward out of this IT support/delivery circle, and what options are available to maximise resources?

1. “Bite size deliverables” It is impossible to try to fix/deliver everything at once, or move forward with 10 different initiatives at the same time and expect them to all come together simultaneously. The way forward is to start with smaller deliverables that are needed to create a foundation point, on which to move forward. This could be by correcting the underlying data or system that is exacerbating a problem, or by removing duplicate databases or systems, that make upgrades & support complex and time consuming, or maybe by implementing a new system that will replace many systems, thus simplifying the underlying landscape.

2. “Follow a Process” If there is no process or procedure for change management, there will be constant pressure for resources to be pulled in different directions, whilst achieving very little. Whilst it is easy to become process heavy, it is crucial to have a formal Production Release and Change Management Process. Production releases should be scheduled well in advance to open up more availability for both Business and IT testing resources time. With regard to testing, it is important to only complete the appropriate level of testing. This can be either minimal, or comprehensive depending on the complexity of the release. We should not strive to be “risk free”, but to actively assess the risk, and make a decision accordingly.

The Change Management and Prioritisation Process, must involve the business stakeholders, Senior Management Team as well as IT. IT should articulate to the business the level of risk incurred if maintenance work is not completed, but should also be able to accept that it is the business that drives revenue and therefore there should always be respectful understanding and compromise across all participants.

3. “Outsourcing” Is where you transfer responsibility for the support and maintenance of one or many applications to a service provider, either located onshore or offshore. This is not the panacea to all problems, and the type of outsourcing depends on a number of different factors, such as, the complexity of a company's application landscape, the IT resources and their knowledge & the business plan for IT. However, it can alleviate resourcing issues especially when there is a limited budget available or where there is an application support risk.

Benefits:-
● Can pass responsibility direct to the Service Provider for meeting SLA’s
● Reducing Baseline Support Cost
● Releasing internal resources for other work
● Opportunity to reduce internal staff headcount
● Improving application support resilience & risk reduction
● Would provide system documentation that may not otherwise be available
● Offshore resources have a significantly cheaper daily rate, which can be advantageous when needing to deliver application enhancements
● Can be implemented in the event of multiple staff resignation
Disadvantages
● Loss of application knowledge by in-house resources
● Costs can increase over time, if requirements change from the original contract deliverables
● There is limited opportunity to reverse the decision and bring support back in-house
● Moving to alternative Service Providers could be costly
● Service Provider staff rotation can lead to application support knowledge being diluted.

4. “Co-Sourcing” is where your existing internal resources are augmented by resources from a third party service provider, located either offshore or onshore. Co-sourcing will provide additional resources to utilise within the IT department to take over the baseline support tasks, releasing inhouse resources for development projects, or to bring in new resources with skills that are required for new developments.

Benefits:-
● Increases the IT resource headcount by adding offshore resources that have a significantly lower daily rate
● Releasing internal resources for other work, which would then give a reduction in baseline support cost
● Opportunity to reduce internal staff headcount
● Can be implemented in the event of multiple staff resignation
Disadvantages
● Since service provider staff are likely to be managed by an internal manager, it is difficult to pass SLA responsibility to the third party
● If you need to locate service provider resources onshore, this can become more expensive than employing a local contractor directly
● Loss of application knowledge by in-house resources
● Costs can increase over time, if requirements change from the original contract deliverables, or there is a need to move more resources onshore.

All these factors need to be considered, particularly, in light of outsourcing trends forecasts. So why do companies outsource?

Cost, enabling core business functions, and solving capacity issues are primary drivers to outsource, according to a recent report, which revealed that leading practice organizations use outsourcing to drive transformational change and improve business results. According to the report, companies seek innovation from outsourcing agreements, but many are unsure how to define, motivate, and track it.

In response to a survey in the report, respondents outlined their reasons for outsourcing, as follows: Drives Broader Transformational Change (17%); Manages Business Environments (17%); Access to Intellectual Capital (28%); Critical to Business Needs (28%); Enhances Service Quality (31%); Solves Capacity Issues (47%); Enables Focus on Core Business (57%); and Cost Cutting Tool (59%)

Meanwhile, although companies seek innovation from outsourcing agreements, many are unsure how to define, motivate, and track it (65% do not currently measure the value created through innovation).

“Strategy & Plan” It is essential to know where you are going and what you want to achieve. This can be as simple as a list of projects that need to be delivered or as detailed as a document that contains IT industry trends that can be applied to the business and then includes a fully detailed 1,3, and 5 year project delivery plan.

It is important that an IT Strategy Plan is fully supported by the business and is achievable. It is a well-known fact that the success of delivering projects over a 5 year period diminishes year on year.

A new forward looking Gartner report notes predictions with longer time horizons as having a lower probability of coming true than those with shorter time horizons. The report says: “CIOs in end-user organizations will need to develop a pace that can be sustained no matter what the future holds. Our predictions provide insight into that future, but enterprises will still be required to develop a discipline around how pace can be achieved.” Another key point in the report is to bring together representatives from enterprise architecture (EA), strategic planning, executive management and IT to focus on opportunities available as a result of self-disruption. That is for the (admittedly fast approaching future).

For now, where no plan exists, start with what can reasonably get delivered in 12 months. Pick the low hanging fruit by delivering short-term quick wins, and address the immediate issues, particularly if there are issues with underlying data.

Then moving onto the 3-year plan, this should focus on the applications that are part of the future strategic application landscape. It is important during years 2-3 to start to deliver tangible benefits to the business and consideration must be given to make sure that resources and delivery deadlines do not coincide with business peaks.

The 5-year plan will contain longer-term projects that may start with a feasibility study or requirement gathering phase leading to some kind of proof of concept study. It is important for funding approval and business “buy-in” that they can clearly see whether the ultimate deliverable is what the business want.

“Next Step”. Are you looking for ways to improve your baseline support capability, or streamline IT operations? Are you suffering from a shortage of resources to work on strategic projects? Are you are looking for a strategic plan to guide IT over the next 1-3 years? If the answer to any of the above is yes then a Fifth Step QUICKSTART Application Landscape Assessment could be something that, for a minimal outlay, would allow you to set a path for increasing your IT department productivity.
If you would like to learn more about the Fifth Step QUICKSTART Assessment, then please contact us at enquiries@fifthstep.com