Large organisations often accumulate a great number of different applications over the years. Some of these will be around for a long time, becoming old or even obsolete. Managing these legacy applications can be a significant drain on the resources of the company.
Applications based on outdated technology are often unnecessarily complex by today’s standards. They frequently lack compatibility with other systems, are vulnerable to cyberattacks and may use outdated programming languages. Changes to the code can be equivalent to opening a Pandora’s box full of surprises. As a result, these systems require substantial management resource, which may be out of proportion to the results achieved.
CIOs often spend half their time managing legacy systems. This is time that could be spent modernising the organisation and working on strategic objectives. The outdated technology gets in the way of the company moving forward.
Outsourcing app management
The outsourcing of these services enables CIOs to take a more strategic role. In 2017, the global market for Applications Management and Outsourcing (AMO) was valued at $56bn and is expected to reach $87bn by 2025.
This development is driven by companies’ need to align legacy systems with the evolving business structure. Over the coming years, developments such as cloud migration, mobility, social tools and integrated platform-as-a-service offerings will have significant impact on the service delivery model.
Additionally, an increasing number of small and medium businesses are now using enterprise apps, such as customer relationship management (CRM), enterprise resource planning (ERP), and human resource management (HRM) services. For instance, the global CRM market rose by 29 percent between 2017 and 2018. ERP and HRM, meanwhile, are growing by more than 10 percent annually.
These enterprise apps are added to an already complex web of software. In this environ-ment, organisations need an AMO provider that can help manage apps while also understanding and supporting the goals that the company is trying to reach over the longer term.
Organisations need to use the latest technologies and automated tools to achieve efficiency and predictability. This requires progressive thinking, including in the way that legacy apps are managed. These cannot be approached with a legacy mindset.
Managing legacy applications can be a complex process. The transition phase needs to be handled by specialist transition managers who understand the complex interplay between business & technology. The transition manager oversees the knowledge acquisition phase end-to-end and ensures that all dependencies are correctly articulated and managed to ensure that the goals are realised as the transition project progresses.
This is the way NTT DATA handles transition management. It is one of the main reasons why the company’s transition success rate is close to 99 percent, compared to an industry average success rate of 66 percent.
NTT DATA has developed the Dynamic Applications Management & Outsourcing (DynAMO) ap-proach, which enables transformation by improving the service levels of current applications and readying them for re-engineering, retirement or migration whilst also reducing costs.
This approach was used with an accountancy body that was seeking to improve and simplify its IT services. Finance applications were responsible for around 30% of support costs, due to unsynchro-nized data, inefficient legacy systems and high costs for making changes. By centralising these ap-plications onto a single platform, NTT DATA cut costs by nearly half a million pounds per year, while also improving customer service.
As this example shows, application lifecycle management is crucial to any organisation aiming to run an efficient IT department. Cooperation with a partner that has a continuous improvement mind-set enables the CIO to focus on strategy and moving the company in the direction it wants to go.