Pressures Faced in it

Developing Applications

• Internal staff already understands legacy applications, time spent transferring that knowledge would eat any potential savings
• New applications are driven by new opportunities that require rapid response, and the internal staff is too busy to provide that response.
• New projects can be started quickly because there is no need to recruit people. This lets the company respond swiftly to unexpected developments with minimal risk.
• If a new application fails to pan out, then the design cost will have been significantly less than in-house.
• If the application bears fruit, then offshore developers are in an ideal position for support, reducing the cost of maintenance.

Efficiency and Effectiveness in the Application Management Environment

• A clear picture of the desired, or ‘target’ application management environment is crucial to understanding the potential business value of outsourcing application management
• Well run environments have:
• User Satisfaction
• Accountability
• Adequate Staffing

Maintenance

• Outsourcing of software life cycle activities is a growing business area
• Lack of planning and high costs of software maintenance invite many organizations to outsource
• Even the most unexpected organizations, such as the US Department of Defense, have decided to outsource significant portions of their Information Systems

Maintenance

• Among the activities that comprise the software life cycle, maintenance is the most costly; estimated at 67-90%
• By not planning for change, companies are faced with higher costs than if they were to imbed that cost in the original development plan

Benefits of Outsourcing Maintenance

• Employees focus on the core business
• Releasing resources for strategic developments
• Decreasing costs
• Increasing productivity