Want to cut costs by more than 50%?

Optimising application development and maintenance (ADM) can slash operation costs by more than 50%, according to research by Gartner.

A new study found that by allowing sourcing managers to develop and implement sourcing strategies, metrics and processes can help CIO’s cut costs in half by eliminating legacy applications, complex architectures and outdated approaches to staffing.

Accounting for 34% of IT budgets, ADM is only set to rise in the coming months due to rising labour costs and increasing complexity and number of applications. However, the study stated that if best practices across the application life cycle are followed, the ADM unit cost can be significantly optimised over time.

Sadly though, it seems that only 11% of companies are mastering sourcing by taking a methodical approach. Others rely on tendering their requirements to a few known service providers and chose the supplier based on price and daily rates. Most are also using staff augmentation for ADM work inefficiently.

Key recommendations made by Gartner the help CIO’s cut costs by optimising ADM included performing an application portfolio and life cycle activity analysis to consolidate ADM supplies to enable companies to select the best-in-class options for scope and business process. It also recommended that using the right metrics to size application portfolio and development efforts would help determine the right ADM team size – Gilbert van der Heiden of Gartner 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.”