Strategies for Application Management Services

Over the past ten years we have witnessed powerful advances in the professionalization of IT management. Today, especially the standardization and virtualization of the IT infrastructure and the subsequent market growth of mature service providers enable organizations to access flexible services of higher quality and reliability at lower cost. Nevertheless, even greater potential is seen in the professionalization of application management. As companies permanently need to adapt business processes, their IT organizations are facing an overwhelming demand to build new applications and to restructure their application landscapes. At the same time they are restrained by the increasing cost of support for legacy technologies. Many IT departments are already expected to achieve operational costs savings and efficiency gains continually. On top of that, innovation driven by IT is a necessity for the majority of organizations today. CIOs have therefore found their ways to focus their valuable human resources on core competencies of their organization and remove commodities and outdated systems from their portfolio. Our study shows that apart from fostering efficient structures in-house, companies are applying a wide variety of sourcing approaches to achieve changes at a faster rate and maintain flexibility.Within this study we have collected strategies for application management from 37 multinational companies in diverse industries with headquarters in Germany or Switzerland and with revenues from approximately 0.1 to more than 100 billion Euros. If your company is currently planning or undertaking activities to consolidate, modernize or outsource parts of its application management or portfolio, this study may offer you helpful answers and guidelines deduced from insights of the participating companies. The research was conducted by a senior research team at the chair of Prof. Dr. Walter Brenner (Institute of Information Management, University of St.Gallen), in cooperation with Navisco AG - Sourcing Professionals. The research project was funded with the financial support of Hewlett-Packard.