NOA Outsourced Applications Management Special Interest Group
Following on from the last Outsourced Applications Management SIG in 2012, this event focused on the rapidly changing application landscape, and how technology modernisation is shaping the way businesses are employing application integration to drive savings and efficiencies.
The 4th Outsourced Applications Management SIG was chaired by Andy Rogers of the NOA Council, Ivar Sinka, Principal at Capgemini, Steve Howes Managing Director of RSP, ATOC and Sinead Lynch Senior Associate at CMS Cameron McKenna.
Ivar Sinka of Capgemini opened up the presentations, introducing his talk on ‘Application landscape modernisation’ by describing the long history of application deployment and management up to the present day, describing how modernisation has allowed a greater range of businesses to take advantage of services, that had in the past been limited by traditional approaches, to a small percentage of businesses.
The presentation entitled ‘Modernising RSP services’ by Steve Howes, Managing Director Rail Settlement Plan (RSP), ATOC (Association of Train Operating Companies), focused on transiting the outsourcing contracting model from BPO to an applications management service. Steve described how ATOC followed a similar process to the public sector in moving from BPO, to decide on the different available options, including IAAS or PAAS, or to outsource application management.
Steve described the main triggers for ATOS’ move to a service based on application management as:
1.Cost
2.Speed
3.Control
While application management delivers significant advantages, the committee highlighted how governance must avoid the obstacles of the service. Ivar described the inefficiencies and obstacles that are frequently impact on application contracts, including the tendency to artificially place a division between the development and lifecycle of applications.
The impact of out-dated applications
With the long history of application development and use, the market while rapidly developing, is not new. In many cases systems are already mature, with enterprise clouds having now been around for a number of years. Ivar described how a growing problem at enterprise level is the use of outdated software, saying: “applications are being continued to be used well after their sell buy-date”.
As applications and IT services as a whole become increasingly flexible allowing for an agile approach. Old out-dated applications are in-turn becoming increasingly limiting, threating to make modernisation difficult the older the system becomes, as it is made incompatible with new technologies.
Ivar discussed the growing shift in application control, with cloud frameworks now moving from being controlled by IT departments to being delivered based on a corporate focused perspective. Ivar described the changing landscape with 60 percent of decisions on where the cloud should be employed now being taken based on corporate strategy. The shift shows that the business benefits of the cloud are now being realised at a management level, as users increasingly look to move away from in-house IT, and instead turn towards a buy-as-a-service model.
The steering committee in sharing experiences of the dangers of out-dated services, heard an example of a 23 year old system used by a well-known retailer. The architects of the archaic system who understood its unique operation at a core level wanted to retire, while the retailer wanted to expand into Europe. In failing to update the system over such a protracted period of time, the company was forced to employ specialist’s business analysts who then unpicked code allowing the outdated system to be outsourced and in the process updated.
The importance of integration
The common practice of acquiring new technological and application systems suggests that there is a lack of integration. Entire services are being scrapped and replaced, or being duplicated with new services, rather than finding alternative options, waste is being generated from a lack of effective integration.
With an expanding market leading to a wider portfolio of applications and services becoming available to businesses, Ivar highlighted the increasing necessity of integrating and rationalising services. The high cost of integration with future and existing service architecture, represented biggest challenge for users in a recent study by KPMG on cloud adoption.
Businesses need to develop a governance model that promotes flexibility and agility to ensure that systems which involve multiple forms of applications, tools and processes, which can often change, are effectively managed.
It is important that users understand the fine line between application integration and avoiding waste through needless new application acquisitions, and how cancellation can be vital in allowing for modernisation, cost and security. It is here that rationalisation comes to the forefront of any decision making process. More than 80 percent of IT executives said that they were in need of such rationalisation in a recent Capgemini survey.
Ivar discussed the growing shift in cloud control, now moving from being controlled by IT departments to being delivered through a corporate focused perspective. Ivar described how the landscape is changing with 60 percent of decisions on where the cloud should be employed, now being taken based on corporate strategy. The shift shows that the business benefits of the cloud are now being realised at a management level, as users increasingly look to move away from in-house IT, and instead turn towards a buy-as-a-service model.
Regulatory awareness
Users must be aware of the different form of regulation which surround application services, issues of compliance and how business partners intact with applications and shared services. As technological developments become part and parcel of businesses business law has come to reflect this. Developments such as cloud have been impacted by the need for data regulation and security. With ATOS’ move to application management issues such as data regulation were a less of an issue based on the choice for the geographic location of the stored data, with datacentres being situated in Ireland under EU law, while the data itself was not highly sensitive by only recording select information and avoiding blanket coverage.
Adrian Quayle of the NOA, described during a roundtable discussion, how data from applications is often requested as a viewable metric item by customers, wishing to understand how information retaining to them is processed. This is a request that is similarly made by business partners. Users need to understand the value of analytical capabilities in applications management and how control and analysis of in-house IT differs from remote services.
Sinead Lynch, Senior Associate at CMS Cameron McKenna, discussed the final hurdles of application contracts in: ‘The legal perspective’. Users of application management must have the foresight to address the exit phase, with clear principals and an exit plan that is maintained through the applications lifecycle. Key staff need to be involved at this stage, mirroring the beginning stages in having the relevant staff. Adrian Quayle, said: “There’s often a focus on the success of a project, while avoiding the thought of the end, failure or change of provider.”
Project management needs to include consistent meetings during a contracts lifecycle, alongside an individual who has final responsibility for the end phase throughout the whole of the contract.
In a fast moving IT environment, application management needs to abreast of the many obstacles that can potential de-rail a contract, in order to reap the rewards of a service that offers unparalleled cost-value, with increased agility and speed. Between the steering committee speakers the roundtable was presented with the key methods to ensuring good governance continues to deliver a modern and constant service from application management.
NOA Special Interest Group: Outsourcing Works in BFSI