Results-driven application services outsourcing - Part one

Monday March 03, 2008 - 12pm ET / By Softtek


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  • The stages of application maintenance and support outsourcing
  • The status quo is a deterrent for evolution
  • Fear of releasing control, a strong inhibitor of mature engagements
  • Apparent lack of incentives as a roadblock for innovation
  • FUD – Fear, Uncertainty and Doubt
  • Summary


Application service outsourcing is on the raise. As portfolios become more complex, and both buyers and providers become more mature, different sourcing options become available for hiring managers. Although we have seen that while the option of choice for most hiring managers is still that of time and materials, there is a trend for a more strategic and disciplined approach for application services outsourcing, in which clients are increasingly interested in paying for deliverables rather than man-hours.

Outsourcing of application-related services can be divided into two big buckets: The first would encompass new application development, implementation and roll-out; the second bucket corresponds to ongoing application operation and maintenance. In this paper, we‘ll focus on the latter: Application Maintenance and Support services or AMS, which along with license upgrades, represent on average 67% of the total applications budget.

AMS services encompass aspects like production support, maintenance & enhancement, business support and service management. We’ll analyze different delivery models; establish comparisons between one another and, finally, we’ll outline what we envision will be the future of IT service delivery based on past experiences and current trends.

This document describes different engagement models, as well as the barriers organizations face to move beyond staff augmentation models. The second paper of this series will focus on the recommendations to successfully overcome those barriers, as well as an outline of the evolution of AMS outsourcing models

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