Moving mission-critical application management offshore ("How-to" advice from Computerworld)

Computerworld | September 4, 2003 | James Brewer

[Mini-14]

Most companies have a number of application systems that are core to critical business operations such as finance, marketing, human resources and sales.

These applications are generally first- or second-generation systems that have been developed and enhanced over the years. Industry experts say close to 75% of IT budgets are eaten up by supporting existing applications, which draw funds and resources that could be spent on higher value-producing opportunities.

Besides being expensive to maintain, legacy applications have quality problems. Since they're required to run the business, defects, outages and other productivity drains can have a drastic impact. Maintaining quality becomes a greater issue over time as perhaps hundreds of changes are made to applications over their life cycles to customize them and respond to new business needs and technology advances.

Because of the importance of these applications, companies have traditionally kept maintenance work on-site or close to home in an effort to ensure control and accountability.

This results in a missed opportunity. Although many companies leverage outsourcing for new application system projects, few are aware of the benefits of using offshore outsourcing for application management.

The benefits include annual savings of 30% to 50%. In addition, companies gain round-the-clock coverage that allows for more rapid turnaround and free up internal IT employees for other projects.

However, it doesn't make sense to move the entire application management process offshore.

Which applications are right for offshore?

Activities that involve intense day-to-day user interaction -- for example, Level 1 help desk support and interaction with the functional owner of each application -- should remain close to the user base, either on-site, off-site or near-shore.

	James Brewer is vice president of global services delivery at Keane Inc. He has 18 years of experience in the IT industry. He studied IT at the Computer Learning Center of Virginia and Northern Virginia Community College, with a focus on accounting and business, and is a member of the Association of Information Technology Professionals.

But Level 2 (issue analysis and resolution) and Level 3 (code changes) support activities don't generally require instant interaction with users. In fact, they are best performed by individuals who are dedicated to these tasks and not distracted by the interruptions that occur in the daily user work environment.

With this as a foundation for decision-making, it's necessary to review the application portfolio to determine which applications would gain the most from migrating Level 2 and Level 3 support offshore.

Look at each application and ask the following questions: Is it a mature application? Was it custom-developed? Does maintenance account for a significant portion of its IT costs? Is working on it considered a less desirable assignment for IT staffers? Answering yes indicates that the application is a good candidate for outsourcing.

Once the pool of potential applications has been identified, prioritize those that will produce the greatest return through outsourcing. The best candidates are those that meet the following criteria:

• A high number of resources and a high percentage of IT budget are dedicated to their maintenance.
• They have recurring problems that aren't alleviated by quick fixes, indicating the need for root-cause analysis.
• They have a significant or growing backlog of application issues or enhancement requests.
• They have a high or growing number of user-reported help desk issues that are the result of missing or misleading documentation.
• Their existing support is of poor quality and/or has low user satisfaction.
• In-depth application knowledge resides with a limited number of employees.
• There are plans to retire or migrate the applications within two to five years.

Building the right offshore partnership

Historically, most offshore IT outsourcing firms have focused on new development projects. The offshore option in the IT services industry came into its own during the 1990s, when Y2k remediation and new development projects took center stage.

Application development and rapid delivery of new systems are relatively freestanding efforts with few day-to-day emergencies. In contrast, mission-critical application management demands a constant sense of urgency to keep systems functioning at the highest level. Maintenance of these applications, though not one of the more glamorous jobs in IT, is one of the most challenging.

So it's critical to assess an offshore provider's capabilities in mission-critical application management. These capabilities include the correct team structure, objectives, methodologies, metrics and mind-set that are tuned to this specific task.

Look at the company's track record for maintenance and support. And check with current clients to see if the company consistently meets established service levels.

The potential to save 30% to 50% on annual maintenance costs for mission-critical application systems is compelling in any economic environment. When combined with the opportunity to improve the quality of support for mission-critical systems, this savings potential makes offshore outsourcing a viable option for certain applications

[Mini-14]

	Keane to provide offshore development services to Descartes Systems Group. See press release for details.
	Brian Keane to present at SG Cowen Fall Technology Conference on September 3rd at 3pm. Click here for webcast of this presentation.
	Keane's healthcare vertical expertise expands with Healthcare Solutions Division's increased presence in long-term care market. See press release for details.
	Keane releases Second Quarter Financial results. See press release for details and conference call information
	Quality milestone for Keane, as Executive Office of the United States Attorneys engagement becomes 44th project independently assessed at Level 3 on SEI CMM. See press release for details.

[Mini-14]

Computerworld is now pimping for companies who intentionally put Americans out of work.

[Luke Skyfreeper]

Gee thanks, Computerworld.

I wish I were a subscriber, so I could cancel my subscription.

[ChinaGotTheGoodsOnClinton]

Hey you guys. I know tech sucks right now but there really is something you can do.

Go to WashTech http://www.washtech.org and sign up for thier newsletter.

It will come a couple times a week with links to your Congressmen or Senators with prewritten letters on topics like offshoreing of jobs and H1-B visas.

Best of all it (the newsletter) is free!

Pass it along...

[Reeses]

Since all forms of taxes we pay add up to over 50% of income the government loses more income than the workers do. Plus they have to pay socialist benefits to these non-working Americans, and probably to their children as well upon working age. Does the government realize their loses resulting from this outsourcing trend? They can put a stop to it by saying the government will not do business with any company that transfers jobs overseas. The government needs to act to protect themselves, something they normally do without prompting.

[Poohbah]

It will come a couple times a week with links to your Congressmen or Senators with prewritten letters on topics like offshoreing of jobs and H1-B visas.

You know what Congresscritters and Senators do with prewritten or form letters?

They ignore them. They know, from experience, that form letter senders vote much less often than those who take the time to write a well-thought-out handwritten letter. Better to sit down and write (with real pen and ink) to your Congresscritter/Senator.

[lelio]

In addition, companies gain round-the-clock coverage that allows for more rapid turnaround and free up internal IT employees for other projects.

Gain round-the-clock coverage for your mission critical apps. That sounds good in theory. In practice you're going to hand over what runs your company to someone that doesn't know the ins and outs of it? Is that really wise?

Plus this is sweeping the problem under the rug. If your legacy apps are expensive to maintain, doesn't that tell you something? Its like saying that you're saving money by taking your car with a shot engine to a cheaper mechanic, when you should really get a new car that runs.

[Gee Wally]

But Level 2 (issue analysis and resolution) and Level 3 (code changes) support activities don't generally require instant interaction with users. In fact, they are best performed by individuals who are dedicated to these tasks and not distracted by the interruptions that occur in the daily user work environment.

I disagree with this approach. If the programmers don't have contact with the end-users, they don't get to see how users interact with the programs and the tasks they are performing. IMO, it is an academic exercise for the programmers and a source of frustration for the end-users.

[WilliamofCarmichael]

Changes to big iron apps that date back to COBOL 74 plus young programmers more turned on by GUI plus no legacy knowledge equals ripple effects requiring changes to big iron apps. . . .

It's an old idea but it just might work. :)

[ex-snook]

" If the programmers don't have contact with the end-users, they don't get to see how users interact with the programs and the tasks they are performing."

Systems analysts did that in my era. But that was in the days prior to purchased software. Purchased software has negated the interaction need for good.