IDC extols benefits of application outsourcing model
Corporations could avoid the pain and cost of application deployment and management by using an outsourcing partner.
Companies searching for efficient, cost effective and speedy software implementations should consider application outsourcing. According to IDC, system dynamics models clearly illustrate the time, cost and risk benefits of outsourced application deployment and operation.
“While IDC research has already shown that application outsourcing can yield a positive return on investment (ROI), the models in this new study help demonstrate that productivity improvements and risk reduction are also key benefits,” says Amy Mizoras, program manager for IDC’s software business model research.
“According to this study, most of the advantages of application outsourcing come from the service provider’s superior experience with the application,” she adds.
In-house software projects are commonly at the mercy of what IDC calls workforce and rework dynamics, which can drive projects off schedule and over budget. Although processes such as hiring and training add to the capability of an organisation over time, experienced workers must divert their time from their work, reducing productivity.
With application outsourcing, the outsourcer takes on the risk and cost of bringing people onto the project, hence buffering the customers from risk.
However, IDC urges caution when selecting a third party application outsourcer. It is important that the outsourcer be an application expert for the initiative to be successful. Also, company size, implementation approach and generic application type will also impact on the success of the outsourcing initiative.