How application development and maintenance has become a loss leader

Few providers and their customers have noticed it, but Application Development and Maintenance (ADM) has become the loss leader in IT Services.

With everyone scrambling for everything digital, enterprises now are focused on how to buy the next generation of technologies, not how to support the last generation. Maintenance was already low on the totem pole and has become highly automatable, but agile, cloud, ready-to-buy platforms and other advances have eroded the status—and the margins—of development. ADM has to be a loss leader now, not only because it is suffering from low demand, but because it is what allows service providers to walk the right customer halls in search of digital opportunities.

Digital initiatives, while highly valuable, tend to be smaller in scale. ISG’s preliminary research shows that about 85 percent of them are under $5 million. Competition to land these deals has heated up, especially with an exploding ecosystem that offers literally thousands of choices beyond the large service providers. Most of the time, enterprises will choose from their existing providers, so being already “in the building” is an enormous advantage when it comes to capturing digital market share.

If you are an enterprise buyer, congratulations! You have a new source of leverage. You should expect that your service providers will automate your ADM portfolio aggressively to lower your costs and free up funding for digital programs. You also should expect those same providers to showcase and demonstrate their digital innovations and investments so you are aware of what they have to offer. But you also must follow through on the promise. If they meet your expectations at streamlining the old portfolio, you should reward them with helping you build the new.

If you are a service provider, your situation is trickier, but the path is still clear, because if you don’t reduce the unit costs of ADM services with disruptive technologies, someone else will—and you will lose that all-important ability to walk the halls. But cannibalizing your own ADM revenue isn’t enough. You must be willing to invest in digital showcases, and be assertive in bringing innovation to your client.

Even more difficult, you must be willing to collaborate with many other technology companies that have built point solutions and/or superior technologies; since many of them are small, you also must know how to find them. Then, you have to figure out a way to make money when, at best, you have a primary orchestration role in a complex digital ecosystem.

And finally, you must re-invent account management to speak to business benefits that appeal to different buyers, while drastically reducing the cost of sales—the old model simply won’t work for these smaller deals. If you do, you will not only replace the revenue forgone in traditional ADM, but you will give yourself opportunities to grow for at least the next decade.

All of this only works if enterprises and their providers have honest, transparent conversations about the future. The temptation to try someone new will be enormous for the buyer, but they shouldn’t discount the institutional knowledge of an existing provider as a benefit; remember most of the barriers to digital transformation are human, not technological.

And providers will have to step up their game—speak to business buyers about business benefits, while taking on some risk and showing they have the digital chops to play outside their old sandbox.

The shifts are subtle, and there’s money involved, but get them right, and together the buyer and seller can build a sustainable digital business relationship.

Source: cio.com-How application development and maintenance has become a loss leader

Advertisements

Global Application Lifecycle Management Market

 

The market study covers the present scenario and growth prospects of the global application lifecycle management market for 2017-2021. The report also lists cloud-based ALM and on-premises ALM as the two major segments based on deployment models. The cloud-based ALM segment accounted for 58% of the market in 2016.

Request a sample report: http://www.technavio.com/request-a-sample?report=57071

Technavio’s sample reports are free of charge and contain multiple sections of the report including the market size and forecast, drivers, challenges, trends, and more.

Technavio ICT analysts highlight the following three market drivers that are contributing to the growth of the global ALM market:

  • Use of ALM provides improved cost saving
  • ALM drives productivity and quicker time to market
  • ALM helps focus on real-time decision-making

Use of ALM provides improved cost saving

ALM helps organizations reduce costs and provide on time services to markets. It also enables the centralized management of project portfolios. Centralization allows organizations to enhance the decision-making process and thereby improve the performance of the organization, eliminate duplication of effort, reduce operating costs, and maintain multiple data centers.

These services also help organizations increase their savings, as it gives the IT managers and chief information officers (CIOs) visibility of application cost and associated support that is required to get back the expected ROI.

According to Amit Sharma, a lead analyst at Technavio for enterprise application research, “ALM makes it possible to track developments in various projects at a rapid pace, which enhances the processing speed and response time. The service can also facilitate rapid identification of issues, which helps organizations avoid redundant or poor IT investments.”

ALM drives productivity and quicker time to market

ALM helps organizations to achieve higher productivity by providing end-to-end performance report. ALM helps speed up the development and test cycles, which helps in quicker time to market. The functions in organizations are fully automated and streamlined when ALM software package is used, resulting in rapid designing, delivering, and deploying of the software.

“Furthermore, ALM helps to centralize the management, attain real-time visibility into the application delivery process, and implement consistent workflows and processes across the application lifecycle, thereby reducing the duplication of effort between projects,” says Amit.

ALM helps focus on real-time decision-making

ALM helps monitor business application management services. It provides flexible, integrated, and real-time decision-makingsupport for those in the top management, which, in turn, helps to improve responsiveness across an organization. Diverse elements of multinational environments, such as language, currency, and accounting standards, are covered in a single application management service.

The service provides for better analysis and planning capabilities. It enables comprehensive and integrated management of related businesses and corresponding data. This integration allows the complete deployment of various kinds of decision-making support systems and project management functions.

Source: businesswire.com-Global Application Lifecycle Management Market

Gartner Positions Infosys as a ‘Leader’ in Magic Quadrant for Oracle Application Services

Infosys (NYSE: INFY), a global leader in consulting, technology, outsourcing and next-generation services today announced that Gartner, Inc. has positioned Infosys as a ‘Leader’ in its Magic Quadrant for Oracle Application Services in Europe, the Middle East and Africa (EMEA) and North America.

The report evaluated 16 vendors in EMEA and 20 in North America for the full-life cycle of Oracle application services, spanning project-based implementations and multiyear application management services (AMS). Gartner analysts evaluated service providers for their ability to deliver a comprehensive set of implementation and management services across the Oracle portfolio of products for EMEA and North American clients. Infosys was positioned highest for its ability to execute in EMEA.

An Oracle Cloud Elite partner, Infosys drives innovation and new opportunities for its clients with next-gen digital technologies so they can achieve higher efficiencies and increased customer engagement.

Quote:

Ravi Kumar, President and Deputy Chief Operating Officer, Infosys

“We believe that being identified as a Leader in Gartner’s Magic Quadrant validates our core strength of delivering value to our customers leveraging our IP and the best-of-breed technology solutions, and our commitment to developing a comprehensive set of Oracle application management services across the Oracle product line. Infosys works closely with Oracle to rethink and redesign application services by incorporating innovation and agility. We are gratified to see Gartner’s recognition of our leading work in this critical area.”

Links:

Gartner’s Magic Quadrant for Oracle Application Service Providers, EMEA

Gartner’s Magic Quadrant for Oracle Application Service Providers, North America

Source: prnewswire.com-Gartner Positions Infosys as a ‘Leader’ in Magic Quadrant for Oracle Application Services

7 Things Startups Should Know About Outsourcing Development

For a startup to get through the teething stage and gain recognization, it must have its own unique system. It must consider as all-important such activities as hiring, training and the outsourcing of development, plus such elements as brand, structure and values.

Along the way, outsourcing is a common practice many startups use to complete these tasks. In fact, I know startup entrepreneurs who outsource virtually every task.

There’s good reason for that: Outsourcing can lead to high levels of productivity at relatively reduced costs. A study by Intetics revealed that outsourcing can save companies 60 percent on overhead costs.

What you outsource depends on the nature of your business and your goals, of course. But you’ve got to approach outsourcing the right way or risk losing money and even putting your business at risk.

For example, you may want to outsource the development of your mobile app, because you don’t have the technical expertise required. Better yet, you may want professionals to handle things at a lower cost so you can focus on a a higher revenue-generating task, such as marketing.

The truth is, you can outsource every aspect of your business if you choose, but considering how vital one aspect — development — is to every startup, you should look particularly closely at the following seven things to know about outsourcing it.

1. Choose the right third party to work with.

Creating a brand that you’ll be proud of requires deliberate efforts. One of the daring steps involved here is deciding who handles your development (e.g., app development). Should you hire an agency or freelancers? Most of the startup entrepreneurs I’ve interacted and worked with prefer working with agencies.

However, if you’re tight on budget (most startups are), seriously consider going to a place like Meetup.com to find a technical co-founder.

Remember that whether you’re going to hire an agency or individual freelancers, there are both pros and cons to each. Conduct your research first.

2. Consider technology standards.

Technology has redefined web and app development, or any type of development for that matter. For this reason, when outsourcing, consider the technology standards you’re using.

As an example, mobile usage has almost drowned desktop usage, with a 58 percent growth rate year over year. If you’re developing a website for your startup, you can’t possibly hire professionals who don’t understand responsive design.

More so, if you plan to generate traffic, leads and customers from search engines, Google expects you to make your web and mobile applications mobile-friendly.

Chaim Sajnovsky, founder at B7Dev.com, suggests that, “Being able to feature up-to-date technologies in your development is critical. Otherwise, your project will be outdated.”

3. Include personalized communication.

Don’t outsource development if there’s no guarantee of a personalized communication. Why? Because sooner or later you’ll encounter technical issues after the project has been completed.

To ensure a seamless communication, be aware of the time-zone difference to help you make smart decisions about when to outsource your services, and whom to put in charge.

If you’re based in California, for example, and you’re in the process of hiring an agency/freelancer in Johannesburg, South Africa, do well to understand when to send emails, put a call across or submit a support ticket.

4. Don’t neglect intellectual property considerations.

What rights do you have on your mobile app properties? I’m not an attorney, but from my personal experience, I’ve found that some legal jurisdictions have little or no regard for intellectual property like software.

It may interest you to know of estimates that say approximately 61 percent of software used in most Asian countries and 58 percent in India are pirated. How many of these crimes have resulted in lawsuits? How many of those lawsuits have been litigated?

That said, when outsourcing developments (web, app, software, etc.), it’s your responsibility to secure your intellectual property against misuse and theft. So, create those limitations by drafting contracts and nondisclosure agreements which the freelancer/agency will be required to sign and adhere to.

As always seek professional legal advice if you have any questions.

5. Consider the unique quality of your software or other product.

There are some delicate developments you should never outsource to a third-party. Why? Because if you’re talking about a key competency — a key product or service that makes the company unique — you don’t want other people to hijack your edge.

This is your company’s “secret sauce,” so trade it with extra care. If you truly want to get the project done, consider hiring an in-house developer to handle it.

You may want to outsource operational products such as reservation systems or process automation, but when it comes to creative products like architectural rendering, chip-design programs or consumer games, don’t reveal the secret. Work on these in-house.

6. Get regular updates on your company’s progress.

You’re in control of your business. So don’t be like all those other CEOs and founders out there who relinquish to a third party 100 percent control of their company’s development. That’s not ideal.

Inasmuch as outsourcing development is important, you need to get regular updates to keep abreast of the behind-the-scene processes.

Don’t be interested in just the end result, such as the functional software, either. Rather, get involved in the ongoing development. Provide ideas, answer questions, give suggestions. You’ll learn a lot more from the processes than from the end result.

If you’re ignorant of software malfunction, or even some minute fact about app development, you may make irrelevant decisions.

7. Get what you pay for.

At any phase of your startup, be careful not to think that getting cheaper services is the best way to go. I know that you want to save money, and that’s important: 46 percent of startups that fail do so because they run out of money. Specifically, not seeing projected ROI is the reason why fully 80 percent fail.

However, you need to keep in mind that you always get what you pay for. That’s a fact of life. And I’m not necessarily suggesting that you should make expensive hires.

The bottom line is, choose freelancers/companies that have the experience, modern tools and right skills required to handle your project. At the worst, pay the industry standard fee when outsourcing developments of your software applications.

Conclusion

In a world where you’re required to be creative, productive and tenacious in order to cut through the noise, consider outsourcing as your master key. If you’ve tried it in the past but didn’t get the results that you wanted, don’t give up.

Use the above seven-item checklist. Of course, you don’t have to implement everything at once, but be disciplined enough to resort to these tips every so often. That way, you’ll be assured that your startup is in good hands when you outsource development.

Source: Entrepreneur-7 Things Startups Should Know About Outsourcing Development

Image credit: Shutterstock

How To Successfully Outsource Software Development (Without Compromising Quality)

Assume your company decides to outsource its software development. Now you’re wondering: Will outsourcing affect the quality? Simply put, the quality of your software depends on the provider you hire. When you choose the right provider, it shows.

In my 30-plus years of IT experience, I’ve seen many companies make the wrong software outsourcing choice. And I’ve watched this cost their software and companies dearly, including time, money, delays, glitches, security issues and other problems. As an example, almost three-quarters of mobile apps ship with as many as 10 bugs, according to the 2015 Mobile Development Survey of more than 500 software developers from Evans Data Corporation. Some estimates go as high as 50 bugs, calling into question some developers effectiveness in testing and quality assurance (QA). So making the right software outsourcing choice is vital.

I’ve found that when you work with a great developer, they not only adhere to standards to ensure quality, they focus on your overall objectives and intended results. Meaning the right team is more thoughtful in its approach versus quickly slapping code together. My recommendation: Never make a decision based on a quick Google search. And don’t simply choose the least expensive developer.

Quality From Experience, QA And Testing

If you decide to outsource, everyone must share the goal of creating high-quality software to grow your company. Ideally, the right vendor or developer will bring vast experience from working on software across different industries. As a recent post from Salesforce says, “Outsource partners can leverage their collective experience to help overcome otherwise difficult challenges. Because they often work with many companies on a variety of projects, outsource partners can quickly interject critical skills and expertise to any product or software development.”

Indeed, outsourced teams use their collective knowledge to solve problems and innovate. In fact, many software outsourcing companies hold regular meetings, where team members share information on what they’re working on – their development successes, challenges and creative solutions. They share these insights and cross-pollinate information that can benefit the quality of each developer’s work. One provider may have 50 to 60 different developers in a meeting, which means you inevitably get all of that experience applied to your software.

Tip: When you interview potential providers — whether that’s an individual developer or an outsourced team — ask them about their portfolio of work and their successes across different markets. Ask for references that can substantiate that work. Ask how they apply those experiences to creating software.

Also, when you’re evaluating your shortlist of outsourcing partners, make sure you evaluate their potential for success – in-person, if possible. Meet with the potential teams or individuals to better understand their strengths. Learn about their processes. Are they Agile? Are they focused on DevOps? Are they aware of the latest technologies and standards? Is security a priority? What procedures do they have in place to ensure business continuity? Are there safeguards, if a situation arises, to keep your software development on track? When you gain this insight, you’ll be better prepared to select the right partner that’s focused on quality and the success of your software.

In addition, ask potential partners about QA and testing. Will they use a variety of tests to confirm quality? Ensure they’re proficient in this area by discussing it early on. Common tests to ask about include: regression testing, static testing, dynamic testing, white- and black-box testing and visual testing. The key is to ensure your provider makes QA/testing a priority.

Source: Forbes- How To Successfully Outsource Software Development (Without Compromising Quality)

Global Application Management Services Market 2017-2021

SWOTAnalysis.info has announced the addition of “Global Application Management Services Market 2017-2021” research report to their website SWOTAnalysis.info

This press release was orginally distributed by SBWire

Bangalore, India — (SBWIRE) — 02/09/2017 — AMS help organizations manage their business applications to increase operational efficiency and effectiveness. These services also support business growth and help organizations evolve with the changing business directions. The main stages involved in AMS are application development, monitoring, maintenance, and support.

Report forecast the global AMS market to grow at a CAGR of 4.75% during the period 2017-2021.

The report covers the present scenario and the growth prospects of the global AMS market for 2017-2021. To calculate the market size, the report considers the revenue generated from the sales of AMS.

The market is divided into the following segments based on geography:

– Americas
– APAC
– EMEA

Global AMS Market 2017-2021, has been prepared based on an in-depth market analysis with inputs from industry experts. The report covers the market landscape and its growth prospects over the coming years. The report also includes a discussion of the key vendors operating in this market.

View Full Report at http://www.marketresearchreports.biz/analysis/943601

Source: digitaljournal.com-Global Application Management Services Market 2017-2021

8 best practices for outsourcing app development projects

When your company has a need for a unique software application, sometimes the best solution is to develop it in-house. But if you are managing a company of 20 or fewer employees, that job is likely to be cost-prohibitive.

One solution for very small companies is looking to international markets, where outsourcing costs a fraction of the cost that it would take to have U.S. developers do the work. To illustrate, an average programmer/developer in India makes a little over 378,000 rupees, which equals about $5,500 USD, per year.

“This worked wonderfully for me,” said a CEO/manager at a very small firm that I was consulting with, who outsourced a software development project to an Indian company.

For small companies that elect to go with the offshore outsourcing route, there are some issues to consider and best practices to follow. Here are eight of them:

Do your research

Software developers in other countries might be harder to vet than domestic companies, but you should take the time to do it. Ask the development firm for a set of verifiable financials, and for a history of the company (i.e., how long it has been in business) and a list of customers. You could randomly select references from the customer list, or ask the potential outsourcer for references, but talking to past or current clients is key. Be sure to ask them what didn’t go right with the work, as well as what pleased them.

Look for a firm with a local contact

Many software development firms recognize that companies like the peace of mind that dealing with a local contact enables. This is why they will often establish a small U.S. office with sales and project lead persons who know both English and the local language of their home country development team. These individuals also understand IT project work, and can immediately respond to and interact with their U.S. clients. If you can find a firm that has a local office, your project communications and service levels for the project are also likely to be enhanced.

Execute a non-disclosure agreement

Never start work without having the development firm sign a non-disclosure agreement (NDA) first. The NDA protects your intellectual property, which includes the requirements definition of the software, the software design, and the software itself. It prevents the development firm from repurposing the work that it did for you to others. You should also retain a lawyer who can ensure that the agreement is binding in the development firm’s home country, if they don’t have a U.S. office which can place them under U.S. legal jurisdiction.

Have adequate legal representation

We all enter into agreements hoping that nothing ever goes wrong, but sometimes it does. A project can fail to meet your expectations, it can be late, or worse — not done at all. Never enter into an agreement without first ensuring that you have legal representation that can reach into the development firm’s home country, if it has to. Consider consulting a law firm that practices international law, or an attorney in the country of the development firm.

Establish a staff lead person for the project

Communications and management of offshore projects is difficult enough. You don’t want to add even more complexity by letting multiple people from your staff and from the development firm interact with each other and make decisions. Instead, you should plan to assign a lead person/coordinator from your staff and a lead person/coordinator from the development firm to co-direct the project. This assures that all communications and decisions concerning the project are funneled through these central contacts.

Include software documentation in your agreement

It won’t do much good if all you receive from the deal is a finished piece of software. Minimally, the documentation should be a reference for your staff who might be called upon to maintain or enhance the software. Your requirements might also call for a help function in the systems or for a user’s manual. Make sure all documentation is written in your language.

Ask for early proof of concept

Especially if you haven’t done business with your development firm before, include the deliverable of an early proof of concept model of the software in your contract. Actually seeing a small example of what the real thing will look like goes a long way to ensure that you and the development firm are on the same page. If you find out that you’re not on the same page, you can easily cut the cord at an early prototyping stage without incurring too much cost or loss.

Maintain leverage until the end of the project

Before accepting any software project, you should have your staff review and sign off on all aspects of it. Always strive to reserve at least one third of total payment for delivery after acceptance, since that is the only leverage that you have with your developer to assure that fixes get made if there are acceptance issues.

There are many other outsourcing project best practices that companies develop as they gain more experience with projects, but the most important thing to remember is that you must be willing to take control of an outsource project process from end to end. While the cost of outsourcing might seem cheaper at first, the math can rapidly change if things go wrong and you’re not there to intercept and to correct them at early stages.

Source: Techrepublic- 8 best practices for outsourcing app development projects