HCL Technologies in a survey said CIOs can save $6.8 billion through improved Application Support & Maintenance (ASM).
The survey of 300 CIOs from the U.K. and U.S. revealed that ASM now accounts for 38 percent of large organizations’ overall IT budget each year.
Based on the IT expenditure of Fortune 2000 companies this equates to $11.3 million per organization annually.
83 percent of respondents stated that the cost of maintaining and supporting these applications was increasing year on year, while over the last 12 months organizations have on average seen a 29 percent increase in support tickets for ASM.
IT departments are finding it increasingly difficult to prioritize application problems and/or service requests.
88 percent of the large enterprises surveyed said they found prioritization a challenge. 90 percent said that resource and skills restraints were making it difficult to align business and IT objectives. 14 percent stated they have mapped business benefit from IT.
“ASM represents a disproportionately large proportion of IT spend. Many organizations are struggling to meet users’ heightened expectations of application performance, which in turn is leading to a growing number of support tickets,” said Vijay B Iyer, senior vice president, Global Head of Applications Outsourcing, HCL Technologies.
On average, more than two-thirds (68 percent) of annual IT budgets are spent on running the business (RTB), the survey said.
87 percent believed that budgetary pressures were hindering their ability to undertake business transformation projects.
83 percent stated it was priority for them to reduce the proportion of their organization’s IT budget on RTB, so they can invest more in transforming the business through innovative technology projects.
86 percent indicated they didn’t expect their existing ASM function (in-house, outsourced or combined) to deliver any cost savings in the next three years.
45 percent stated ASM was managed in-house, whilst 17 percent outsourced this function.
38 percent stated that ASM was carried out by both an in-house team and an outsourcer.
83 percent CIOs believed that traditional ASM processes are inefficient as they deal with and resolve application incidents on a case-by-case basis, rather than using an industrialized and consistent solution
67 percent stated that their ASM function was inflexible in supporting business expansion and is not providing continuous improvement
81 percent of companies organized their ASM function around application silos
81 percent stated that a small number of applications created a disproportionally high number of ASM tickets
91 percent said root-cause analysis was taking longer due to the increasingly complex nature of the IT landscape.
The traditional IT-KPI focused approach towards ASM is fast becoming outdated.
CIOs need to be able to drive costs out of their operations, while at the same time drive business performance. This can be enabled by using business-focused KPIs, yet our survey reveals that less than half of organizations use such metrics. It is clear an alternative approach is required for an IT function that hasn’t evolved for the last decade.
By leveraging HCL’s unified application service management framework, called ALT ASMTM, CIOs can focus on strategic business goals for application portfolio modernization, business process innovation and transition to the cloud.
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