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Improving application maintenance: A new approach

Best practices for application management services metrics

Metrics for application management services (AMS) often focus on cost reduction, compliance with service level agreements, or improvement of back-office services. But as more organizations launch tech-driven business transformations, IT leaders have an opportunity to enhance their metrics strategy and deliver more enterprise value.

A shift in application management services metrics

According to Gartner, annual application development and support investment is roughly 43% of total IT spending. Half of that is for new development projects, while the remaining half is for maintenance of existing systems. By 2023, 40% of application maintenance and modernization work will be contracted under a multiyear AMS outsourcing arrangement—a 20% increase from last year.

Why are these numbers significant? Because while managing and measuring AMS operations has always been important to the success of CIOs and their teams, it will only increase in significance going forward.

By reducing the number of IT resources required for application maintenance activities, CIOs can increase emphasis on application enhancements and enabling new technologies that drive value across the enterprise. Enhanced AMS metrics can provide guideposts to help an IT organization achieve those objectives.

AMS metrics traditionally have been designed for and consumed by the CIO’s office for decision-making. That’s important, but in an enhanced metrics framework, the monitoring of metrics can be shifted to middle management and tactical teams—the frontline of AMS. These teams can interpret the data and directly initiate actions focused on meeting the transformation objectives established by the business and IT leadership.

AMS metrics: Changing the value paradigm

A new approach to AMS performance measurement

An enhanced metrics framework aimed at improving application maintenance and driving development of enabling new capabilities has four key levers—productivity, performance, quality, and people.

Figure 1. Levers of enhanced AMS measurement

In this construct, value to the enterprise increases as attention and resources are shifted from tactical support metrics, such as the “number of incidents outstanding” and “incident response time,” toward activities that have relatable business impact, such as “number of enhancements outstanding” and “number of enhancements released.”

While it’s important to track performance with individual metrics, their impact as a whole is a real measure of AMS maturity. That maturity can be evaluated across two other dimensions—throughput and stability.

Deployment of an enhanced application maintenance metrics framework is a multistep process. Once the appropriate metrics for a specific AMS environment are selected, they should be implemented first across the IT organization, then extended to the AMS partner ecosystem. Of course, with an initiative of this scope, an effective change management program can help address challenges and adoption of the changes among all stakeholders.

A case study in best practices for application management services metrics

A multinational audio and imaging technology company is based in San Francisco, CA, with offices in more than 20 countries. The company’s innovative research and engineering creates breakthrough experiences for billions of people worldwide through collaborations that span businesses and consumers.

The client’s IT footprint includes 10 primary technologies and more than 80 different applications. It extends to 35 countries and includes cloud applications hosted by a service provider, software-as-a-service (SaaS), and custom applications developed in-house. The client’s IT department provides support for business use of IT applications, development of new applications, enhancement of existing applications, and day-to-day application support.

Since 2010, the client had outsourced application management and development to a service provider. Performance was measured using sophisticated metrics that the client developed. However, results indicated subpar performance by the service provider, including:

  • Higher-than-acceptable incident count
  • A growing backlog of user enhancement requests
  • Higher-than-acceptable team attrition
  • Low-end user satisfaction score
  • Minimal process documentation and adherence

In 2013, the client engaged Deloitte as its new AMS provider for support across all its software applications, either on-site or through one of Deloitte’s global delivery centers. Additionally, the engagement included development support services using a mix of functional, technical, system administration, and testing personnel who work hand in hand with the client to develop, enhance, and support applications. Altogether, Deloitte assists with three or four major application management and development projects annually, as well as 10 to 15 other projects of varying scope and duration.

The client’s vision for the program was to optimize day-to-day application maintenance and support so that more resources could be applied to application development and enhancement as part of the company’s ongoing digital transformation. The client and Deloitte established a governance program driven by a set of enhanced metrics designed to monitor the day-to-day system performance issues that the client had previously experienced. These metrics were determined in part by the maturity of the client’s IT organization and tools to capture and report these metrics.

In less than three years, the client saw significant results across several dimensions, including:

By deploying enhanced metrics, the client was able not only to stabilize its application management and development program, but it was also able to begin delivering much greater value to the organization.

A new way forward for AMS programs

AMS is not new, but a focus on enhanced metrics can enable CIOs and those managing IT portfolios to deliver broader enterprise value through improved application performance and cost-efficiency.

Certainly, new tools and technologies contribute to this transformational change. But enhanced metrics, if strategically chosen and effectively applied, can provide significant clarity about the performance of an AMS program.

The four levers of productivity, performance, quality, and people can enable AMS programs to deliver transformative value above and beyond tactical support services.

Get in touch

Jishnu Mullick
Principal, SAP
Deloitte Consulting LLP
Ramit Dayal
Senior manager, SAP
Deloitte Consulting LLP

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