Applications represent 40-60% of most IT budgets but have yet to be significantly outsourced, which will provide organisations with huge cost savings, according to a new report by London Business School commissioned by Fujitsu.
The study found that competitive advantage drives outsourcing direction and decision making and organisations must understand what comprises of competitive advantage for their business and be able to segment their applications portfolio accordingly.
The ability to manage internal stakeholders effectively is crucial and the finance department needs to be involved as early as possible in the outsourcing discussion, the report noted.
The study recommends that organisations need to strike a balance between applications they outsource and must continuously review the way application outsourcing is implemented and managed.
John Hanley, managing director of applications division at Fujitsu UK, Ireland, said: “This is the next big area that CIOs are under pressure to address. The application outsourcing market is not as developed or as advanced as infrastructure outsourcing, but there are huge cost savings which can be realised.
“However, the costs of getting application outsourcing wrong can be very high – and potentially damaging to an organisation’s ability to do business”
