Software services should be as flexible as possible to meet companies' individual requirements. As a key component of every organization, business IT has the challenging task of connecting employees, processes and systems.
These days, applications can't be handled in isolation. They have to connect supply chain, manufacturing, sales processes and customers in a single solution integrated into the value chain. Personalized offers tailored to customer requirements are needed to keep up with the competition.
Production wants to manufacture precisely to customer specifications, Marketing wants to offer personalized product recommendations. Many companies are also preparing for the challenges of Industry 4.0, which enables predictive maintenance, for example. But the various back-end systems, such as the customer database and enterprise resource planning, marketing analysis tools and SAP, also need to be linked together. Because Big Data applications require data and information to be exchanged.
In many companies, however, the modern business software IT landscape is massive, complex and scattered. IT infrastructure has been repeatedly updated, supplemented and expanded in recent decades – with a variety of technologies – from Cobol, Microsoft VB, Java and C# to standard packages like SAP, Oracle and Hyperion.
The problem is that more and more applications are being included in the IT landscape, while existing solutions continued to operate. And the cost of maintaining such a scattered array of business applications is constantly rising.
The different technologies that are used for the applications also prevent them from connecting and an integrated system from being built. And this integration is crucial to meeting today's business goals.
Also, the costs involved in maintaining multiple systems with more or less the same functional scope, with scarce resources and capacities of the different technologies, are disproportionately high. So it's not surprising that efficient application management for the legacy environment is currently at the very top of CIO and IT Management agendas.
To keep costs under control, many companies have already been outsourcing their application management for a while. Initially, outsourcing was limited to server infrastructure and databases – with a focus on availability, response time and cost reduction.
Then came technology-heavy applications such as standardized or customized SAP and Oracle systems. With the introduction of process models, such as ITIL and CMMI services, administration of infrastructures and applications became increasingly professionalized in recent years, centered on IT-driven goals such as response times, number of incidents and server and application availability.
However, the discrepancy between infrastructure and application availability leads to constant problems: when a service is down, valuable time is lost searching for the cause. It has to be determined whether the incident is due to a database or a server, or if an application error is responsible. If suppliers apply a multi-vendor policy and different service providers are responsible for the infrastructure and application management, then mutual finger-pointing is not uncommon.
During that time, users or manufacturing continue to wait for services that have been interrupted due to lack of oversight and management throughout the value chain. In the worst-case scenario, this quality shortcoming causes the company to lose customers and revenue, no matter what service level agreements are in place for the individual components.
Today's demand for outsourcing is therefore focused on the administration of all applications that support end-to-end business processes. Companies want an integrator with comprehensive capacity: It should be in a position to take responsibility for the availability and performance of all IT-supported business processes – including the data protection aspects. Alongside the typical ITIL processes, additional delivery processes are added to manage and monitor business processes.
Different service providers are often responsible for maintenance and operation in this constantly expanding application landscape. So it's worth examining these structures to streamline them as much as possible and align them directly with business goals.
Ideally for this you have a partner at your side who can provide delivery processes in addition to the typical ITIL processes, and monitor the entire value chain – from chain management to business process monitoring, and business process optimization to chain configuration and release management. With this approach you can ensure a continuous end-to-end value chain that is fully aligned with the business goals.
When analyzing the application landscape, the first step is therefore to clarify with the outsourcing partner which applications and services are currently used, under which licensing models.
After identifying the basic applications, you can achieve transparency with respect to operating costs in a second phase. Then you assess whether each application is suitable to reaching your business goals.
Only then can you move on to improving the application landscape, balancing current costs with the cost of third-party operation.
Application management always has to address the issue of how to deal with old solutions that are no longer needed. When companies switch to the Cloud there are many different technical strategies for dealing with legacy applications, including re-hosting, re-platforming, re-engineering or a completely new build of the entire application landscape.
For applications that will be implemented for several more years, migration into the Cloud (re-hosting) is worth it. Service providers can support companies with their assessment and cost-benefit analysis.