The latest Gartner data shows that CIOs expect IT spending to increase by 5% in 2023. While spending is rising slightly, not all of that money is going into new projects, but rather application maintenance.
Many companies end up devoting large portions of their budget to routine application maintenance. The latest data shows that about 50% of all annual application development and support investments go strictly to maintaining these solutions.
As developing teams devote significant time and resources to maintaining existing systems, developing new IT applications and innovations may fall by the wayside. So how can companies devote the necessary time to application maintenance and develop new applications at the same time? There are three ways to do it.
1. Hire the right person for the right job
Most IT managers know that finding, attracting, and keeping top developers is no easy task. Not only can developer turnover be costly and time-consuming for CTOs, but it also leads to a loss in organizational knowledge as well.
A recent Sinequa survey of 1,000 IT managers found that 64% of IT professionals believe that their organizations have lost years-worth of knowledge because of developers leaving their teams. Making matters worse, the average tenure of an employee is about four years, according to the Bureau of Labor Statistics.
One of the best ways for IT professionals to retain the talent they’ve invested in — and hold onto organization knowledge — is to allow top developers to utilize their unique skills working on projects that they’re excited about.
“Most top developers do not want to support maintenance projects because they prefer to work with the latest technology,” says Keenan Patel, CEO of PRI Solutions. “Our belief is our clients can deploy their talented developers to use their creativity to solve the company’s most complex problems rather than to maintain legacy systems.”
That is why it’s beneficial to consider outsourcing application maintenance. Many companies are already coming to this conclusion, with 40% of application maintenance now reported as being outsourced in 2023, according to Gartner.
2. Make processes more productive
Every CIO wants to be able to do more with less and one of the best ways to do that is by improving existing application processes.
“The pressure on CIOs to deliver digital dividends is higher than ever,” Daniel Sanchez-Reina, an analyst at Gartner recently said. But the problem for many IT managers is that they spend a significant portion of their budget — up to 23% — on quality assurance and testing, according to data from Statista.
One way to improve the testing process and reduce costs at the same time is to run test harnesses in application production — through an application maintenance source — instead of placing all of the testing on an in-house developer team.
“The fully loaded cost of an IT employee is $150 to $175 per hour versus $65 to $75 for offshore resources. So if you outsource, there’s an instant cost advantage — and if the outsource partner uses care in staffing your project, you will have much better outcomes,” Patel said.
3. Find a good technology partner
A recent survey found that the top objective of CIOs — 53% of respondents — was to improve their operational excellence. Another objective high on the list was improving customer experience.
But accomplishing those goals is no easy task and some IT managers are overworking existing employees as they try to meet those goals. “Over-dependence on IT staff for digital delivery reflects a traditional mindset, which can impede agility,” Gartner’s Sanchez-Reina said in a recent report.
That doesn’t have to be the case though. Companies of all sizes can benefit from partnering with application maintenance companies in order to enhance their capabilities without leaning too heavily on in-house developer teams.
Keenan Patel of PRI Solutions says that companies can “improve throughput and quality” while also lowering costs by utilizing application maintenance firms. This can be especially helpful “when IT budgets are under fire.”
He recommends taking a portfolio approach to IT budgeting by putting your “most valuable people on the highest ROI project and outsource the mundane.”
Interested in more information about application maintenance from PRI Solutions? Find out more here.
