Enterprises can cut some fat out of their vendor agreements by reducing support service levels. The vendor may have tiers with gold standard levels comprised of 24-hour support service and a quick resolution time, whereas a silver level of 12-hour support might still satisfy enterprise needs at half the cost. Another option is to drop maintenance entirely except for patch updates.
With sluggish economic rebound, it remains necessary to save costs wherever possible. One area that should be considered is application maintenance services. Cutting back on service levels, negotiating with vendors, and implementing good application maintenance processes can yield short and long-term cost reduction results with minimal consequences on day-to-day business activities.
Before beginning, companies should complete a full assessment of their current application maintenance costs including:
Refreshing the enterprise's application portfolio inventory, or starting the process if an inventory does not exist. In the face of a reduced IT budget, the department needs to take stock of assets and activities. The care and feeding of an application takes resources, and a baseline review of the service is not complete without some sort of inventory check of IT supported applications.
Reviewing services and service levels. Current service levels offered to the department for application changes must be reviewed. If internal Service Level Agreements (SLAs) are in place with business units, a review of current expectation should be revisited.
Reviewing current maintenance and licensing contracts for COTS applications. Reviewing what level of support is currently being offered can translate into cost saving opportunities. As well, existing licensing arrangements may not be ideal for the enterprise's needs or reveal instances of over-licensing.
Reviewing contracts for outsourced maintenance on custom applications. Find out what the current maintenance rates are for outsourced application maintenance. This information needs to be delivered to business stakeholders in order to justify the need for service reductions. For example, where the business pushes back on reduced time to completion of application enhancements, a cost per maintenance hour can be relayed back as the cause for the delay given a reduced maintenance budget.
Reassessing application enhancement projects. A look at the current project portfolio is always recommended in organizations looking to reduce costs. Application enhancement projects approved prior to a shift in the enterprise's financial position should be reevaluated.
In this slideshow, Info-Tech Research Group highlights a variety of expense reduction techniques and their respective impacts on budget and business. These tactics are classified by the time to realize targeted savings.