With increasing pressure on income and student numbers maybe its time for Higher Education institutions to take a long hard look at outsourcing their application development & maintenance activities?
At 20-40% of the overall annual IT budget, application development & maintenance is one of the most difficult to resource & manage, especially in an era of rising student expectations and rapid technology change.
With a few notable exceptions, the UK Education sector is behind others sectors in exploring application outsourcing. It can struggle to attract and retain development staff in completion to sectors that pay more, offer faster advancement, employ more modern tools and offer a greater range of work.
Common triggers for reviewing how you deliver and maintain software are:
- Internal knowledge & resource constraints, including loss of core skills through resignation and retirement (including contractors) or need to re-deploy scarce staff to more innovative & strategic priorities
- Improve Stakeholder satisfaction
- Cost reduction and need to re-direct spend elsewhere, particularly Digital transformation
- Improve software development processes, including, Agile development, integration & testing capabilities.
What are the major Benefits?
- Typically a minimum 30% cost reduction against current spend
- Access to a deeper pool of ‘on demand’ resources
- Improved internal system user and stakeholder satisfaction
- Reduced time to delivery of user requirements
- Clear performance SLA’s mapped to core metrcs
- A responsive and Agile development approach and shared enabling platform
So why isn’t Applcation outsourcing more common across the sector?
IT Outsourcing continues to grow in most sectors, especially Public and Utilities. Higher Education is a slow-moving and conservative sector historically insulated from commercial pressures and with ample funding in recent years. This is now rapidly changing forcing institutions to take a long hard look at their spend, seek efficiencies and meet increasing student and stakeholder expectations.
The major challenge is that data on current application development & maintenance performance and user satisfaction is not available. Without a clear view of current spend, metrics-driven performance and total cost of ownership (TCO) how is it possible to assess the savings and benefits that arise from outsourcing? Creating this data set is a prerequisite to successful outsourcing and cost benefit analysis.
Another common challenge is that some applications are poorly developed or documented (often both) increasing risks that come with transitioning their support to a third-party, especially when staff knowledge has already been lost to the organisation.
In spite of these practical challenges the benefits are attractive and deserve consideration.
Contact us for details of our FREE Software Outsourcing Assessment and find our how you can save money AND improve stakeholder satisfaction with your software solutions.