3 Trends in AMS (for the Digital Era)

1. AMS evolves from cost cutter to transformation partner

An estimated two of every three IT dollars is spent on day-to-day maintenance and support of existing technology. That such a high percentage of IT spend remains locked in the management of the existing IT state stands in direct contrast to the tremendous pressure on CEOs and CIOs to embrace transformation, accelerate innovation and advance business.

Historically viewed as ‘keeping the lights on’ work, Application Management Services (AMS) have always played an important role in increasing operational efficiency, containing costs and freeing up internal resources to focus on more innovative and strategic initiatives. But in today’s fast-paced, fiercely competitive business climate, the high cost of AMS is no longer tenable, and simply keeping the lights on falls far short of providing transformational value.

When we consider the proliferation and ascension of technology in business, the accepted truism that every company is now a technology company, the blinding speed with which technology evolves, and the wholesale business transformation being driven by technology, AMS vendors with the right stuff are being re-discovered and re-embraced as strategic business partners vital to success, transformation and growth.

The digital era demands a new approach to application management. Companies need to continuously innovate, evolve and integrate their applications to achieve better business outcomes. The AMS outsourcing conversation today is moving away from tactical efficiency gains to providing strategic capabilities for transformation and innovation.

2. AMS gets agile

Applications are at the heart of digital transformation, and the only constant in transformation is change. Applications are moving to the cloud. Agile and DevOps methodologies are reinventing the way development and operations teams design and deliver applications. New practices like design thinking and Kanban are elevating speed and time-to-value over lengthy, complex project cycles.

Those in charge of enterprise applications must look beyond established practices and accelerate the pace of translating business needs into application opportunities.

The standard approaches to application development and management no longer suffice as the drive to be more agile and deliver solutions faster with higher quality at a lower price becomes stronger than ever.

The onus today is on IT and AMS to work in concert to investigate new technologies and trends, define the specific business opportunities they make possible for your organization, and continuously and quickly deliver iterative releases of multiple applications that delight end users and advance business. Based on the principle of evolving requirements and solutions through collaboration among self-organizing, cross-functional teams, Agile can foster adaptive planning, early delivery, and continual improvement.

By extending Agile concepts beyond development and into the ongoing support, maintenance, and optimization of their applications, companies can help ensure they receive maximum return on their software investments.

3. AMS gets intelligent & automated

The demands that today’s businesses place on IT are intense — applications must be free of downtime, highly available, and performing optimally at all times. Providing these capabilities requires intensive monitoring and maintenance, which can be difficult in the complex IT environments that are now typical of many organizations. IT leaders are looking for ways to gain insight into issues before they impact end users.

Intelligent automation can be applied not just to business processes, but also to IT activities, such as application management. As the pressure to digitize increases, the IT team must continue to find new and innovative ways to do more with less. Real-time, holistic insight across the data center, forecasting and anomaly detection, and predictive analytics — coupled with automated actions — are all necessary to remain competitive in the digital economy.

AMS teams need to avoid duplicate effort and finger pointing, and instead focus on optimizing allocation, anticipating incidents, and shifting from a reactive approach to a proactive approach. This isn’t change for the sake of change; companies that pursue such initiatives on the way to end-to-end IT operations visibility have been found to be three times more likely to fix issues more quickly, more than two-and-a-half times more likely to have lower IT error rates, and more than two times more likely to have high availability of IT systems and services.

Gartner predicts that by 2019, IT service desks utilizing machine-learning-enhanced technologies and AI will free up to 30% of support capacity. And within ten years, virtually every application – be it ERP, CRM, BI and more – will incorporate some form of AI.

The use of AI and predictive analytics brings further automation to enterprise application management processes. From predictive insights to greater consistency in incident creation to self-help Chatbot technology, artificial intelligence presents a great opportunity to improve operational speed and efficiency for the digital enterprise.

AMS spending on the rise

Spending on application management services (AMS) is on the rise. Grand View Research valued the global AMS market at $52.99 billion in 2015 and forecasts it to reach $86.60 billion by 2025. According to Technavio, the global AMS market reached $83.16 billion in 2016 and will experience CAGR of 4.75% to reach $105.02 billion by 2021.

NTT DATA delivers AMS for the digital era

At NTT DATA, we offer a transformative solution — Application Management Outsourcing (AMO). AMO is NTT DATA’s award-winning framework for delivering application management outsourcing services. AMO uses real business metrics to help you identify near- and long-term optimization opportunities and ensures your applications stay optimized by continuously measuring and analyzing your entire application portfolio’s performance and helping you find opportunities to improve performance and reduce costs, while growing your enterprise.

NTT DATA’s application support services helps our clients determine what applications to outsource – and why. From there, we help you create a business case and roadmap for the outsourced relationship, including user and production support, maintenance and enchantments. Application optimization services provide analysis to assess, rationalize, migrate or retire your applications. This includes cost considerations, technology optimization and retirement/migration factories. Sourcing strategy and design services offer due diligence and assessment of your current application outsourcing effectiveness, ultimately developing a future roadmap for success. And service optimization services allows you to assess and transform your processes using ITSM and CMMI best practices and establish metrics management programs of service management analytics.

Contact NTT DATA if you want an outsourced AMS partner ready, willing and able to accelerate your transformation in today’s digital era.