Organizations spend around 70% of their IT budget on maintaining the existing software especially the complex legacy enterprise software systems. The biggest challenge IT heads face year over year is to reduce the money spent on annual maintenance of legacy systems thus giving them enough room to invest on future facing technologies, i.e., digital transformation.
Software development costs rise every year be it custom application development or ERP software development, CRM software development. We shall find out in this article if software development outsourcing is of any help in this regard. This problem is common whether it is application development for large, medium or small business.
This article discusses different approaches towards software development and maintenance, namely in-house development, software development outsourcing and on-demand software development.
Going captive way by hiring an in-house talent is time consuming and is not yielding the desired results. As there is no bench concept, the teams in captive organizations really struggle to deliver projects with the longer cycles to hire and when some of the resources did not end up how they hoped. Then there is an angle of managing human capital with rising expectations and uneven pay among people at same pay grade.
Organizations can look at consulting companies who with their resource strength can provide quick on-boarding of talent but with rising costs on both human capital and physical infrastructure, it is not easy task for consulting companies to reduce charges on annual maintenance contracts. This only implies that the costs will continue to rise giving zero room for investing into future technology platforms.
What is the solution?
The solution lies in finding where most of the money spent in the maintenance budget. It is a no-brainer, human capital. Hence the answer should also lie in finding a way to spend less on human capital yet get the work done.
How is it possible?
Historically enterprises pay huge money on annual maintenance contracts but the actual utilization of the resources for the money spent hovers around 50% or less. Enterprises spend huge money to have the resources readily available which indirectly means they pay huge premium towards insuring the coverage of their enterprise systems.
Is it really needed? Is there an alternative?
Yes, there definitely is an alternative which is the perfect combination of ready made talent and saving costs
What is it?
On-demand software development platform. You heard it right. By going on-demand platform way, organizations can cut down the maintenance costs significantly.
Which are such platforms?
AIDOOS, an on-demand software development platform enables organizations overcome the need of hiring vendors, no need to hire developers or freelancers. Organizations can simply push the day-to-day software maintenance or enhancement tasks onto the platform which are distributed to subject matter experts (SME) across the globe.
Organizations pay only for the task removing the need to pay for bench time, hierarchy costs. This significantly reduces the annual software maintenance costs allowing them to spend this money on future facing technology needs. Organizations are also not limited by the strength of the workforce as the work is distributed to SME’s across the globe which reduces the overall time to completion.
This on-demand task-based software development maintenance brings lot of advantages:
This model significantly reduces the software maintenance cost and completely takes away the burden of this aspect. This allows organizations to push the maintenance work to platform and focus on investing into future facing technologies.