Application Development Optimization Can Cut Costs | eWeek

Application Development Optimization Can Cut Costs

Application Development Optimization Can Cut Costs
Written By
Nathan Eddy
Nathan Eddy
Apr 17, 2014
2 minute read
eWeek content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More

Optimizing application development and maintenance (ADM) can cut costs by more than 50 percent, according to a report by IT research firm Gartner.

The Gartner report identified several key recommendations to help chief information officers (CIOs) cut costs by optimizing ADM, including performing an application portfolio and life cycle activity analysis to consolidate ADM suppliers.

Currently few organizations use a comprehensive, methodical approach to their sourcing strategies for application services, and only 11 percent of organizations master sourcing.

The report indicated most organizations source application work tactically, asking a few known service providers to size the work and compete for it on price and daily rates.

In addition, few organizations master sourcing, and most still use staff augmentation for ADM work inefficiently.

“ADM accounts for 34 percent of IT budgets,” Claudio Da Rold, vice president and distinguished analyst at Gartner, said in a statement. “Most organizations tend to assume that the cost of ADM can only grow over time due to rising labor costs and the increasing complexity and number of applications. The ADM unit cost can be significantly optimized over time, provided that best practices across the application and sourcing life cycle — strategy, selection, negotiation and management — are followed.”

The report found one of the main challenges that organizations typically face for ADM services is their inability to properly size the associated effort.

Without performing an application portfolio and life cycle analyses, it is difficult to connect the effort to the application complexity.

To be able to identify how demand has an impact on the application architecture, organizations first need to ensure the requirements that reflect business demand are complete, testable, cohesive, correct, current, essential, feasible and relevant, the report said.

“When sizing the total development effort, organizations need to determine which activities of the life cycle are embedded in the estimation, because different phases in the life cycle can be sourced with different service providers — whether they are internal or external,” Gilbert van der Heiden, research vice president at Gartner, said in a statement. “For sizing of the maintenance effort, additional models may apply. Whatever model an organization uses, it should be applied consistently and as objectively as possible, with a focus on measuring and improving productivity and quality.”

Overall, best practice contracts, business key performance indicators, service level agreements (SLAs), productivity and simplification targets, as well as a formal evaluation process for vendors, work to enable a much more disciplined and organized approach to sourcing management, the report concluded.

eWeek Logo

eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site's focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

Property of TechnologyAdvice. © 2026 TechnologyAdvice. All Rights Reserved

Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.