Effective Strategies to Deliver Sustainable Cost Optimization in Application Services


Published: 04 October 2017 ID: G00327748

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Summary

The pressure to optimize application service costs is compounded by the demands of digital business initiatives. Sourcing and vendor management leaders can move to fixed-price, outcome-based contracts, leverage automation and perform an application portfolio analysis to deliver sustainable results.

Table of Contents

  • Introduction
  • Analysis
    • Move to Fixed-Price, Outcome-Based Pricing Models
      • Benefits of the Fixed-Price Model
      • Why the T&M Pricing Model Is Prevalent
      • How Agile Development Can Help
      • How Productivity Units and Measurement Tools Can Help
    • Negotiate Year-Over-Year Cost Reductions Through Efficiency and Automation for Application Management Contracts
      • Add Efficiency Improvements as KPIs
      • Adopt a Reinvestment Model to Incentivize Providers
    • Conduct an Application Portfolio Analysis to Drive Long-Term Value
  • Case Study
  • Gartner Recommended Reading
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