January 08, 2021
January 08, 2021
Contributor: Robert Snow
How application design and development teams can drive better cost cutting and cost optimization.
There’s never been a time when application leaders haven’t been under pressure to reduce costs and optimize spending. COVID-19 has only increased this pressure, as organizations have accelerated digitalization to maintain a viable, virtual business presence.
Even so, some practical steps can be taken to help ensure that costs are kept in check — especially at the design and development stages of an application’s life cycle.
Download roadmap: Strategic Cost Optimization
In many ways, the development stage is a natural place to first seek cost-cutting. “Investment in new application development is 17% of the total IT spend, making it a fruitful place to look for opportunities to cut costs, optimize spend or improve value,” says Akis Sklavounakis, Senior Director Analyst, Gartner.
Gartner has identified four ways to cut costs and optimize spend during these critical stages.
It’s always a challenge to find top development talent, especially if the search is limited to local talent only. But the COVID-19 lockdown highlighted recruitment possibilities to include a remote workforce.
A Gartner survey of 127 company leaders showed that 82% of respondents intend to permit remote working some of the time, and 47% intend to allow employees to work remotely full-time from now on. The fact is, a “talent anywhere” approach is fast becoming the norm, and is likely to remain so long after the pandemic.
At the same time, application leaders are also harnessing the work of end users outside the IT function. This growing pool of citizen developers and business technologists can help build or customize data and technology solutions, while saving on IT costs.
Read more: It's Time to Disrupt the Application Organization
The ability for organizations to rapidly adapt to the changes brought on by the pandemic have been remarkable. Organizations found that they had to accelerate agile transformation plans and actions in order to be successful with digital business.
With a more agile operating model, time-to-value can be shortened, teams can more readily reprioritize activities and deliverables, and bureaucracy can be minimized by employing short-term incremental and iterative planning.
By using software-as-a-service (SaaS) for commodity business functions such as human resources management, finance and procurement, organizations can reduce upfront costs significantly.
Additionally, by using infrastructure-as-a-service (IaaS) instead of on-premises hardware, cloud-based development tools instead of licensed tools, and platform-as-a-service (PaaS) application runtimes instead of licensed ones, application leaders can drive further cost reductions.
Taking the long view of an application life cycle will help provide insight into the true costs of maintaining and managing a solution. With TCO as a key criterion, all direct and indirect costs for the lifetime of an application are taken into consideration. These include recurring, nonrecurring, future and go-live costs.
At the same time, incentivize development teams to “design for change,” and better manage technical debt throughout the application life cycle. The result is that application development teams will seek ways to design for long-term supportability, maintainability, reliability and scalability.
“COVID-19 brings higher demand for new application services as organizations accelerate digitalization while recovering and renewing their products and services,” Sklavounakis says. The key is to employ tactics that combine near-term savings with strategic long-term savings in application design and development.
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Recommended resources for Gartner clients*:
Drive Cost Cutting and Cost Optimization in Application Support by Akis Sklavounakis, et al.
*Note that some documents may not be available to all Gartner clients.