Onshore Support Services

Onshore support management is currently one of the IT functions most attractive for outsourcing. It is also expected to further grow and develop in the next 5 years. The main reason for this is the possibility to significantly reduce the cost of application management while improving its quality.  

In this post, we’ll reveal the important attributes of successful application management outsourcing (AMO), discuss what service and payment options businesses have today and what additional benefits they can expect.

What application management can include

Application management services comprise a wide range of activities aimed at ensuring an application’s health (availability and high performance) and relevance to current business needs. The application management may include:

  • Proactive monitoring and troubleshooting.
  • Performance management.
  • Incident management.
  • Enhancement management and evolution.
  • Help desk services, and more.
All-round outsourcing

This means that the vendor assumes responsibility for the complete management of activities around application support, enhancement, and optimization. The vendor not only provides tech services but also offers ideas and recommendations on beneficial optimization and evolution of the application according to new business requirements and helps to enable, structure and implement the right digital transformation initiatives.

Selective outsourcing

Which means delegating to the vendor responsibility for a certain aspect of application management (be it application troubleshooting or enhancement) or a specific set of aspects (performance management and monitoring, troubleshooting and application enhancement).

Application management outsourcing entails different pricing models

You can opt for engaging a dedicated team for application management and pay monthly an established sum to an AMO provider depending on the number of people you attract to this team.

Another option is that an AMO provider can bill you at a fixed price on a monthly or annual basis. A subscription fee allows you to feel confident about the IT budget as you can predict future spending quite precisely. However, if your system is not demanding in terms of management, you can end up with considerable overpaying.

When you know that the average number of issues is usually low, incident-based pricing can work well for you. In this case, your payment bases on the amount of time a service vendor’s team spend on a task and its complexity. The challenge of such an approach consists in the proper evaluation of efforts that are required for problem resolution. You’ll have either to trust the vendor or to control the estimation process.

Mixed pricing is probably the universal solution in the AMO sphere. You pay a basic fee and get a restricted available number of issues to be solved. All ‘overdraft’ requests or more complex cases are charged individually.

Value-based pricing is a relatively new approach to pricing but with a good tendency to become popular. This pricing type depends on the real beneficial outcomes of the service. For example, in the case of proactive monitoring activities, the outcome should be a definite decrease in the number of registered requests. With this pricing model, you considerably lower the risk of insufficient quality and not the fully covered scope of the service. The challenge of this model lies in the definition of clear, traceable and mutually agreed SLOs and KPIs.

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