Application Management Services (AMS) is an approach to outsourcing, where an IT service provider not only takes responsibility for maintaining your IT, but also for managing it, developing it and making sure that it can keep pace with your business as it develops, grows and evolves. And as more and more companies require a strong integration between IT and business, AMS is becoming increasingly prevalent.

What’s the difference between maintenance and management?

Maintenance is typically about making sure an IT installation performs as specified in a Service Level Agreement. By nature it’s static and based on the needs and requirements present when the agreement was drafted. Therefore, any optimisation will be within the framework of the portfolio and will by definition be reactive in nature.

A management contract, on the other hand, aims at taking your business into account. An AMS agreement combines consultancy and IT services to focus on proactively management rather than just maintenance to ensure that your IT always supports your business. 

A conventional maintenance contract focuses on operations with little time developing ways for IT to support business on a strategic level.

When and why consider AMS?

Often IT professionals and ‘owners’ of larger applications find themselves with too little time and too few resources to invest in getting their IT to support their business objectives. Their work tends to focus on emergencies, trouble-shooting and day-to-day maintenance rather than IT strategy, architecture and future functionalities. Furthermore, when the need does arise to expand the business, specialist resources can be hard to find and later develop and use to their full potential. AMS presents the ideal solution for this problem.

Benefits to AMS

A recent survey among the 400 global top performers showed that the best of them spent 17% less on IT thanks to outsourcing strategies that included a strong AMS focus. While there are as many reasons for this as there are companies, some common trends have emerged to explain why AMS has made such a difference:

• Scale without expanding
  You can develop your business through the use of IT without having to expand your IT department. Resources are easily scaled to match your needs
• Back to real business
  You will arguably enjoy a more professionally challenging working environment, where you can concentrate on strategic and development-oriented projects rather than day-to-day support tasks
• Flexible and fully transparent cost
  Finally, you get a complete overview of associated costs with no hidden or unexpected expenses.

From service provider to partner

So far, there are only few IT services providers that can provide the combination of business consulting and application maintenance required to offer a full AMS solution. Those that can, however, are able to offer a service where the traditional roles of service provider and customer are altered to reflect an ongoing, mutually beneficial partnership that can help a company use IT as a strategic tool for growth.

When choosing a partner for an AMS agreement, our experience has shown that it is vitally important to look for three factors:

• Flexibility and communication
  How rigid is your partner in terms of day-to-day communication and adaptability beyond contractual issues?
• Business and IT
  Does your partner have a thorough understanding of how IT can help a business in reaching its short- and long-term goals?
• Partnership
  Does your partner have a tradition of close relationships with successful companies?

5 considerations when planning AMS

• Contractual issues
  An AMS agreement is usually quite open-ended because of its proactive nature. It is therefore important to find a flexible service provider who can handle any contractual adjustments. Despite the changing nature of the work, both parties should aim to define the contract as fully as possible. As a minimum it should include deliverables and a definition of responsibilities.
• Performance
  Depending on your business, there will be periods where performance is crucial. By integrating Key Performance Indicators (KPI) with your Service Level Agreement, you can ensure that the performance of your outsourcing contract can be measured against your overall business performance.
• Cost model
  It is important to have a look at the implications of cost and pricing and define the best model for your business. Costs can be fixed, scalable or diminishing over time. Each model has its advantages and drawbacks which should be carefully considered before starting an AMS agreement.
• Procurement
  The decision to make any purchases should involve business consultants who can help explore the consequences and implications of the purchase
• Governance
  A good IT services provider can certainly help you with this, but even if you decide to establish governance on your own, make sure that it is well-defined and in place for the project.

To find out more about AMS and how NNIT can ensure your IT applications support rather than hinder your business, please contact us.