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Focus on Demand When Managing ADM Services

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by Doug Bunch

Cost cutting alone is not enough to optimize your application portfolio investment. Top-performing organizations are focusing on the “demand” side of the supply and demand equation.   

Check out these TPI Top 5 essentials to an effective Application Development and Maintenance (ADM) demand management strategy:

1.  Create an investment mindset. View your ADM spend as a financial investment in an asset rather than an expense. A chargeback system can show stakeholders that the services are not “free,” introduce accountability and drive better decision making. Form stakeholder teams to plan and approve overall investments, define business rationales and priorities, and develop “roadmaps” outlining your support requirements.
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2.  Define a strategy. Application spending should reflect business priorities. The investment strategy should outline ADM spending parameters for major activities so that, for example, 70% of the ADM budget will be spent on major projects, and 30% will go to minor enhancements and sustenance activities. The other key to a solid investment strategy is to categorize applications as value-adding, strategic, redundant or obsolete so that resources can be allocated accordingly.

3.  Know where your dollars are going. Knowledge of actual spend on sustenance, enhancements and development is essential in order to manage demand and track costs on an ongoing basis. A detailed labor recording identifying time allotted for break/fix, small enhancements, large enhancements, major development and other tasks keeps ADM spending aligned with investment strategy and planned expenditures. 

4.  Be clear, consistent, and flexible. Create well-defined roles and responsibilities for all IT and business stakeholders to sustain participation and drive accountability. Consistently utilize the demand management process across the enterprise to ensure compliance and comparability. Centralize decisions for larger investments, and decentralize decisions for the smaller investments to accommodate “emergencies” requiring rapid response.   

5.  Review and monitor on an ongoing basis. Deploy a common estimation model or a consistent set of estimation models across the organization. This will enable more reliable prioritization and more effective “go / no-go” decisions when evaluating requests for ADM work. Use periodic reviews to gauge process effectiveness and ensure that ADM spend is delivering business value. Involve the executive team to alert them of any deviations from the targeted investments and priorities. 

While demand management requires effort and potentially painful changes, the benefits to the business are significant. For more information, contact Doug Bunch.

About the author

Doug Bunch is a knowledgeable ADM professional who brings considerable experience in information technology (IT) to ISG’s clients in his role as Director. Doug has more than 30 years of IT experience with proven leadership in ADM delivery, designing solutions, global resourcing and delivery, transition management and risk management. He has deep global experience from working with ADM delivery teams in Europe, South America, and Asia, and his client base spans a wide range of industries.