CIOs need to outsource more of the applications they need built for their businesses, says Fujitsu.
A study by the company shows that applications make up 40-60% of most IT budgets, but are yet to be outsourced significantly, unlike more traditional forms of infrastructure outsourcing, which are widespread and mature.
Fujitsu points out that money can be saved by outsourcing applications. John Hanley, managing director, said, "This is the next big area that CIOs are under pressure to address. The application outsourcing market is not as developed or as advanced as infrastructure outsourcing, but huge cost savings can be realised. However, the costs of getting application outsourcing wrong can be very high - and potentially damaging to an organisation's ability to do business."
Hanley suggested involving other internal managers - especially the chief financial officer - in the decision process early on. It was also important to have a deep knowledge of the business and to review the process continually, he said.
Mike Cope, former CIO at Virgin Atlantic who took part in the research, said, "The CIO knows his or her business best, but IT providers can help. Where the IT supplier can, and should, add value is by providing the tools and support to CIOs to help them make the right decisions around application outsourcing. A good IT service provider should be as motivated as the client to avoid taking on unsuitable applications."