A sourcing decision model for application maintenance services

Abstract

Application maintenance services consume a high amount of time and resources every year. More than half of information technology's budget is spent on maintenance of services. The companies outsource application maintenance services in order to reduce cost of maintenance. Vendors provide application maintenance services by selecting the most suitable delivery model from the available options such as onshore, nearshore, offshore and blended models. A service provider does not have a model that helps in selecting the right delivery model. Currently, the best practice of the industry for model selection is based on the experience and skills set of the team or individuals involved in the decision-making process. In this paper, we propose a sourcing model for making outsourcing decision of application maintenance services based on the Analytic Hierarchy Process. The proposed model helps the decision makers in the selection of most suitable delivery model by determining the ranking of alternatives and identifying the preferred alternative. The model is mainly based on the identified set of important parameters that affect sourcing decision in the global delivery perspective. These parameters were identified during the research work at Stockholm University, Sweden and IBM Sweden. The proposed model is tested and validated with the application maintenance service experts' values at IBM Sweden.