Metamorphosis established a clearly defined model of support activities and set a baseline of service costs that allowed the Application Support team for a large public sector organization to build a case for change to address funding shortfalls.
Client: Our client, an IT application support team in a large public sector organization, supports a portfolio of more than 500 applications for over 25 business unit clients.
Situation: Our client had growing concerns about funding shortfalls for new applications coming into production and increasing the demand for support services. At the same time, very little capacity was being gained from decommissioning applications and there was a freeze on budgets. They requested our assistance to build a model of support costs to use in assessing the impact of changing demand for application support down to the business unit level, and to develop a strategy to address the funding gaps.
Approach: Working with the client's team, we established a clear baseline of support costs using our activity-based visual Cost Mapping methodology. Using the cost model enabled the Application Support team to estimate clearly the net impact of changes in support demand over a three year period. To consistently estimate future support costs, a model was developed and piloted using existing application data. The cost analysis and support estimating model provided the evidence to make recommendations for funding changes. The recommendations were presented to the Executive Steering Committee for review and approval.
Results: Using the Cost Mapping methodology enabled our client to quantify the previously unknown cost of new applications transitioned into production at 10 percent of their annual support budget. They were also able to more precisely estimate the future cost impact of application portfolio changes at the enterprise level and out to the business units. The project was successful in gaining executive support to move towards more direct client funding for enhancements and to provide maintenance-only base funding for existing applications.