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Run and Transform: Application Services and the New Sourcing Paradigm

Once a peripheral topic at board meetings, technology is increasingly becoming a core element of business strategy and corporate identity. “Google” as a verb, “digital” as a noun and the “uberification” of everything underscore the extent to which technology has disrupted and redefined the way business leaders approach their jobs. In this environment, effective IT outsourcing is more important than ever, and while cost reduction remains a priority, enterprises increasingly focus on leveraging technology to aid competitive differentiation and foster innovation, open new channels of service delivery, expand and penetrate customer base and foster revenue growth.

In response to these imperatives, many organizations are adopting a management approach to application services that makes a specific distinction between “Run the Business” application services on the one hand, and “Transform the Business” services on the other. Characterized by different operational and organizational structures as well as specialized processes, methods and metrics, this “bi-modal” model is designed to optimize the security and stability of IT operations, while at the same time enabling agility, flexibility and rapid response to changing business requirements.

This ISG white paper, co-authored by Wipro’s head of Application Management Services, examines key trends shaping the “Run” and “Transform” streams of IT organizations, focusing specifically on implications for sourcing strategy as they relate to Application Development and Maintenance Services.

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