Executive Summary (This is a document excerpt)

Recently, we conducted interviews with IT staff at a global logistics firm to learn about their efforts to control IT spending and rationalize application management. Like many large organizations with a large portfolio of applications, the support costs at this firm had reached a breaking point, yet it lacked visibility into the drivers of cost that would pinpoint obvious fixes — except for one case. Several years prior, the firm had outsourced the development of a core business application, and then allowed support for the application to remain with the outsourcer. The annualized bill for the operation and support of this particular application was almost $14 million. The firm used an application mining tool to guide its decision to insource, cutting the bill down to $5 million. The firm was able to restore much of its lost application knowledge and improve its scoping and estimation capabilities.

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