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Cost Estimation of Transition Projects in Application Outsourcing: An Empirical ModelIWSM Mensura 2014 – Rotterdam
Nanne Wams, MSc.
Frank Vogelezang, MSc.
1
2What is this about?
Transition Projects in Application Outsourcing
4Application Outsourcing
IT Service for an application portfolio
− application management and support
− application enhancement
− systems maintenance
Est. market size 2014: € 49 Bln. (Gartner)
5Transition Project
Old situation− tasks performed by customer’s employees
− informal working process
− knowledge in peoples heads
− applications hosted by customer
New situation− tasks performed by IT service provider
− formal working process (controlling costs)
− knowledge transferable (documented)
− applications hosted by IT service provider
Estimation parametersTwo key cost drivers for transition projects explained
7Application Portfolio Size
No detailed information about application portfolio size is provided
Example portfolio 80 applications Complexity: Low 40% Medium 50% High 10%
(2)(5)(8)
: 0,4 x 80 x 2 = 64 : 0,5 x 80 x 5 = 200: 0,1 x 80 x 8 = 64
Total: 328
Cost estimation based on number of functional modules
8Team Experience
Team experience determines efficiency
Team experience Efficiency factor
Team has experience in similar projects 1,5
Individual members have experience in similar projects 1,0
Team has shared experience in similar projects 0,7
Proposed model for cost estimation
10Work breakdown structureOverview
Transition Project
1. Defining and organizing work processes
2. Application transitioning
3. Supporting proprietor’s organisational change
4. Installation and delivery of environments
5. Installation and delivery of software licenses
6. Project management
11Work breakdown structureWork processes
Transition Project
1. Defining and organizing work processes
2. Application transitioning
3. Supporting proprietor’s organisational change
4. Installation and delivery of environments
5. Installation and delivery of software licenses
6. Project management
How will we work together? Document templates For team and customer
Not dependent on portfolio size
Extremely dependent on team experience
12Work breakdown structureApplication transitioning
Transition Project
1. Defining and organizing work processes
2. Application transitioning
3. Supporting proprietor’s organisational change
4. Installation and delivery of environments
5. Installation and delivery of software licenses
6. Project management
Is dependent on portfolio size
Is dependent on efficiency factor, based on team experience Knowledge of applications
Out of heads, on to paper Learning
13Work breakdown structureApplication transitioning: efficiency factor
Transition Project
1. Defining and organizing work processes
2. Application transitioning
3. Supporting proprietor’s organisational change
4. Installation and delivery of environments
5. Installation and delivery of software licenses
6. Project management
Is dependent on portfolio size
Is dependent on efficiency factor, based on team experience
14Work breakdown structureSupporting organisational change
Transition Project
1. Defining and organizing work processes
2. Application transitioning
3. Supporting proprietor’s organisational change
4. Installation and delivery of environments
5. Installation and delivery of software licenses
6. Project management
Is dependent on the needs of the proprietor
Can differ from one application to another
Is dependent on team experience
Communication Explaining new processes Involving stakeholders
15Work breakdown structureSupporting organisational change
Transition Project
1. Defining and organizing work processes
2. Application transitioning
3. Supporting proprietor’s organisational change
4. Installation and delivery of environments
5. Installation and delivery of software licenses
6. Project management
16
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