Reducing IT costs, countering the shortage of skilled workers and ensuring quality at the same time - with Application Management Services (AMS) and smart shoring strategies, companies can manage the balancing act between efficiency and innovation.
Increasing demands, tight budgets and empty labor markets: IT is under pressure. While digitalization and innovation are seen as the promise of the future, operating costs are rising at the same time - often unnoticed.
This is because many companies only calculate the obvious expenses, such as for hardware, software or licenses. However, the real cost drivers are often hidden: inefficient processes, long response times in the event of faults or a lack of specialist staff.
How can you make your IT more efficient under these conditions - without losing quality or control?
Understanding IT costs: The holistic view counts
More and more companies are focusing on the concept of total cost of ownership (TCO) - i.e. the total costs incurred over the entire life cycle of IT systems. In addition to direct costs such as license and operating expenses, indirect factors also play a role:
- Downtimes and malfunctions
- Productivity losses due to inefficient processes
- High maintenance & care costs
- Security incidents with high follow-up costs
- Time required to train new employees
- Rising recruitment costs due to shortage of skilled workers
The issue of recruitment costs and skills shortages in particular has become a strategic bottleneck in recent years.
The answer: Application Management Services (AMS)
The term "Managed ServicesWhat are managed services? Managed services can be defined as IT services... More" is often used as a collective term for outsourced IT services. At ISR, we refer specifically to Application Management Services (AMS) - a structured, flexible and scalable solution for the stable operation of business-critical applications.
AMS services offer you:
- Proactive maintenance and continuous monitoring
- Transparent services based on clear SLAs
- Access to specialized expert knowledge
- Flexible service models - individually customizable
In combination with a suitable shoring model, this not only reduces operating costs, but also frees up resources and strengthens the ability to innovate.
Interview: What are the biggest IT cost drivers - and which approaches really help?
We spoke to Jens Brettschneider, Head of Application Management, about the current situation in IT.
Where do you currently see the biggest challenges for companies when it comes to IT costs?
We generally observe three central cost blocks: Firstly, the system maintenance of IT infrastructures, which ties up enormous resources. Secondly, inefficient IT service management processes. And thirdly, technological complexity, which constantly creates new requirements. Another challenge is that often not just one of the cost blocks applies.
Many companies are desperately looking for IT specialists. Do you see this as an additional cost driver?
Absolutely. In practice, we see that IT teams are very busy and have to juggle complex requirements at the same time. The search for suitable specialists often takes months. At the same time, the pressure to integrate new technologies or keep systems up to date is increasing. This inevitably leads to bottlenecks - both in terms of time and money.
What strategies help companies to counter this?
Many now rely on external support - such as application management services or specialized partners. The advantage: recurring, time-consuming activities can be outsourced while internal teams concentrate on strategic or transformative tasks. What's more, external teams bring expertise and standardization to the table, which further improves quality. A recent PwC study also shows that 79% of companies therefore see managed services as an advantage in avoiding staff shortages.
Does shoring also play a role here?
Yes, definitely. Shoring is an effective way to sustainably reduce IT costs. Nearshoring in particular offers a good balance of cost benefits and cooperation at eye level - for example through cultural proximity and the same time zones. Offshoring offers even greater savings potential, for example for highly standardized services. It is important to choose the right model for the respective requirements - a hybrid solution is often ideal.
But outsourcing is also viewed critically. What are the risks?
There are - as with every business decision. A clear choice of partner, defined processes, a shared understanding of quality and, of course, legal and data protection-compliant framework conditions are important. If these factors are right, outsourcing works very well - and creates scope for innovation.
Many thanks to you, Jens, for your brief insight. So what do we take away from this?
Shoring models as an efficiency lever
By combining AMS with an intelligent shoring approach, operating costs can be flexibly controlled. The current models at a glance:
VS
VS
| Model | Advantages | Typical area of application |
|---|---|---|
| Onshore | Close proximity to the customer, fast coordination | Strategic tasks, governance |
| Nearshore | Cost-efficient, same time zone, high quality | Operation & further development |
| Offshore | Maximum savings potential, global scalability | Standardized services |
| Hybrid | Best combination of proximity, efficiency & scaling | Individual requirements |
According to IDC/COMARCH , 29% of companies in Western Europe already use smart shoring - a mixture of on-, near- and offshore models.
Conclusion: It's all in the mix
Whether rising IT costs, staff shortages or increasing demands for flexibility - AMS combined with an intelligent shoring approach creates exactly the balance that modern IT needs.
With a strong partner at your side, IT outsourcing becomes a strategic instrument for increasing efficiency, reducing costs and promoting innovation.
Application Management Services (AMS) in combination with an intelligent shoring model makes it possible to reduce operating costs, standardize processes and at the same time react flexibly to new requirements.
ISR supports you in doing just that:
- with structured IT operational analyses,
- ITIL service design workshopsfor individual strategies,
- customized service models,
- and 30 years of experience in application management, IT operations and outsourcing
Whether pure support, strategic further development or hybrid operating models - ISR offers the right solution (for every challenge).
Would you like to find out more? You can also find more information here or contact us directly and we will optimize your IT together with you.
Jens Brettschneider
Business Unit Manager
Application Management
jens.brettschneider@isr.de
+49(0)151 422 05 425
