Are Managed Services the ‘Holy Grail’ for App Outsourcing?

Principal Steven Kirz serves as the sole expert resource in this piece about taking a managed service approach to application development and maintenance outsourcing. Sample excerpts: “Once upon a time, application development and maintenance (ADM) outsourcing was done via the staff augmentation or time and materials model. It was the proverbial lose-lose. Customers could end up paying more than they should and providers could wind up with slim margins. Over the years, the preferred model for ADM outsourcing matured became the fixed-fee contract, whereby clients pay a set amount of money for specific amount of work. Clients liked fixed-fee deals because they felt they were more likely to get what they paid for and suppliers appreciated them because they could appropriately staff their deals and increase their margins a bit…However, in recent years attention has shifted to the managed service model. Managed service pricing is seen as the ‘holy grail’ of ADM pricing models, says Steven Kirz, principal with outsourcing consultancy Pace Harmon.’…‘Managed service deals focus on meeting the client's exact requirements regardless of how a supplier chooses to staff and service it,’ Kirz says.”

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