New Delhi, India, June 25 2014: When new legislation or industry regulation requires compliance changes to be made to an organization’s mainframe applications, 39% of CIOs on average choose to outsource application development and testing today. The US leads the charge, outsourcing an average of 62% of testing and development projects. Germany outsources the least at 26%, while the UK sits at 40%. That’s according to an independent global research study undertaken by Vanson Bourne and commissioned by Micro Focus (LSE: MCRO.L), which polled 590 CIOs and IT directors from nine countries around the world.
The Documentation Problem
Explaining the compliance challenge, more than half of IT leaders (55%) say that it is highly likely or certain that the original knowledge of their mainframe applications and supporting data structure is no longer in the organization. Similarly, nearly three quarters (73%) confirm that their organization’s documentation is incomplete. This lack of clear or up-to-date records poses a problem in identifying and making compliance changes to the right applications. In fact, 44% of CIOs confirm they lack the capability to do application compliance change work in-house.
Whether they outsource or not, almost all of respondents (98%) believe that the ability to demonstrate the resilience of their current mainframe environment is important, with 91% believing this ability will only increase in the future.
The Legal Benefit of Outsourcing
When outsourcing mainframe application development and testing to comply with new legislation, 60% of CIOs contractually pass the legal responsibility for data protection and privacy requirements to their outsourcing partner. A further 16% expressed a desire to do so.
Commenting on the research results, Derek Britton, Director of Product Marketing at Micro Focus said: “On-going legislative changes have resulted in an array of new compliance measures such as ISO27002, Basel III, FACTA and SEPA. In order to support compliance requirements, organizations need to change and update their core business applications. The complexities of missing code documentation, constrained resource pools and data privacy risks mean companies are frequently turning to the outsource market for this work.
“Contemporary technology can establish repeatable, effective steps for updating core applications, driving efficiencies in the compliance projects at every key stage,” continued Britton. “In doing so, organizations are able to more effectively balance lights-on and innovation efforts – either directly or via their outsourcing partner – enabling development staff to execute changes more efficiently, while managing the impact of the changes they make.”
The independent research survey was undertaken by Vanson Bourne in November 2013. It covered 590 IT decision makers in nine countries including UK (100), France (100), Germany (100), USA (100), Brazil (100), Australia (35), New Zealand (15), Hong Kong (15) and Singapore (25). The respondents were from mainframe organizations with 501+ employees, covering multiple industry sectors.
About Micro Focus
Micro Focus, a member of the FTSE 250, provides innovative software that allows companies to dramatically improve the business value of their enterprise applications. Micro Focus Enterprise Application Modernization, Testing and Management software enables customers’ business applications to respond rapidly to market changes and embrace modern architectures with reduced cost and risk. For additional information please visit www.microfocus.com