On-premise implementation or On-demand managed application services?
This is a question which is continuously raised, as there is a need to optimally utilize the available resources and align them to business goals. The approach to go for on-premise implementation or on-demand managed application services has to be evaluated on two important dimensions – Business strategy and IT Architecture strategy. Unless the evaluation of these offerings aligns positively in these two dimensions, the next level evaluation of people, application and hardware costs to come up with the business case for either should not be considered.
Business strategy alignment would require evaluation against cost effectiveness in overall IT Management for business function considered, compliance to various regulatory guidelines, business continuity and also reducing the complexity of organization IT architecture.
IT architecture strategy alignment would call for an evaluation against application integration and interoperability, data integrity, data ownership, adherence to organization integration principles and deployment of proven technologies.
It is very important that business strategy take front seat and IT strategy continues as an enabler. The shift needs to be from a rigid and structured application landscape to a more agile and flexible application landscape.
per my suggestion a mix of both: on-premise implementation of applications which may form the core and a set of managed application services in a on-demand mode as flanks for non-core business functions would add that extra edge in a competitive market space for a organization. A organization where the ERP continues to be on leading vendors and is on-premise while various non-core business functions are enabled by a set of on-demand managed applications would give the organization required flexibility and agility to respond to market needs.
