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CIOs outsource mainframe app development to meet compliance needs

Antony Savvas | June 27, 2014
Internal people with right skills leave over time.

CIOs are increasingly outsourcing mainframe application development and testing to overcome compliance challenges, according to research.

When new legislation or industry regulation requires compliance changes to be made to an organisation's mainframe applications, the research found 39 percent of CIOs choose to outsource application development and testing.

The US leads this charge, outsourcing an average of 62 percent of testing and development projects. Germany outsources the least at 26 percent, while the UK sits at 40 percent.

The figures are from independent global research undertaken by Vanson Bourne and commissioned by app development and testing software firm Micro Focus, which polled 590 CIOs and IT directors from nine countries around the world.

Explaining the compliance challenge, more than half of IT leaders (55 percent) 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 organisation.

Similarly, nearly three quarters (73 percent) confirm that their organisation'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 percent of respondents confirm they lack the capability to do application compliance change work in-house.

When outsourcing mainframe application development and testing to comply with new legislation, 60 percent contractually pass the legal responsibility for data protection and privacy requirements to their outsourcing partner. A further 16 percent expressed a desire to do so.

Derek Britton, director of product marketing at Micro Focus, said: "Ongoing 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, organisations 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."


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