Wednesday, 25 June 2014 13:59

CIOs opt to outsource to overcome compliance challenges Featured

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Australian and New Zealand CIOs are more inclined to outsource mainframe application development and testing rather than use in-house resources, according to a newly published global survey.

When new legislation or industry regulation requires compliance changes to be made to an organisation’s mainframe applications, an average of one-third of CIOs in the ANZ region choose to outsource application development and testing.

The study, commissioned by Micro Focus, reveals that in comparison to other markets, the US leads, with CIOs there outsourcing an average of 62% of testing and development projects, while the UK sits at 40%.

In Australia and New Zealand, 50 CIOs and IT directors were surveyed by Vanson Bourne for Micro Focus, along with 540 around the world.

Explaining the compliance challenge, half of IT leaders across ANZ 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 (74%) confirm that their organisation’s documentation is incomplete.

The Micro Focus survey also reveals that when outsourcing mainframe application development and testing to comply with new legislation, 49% of ANZ CIOs contractually pass the legal responsibility for data protection and privacy requirements to their outsourcing partner, with a further 18% expressing a desire to do so.

According to Derek Britton, Director of Product Marketing at Micro Focus, the lack of clear or up-to-date records poses a problem in identifying and making compliance changes to the right applications, with almost a quarter (23%) of CIOs confirming they lack the capability to do application compliance change work in-house.

And, whether they outsource or not, almost all respondents (96%) believe that the ability to demonstrate the resilience of their current mainframe environment is important, with 88% believing this ability will only increase in the future.

“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, 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,” Britton says.

“Contemporary technology can establish repeatable, effective steps for updating core applications, driving efficiencies in the compliance projects at every key stage.

“In doing so, organisations 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.”


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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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