|
ASP Selection Process
By Dawn Marie Yankeelov
Choosing to outsource part or all of your IT needs through an
Application Service Provider can present a daunting task of now
reviewing more than 630+ such named products worldwide. And, if
you really want to be relatively thorough in your competitive
intelligence you can visit The ASP Consortium website, a
not-for-profit advocacy organization, (www.allaboutasp.org) and
click on each member link. However, there is a less time-consuming
methodology to follow to narrow the field.
IT Consultants and related web strategists suggest you use the
following criteria for evaluating ASPs:
• Ascertain ASP’s primary business focus to make sure it meets
your standards for the horizontal or vertical products selected.
• Determine the ASP’s size, coverage, and ability to provide
service in the regions you need it.
• Evaluate the company’s operational excellence by discussing
their automation processes for additional users and their
available help documentation on products marketed.
• Review the technologies for (a) data management; (b) application
management; and (c) change control management.
• Make sure you know how your data is secured in their system
architecture.
• Know and understand the uptime you will require of a vendor and
read the Service Level Agreements from each ASP under
consideration.
• Discuss your company’s future growth with the ASPs of most
interest to determine if they will be able to grow with you.
• Gather all financial information necessary to compare and
contrast fee structures for installation of each desired
application, help desk support, additional provisioning of new
users, and monthly per user subscription fees.
“Choosing an ASP can save you money, but evaluate it as just
another IT choice. . . Your ASP relationship should also be looked
at in human terms. Where is this ASP going and what will it mean
to our future,” explained Bill Martorelli, Vice-President of
eServices and Sourcing for the Hurwitz Group, a consulting firm
based in Framingham. Mass.
Martorelli indicated that security issues are high on his lists on
evaluation factors. “It’s easy to show a physical approach to
security like a state-of-the-art data center, but an ASP customer
needs to ask about how his company’s data will be stored. Not all
of the customer’s data will end up on a dedicated server. What are
the possibilities of another customer having access to critical
business data?,” he pointed out. “Often times, it will be true
that an ASP can provide a higher-degree of security over than of
most customer’s internal systems,” he added.
There are numerous other selling points of an application service
provider, according to the Mike Dahan, director of eBusiness
Hosting for Breakaway Solutions which offers front-end ebusiness
consulting and high-end ASP solutions as a full service provider.
“First and foremost, with an ASP solution you should get a much
lower upfront costs than doing-it-yourself, and a predictable,
reoccurring charge you can afford.”
He cited three areas to make sure you investigate—an ASP’s people,
process, and technology. Topping his list for going with an ASP
model:
1. An ASP can be a quick way to add new applications without
spending the dollars necessary to outright own the system.
2. An ASP often provides a method to create a relationship with a
secure data center that should offer the stable, level of
infrastructure that most companies need.
3. An ASP provides ongoing application support generally with help
desk services, upgrades, and virus protection.
4. Implementation and integration answers are not always found
within your organization for new applications.
The complexity of what is defined as hosted application management
can be the real difficulty is finding the best ASP match for you,
continued Dahan. For example, Breakaway Solutions categorizes its
services this way: (a) Managed Hosting—racking and stacking
hardware and internet connectivity management; (b) Application
Infrastructure Hosting—support for the databases, web servers, but
not the applications themselves; (c) Application Hosting—all above
services mentioned including application hosting; and (d)
Additional Managed Services, such as enhanced security; and
enhanced monitoring.
The biggest “gotcha” that ASP users face, he explained, is the
24/7 support paradox. “Just because an ASP claims 24/7 support
that doesn’t mean that it is true round-the-clock availability. A
lot of companies put monitoring tools on the applications and the
hardware, however your contract only include steps to alert you
and not to fix the problems as they arise.” He added that many
companies may equip a help desk representative with a pager and
that’s your support. Dahan pointed out, “For a company to run a
true 24/7 dedicated help desk there must be a minimum of seven
employees in that area for round the clock coverage.”
Edina, Minnesota-based Cherry Tree & Co., which offers investment
banking services for IT firms, in a recent report emphasized the
changing value themes of ASPs and suggest that the wisest choices
for companies purchasing services will be in choosing those with
domain expertise. Companies like Peopleclick.com, and Employease
have made domain specialization their model. Peopleclick delivers
e-cruiting software that provides hiring process management, and
applicant tracking functionality to HRP professionals who are
managing high volume hiring campaigns, including Ericsson, and
Morgan Stanley.
Employease offers a business-to-business network with access to
human resources, benefits, and payroll applications via the Web.
The network connects employees, insurance companies, managed care
organizations, and other relevant service providers and has more
than 1,000 clients.
ASPs as a whole will look to offer what customers want in the way
of cross-application integration for turnkey ecommerce solutions
and wireless access to devices via handhelds or smart phones.
Mobile computing will become another ASP way for an end user
deploy its applications. Several companies have already begun to
offer this type of service. A New York City-based ASP called Mi8
Corporation offers wireless connectivity to its Microsoft Outlook
& Exchange mailbox functions through its Mi8’s Wireless Palm
Service. Using a wireless Palm device, connected to a wireless
network, users can send and receive email, view and schedule
appointments, and manager their contacts and tasks from anywhere,
anytime. Mi8’s service supports PDAs, the Palm VII and the Palm V
and Vx with wireless cradle from Palm Inc.
As ASP players differentiate themselves even further, it will
become more important to know where an ASP company begins and ends
its services. Consultants say that pricing structures will vary
widely due to emphasis of the company. Martorelli of the Hurwitz
Group indicated that, “In this marketspace, there’s not a great
deal of thorough total cost of ownership analysis yet. I think it
is plausible to believe widely-accepted numbers of 20 to 40% cost
savings with an ASP implementation.” Most pricing choices will
include a monthly fee per user, but buyers beware of consulting
fees, infrastructure investments, and connectivity charges that
come along with subscriptions.
Infrastructure ASPs may call themselves Managed Service Providers
or Infrastructure Management Providers and provide an additional
layer of network and data center management software between ASPs
and their Web hosting partners. Key areas of infrastructure
management for companies like DataReturn, and Broadwing, may
include: network and application monitoring and testing; database
architecture and management; systems and network management and
capacity scaling and load balancing with security.
The Full Service Provider, such as Breakaway Solutions and
Millennia Vision Corporation, is often an ASP that started as an
IT services firm and offers an end-to-end solution encompassing IT
consulting, application development and hosting, systems
integration, and ecommerce builds.
Internet Business Service Providers focus on delivering web-based
solutions in a hosted model, such as Agillion, and other providing
basic messaging services.
An ASP aggregator, such as Jamcracker, offers multiple platform
solutions with some opportunity for a small to medium-sized
business to get the best-of-breed applications while avoiding the
need to manage multiple hosting contracts and systems. There is
also a single point of contact for technical support issues.
Vertical Service Providers are ASPs that specialize in specific
industries, such as Andalon in legal and health care services.
Once the type of ASP services is known and the capabilities are
defined, the final measure in choosing an ASP, may well be its
service level agreements. The ASP consortium has a short report
available that discusses what to ask in detail. A company prepared
to use an ASP must know just what they mean by “uptime,” and what
will happen in the event of “downtime.” Many ASPs are willing to
deliver 99% uptime, but the real task is in understanding the
definitions in the SLA. Potential ASP clients should not be afraid
to ask for addendums and make adjustments as they see fit.
Martorelli of the Hurwitz Group said, “In the world of SLA
witchdoctory, an ASP can usually meet an SLA terms, but this may
not meet the customer’s needs. The notion that penalties take the
place of performance is cold comfort to the end user. Every SLA
should be reviewed with on eye on plausible escalation.”
|
