Making Sense of ASPs

In today's Internet economy, small to medium-sized business owners are experiencing rapid growth, leaving them little time to waste on day-to-day business operations. They are starving for a way to streamline day-to-day business processes without having to blow their budget on expensive, overly sophisticated ERP systems. In addition, businesses need the flexibility to quickly increase the size of their systems as their business grows in order to maintain strong customer relationships. As a result, these businesses are turning to Application Service Providers (ASP) as a cost-effective solution.

What is an ASP?
In simple terms, an ASP is any organization or third party that provisions software applications over the Internet, rented typically for a fee. ASPs host and manage the application from their site or a remote location. This includes technical support, maintenance and upgrades of the outsourced applications.

Overall, the primary attractiveness of an ASP to small to medium-sized businesses is the reduction in overall costs and that someone else can manage their day-to-day business operations needs while they remain focused on their core business. ASPs offer a wide breath of applications, ranging from enterprise resource and customer relationship management solutions to email applications. Choosing to outsource applications to an ASP may be the best way to ensure your valuable resources and budgets are allocated efficiently.

Benefits of using an ASP
ASPs save time and capital associated with employee training, software upgrades and installations. More importantly, ASPs give small to medium-sized businesses a chance to use the best-of-breed technologies – not having to settle on inadequate applications simply because they are within their budgetary limits.

Time Efficiency. With everything moving at Internet speed, how fast you get your business up and running or maintain customer responsiveness can make or break your business. ASPs enable businesses to get running in one-third to one-half the time required for more traditional implementations. In addition, with an ASP, companies can feel assured that someone else is responsible for making sure the applications are going to stay up 24/7, assuring you that your customers are taken care of.

Cost Efficiency. For small to medium-sized businesses, infrastructure costs can act like a vacuum, sucking up thousands of dollars to fund purchase of hardware and software applications. ASPs allow smaller business to have access to state-of-the-art technologies without ending up bankrupt. Instead of incurring the entire cost up-front, ASPs pricing are based on a per-user or per-employee per-month model. Therefore, application outsourcing distributes the cost over time.

Resource efficiency. Not only do business have to face the shortage of industry talent, there are the additional hassles of learning to use the applications. When businesses opt to implement a costly ERP application, they have to train their staff or themselves with the necessary skills to run them. Outsourcing to ASPs alleviates the need to staff and maintain an entire IT department or, if you don't have an IT department, train yourself.

Questions to ask when choosing and ASP
– How can I be sure outsourcing will work for my business?
– How do I choose the right ASP for my business?
– What software applications do ASPs offer?
– How confident can I be in the security of the ASP?
– What do I need to get started?

Think carefully before choosing to outsource to an ASP because not every application should be outsourced nor should every business outsource. However, outsourcing to an ASP generally saves time and money. The first step is to determine which applications you should outsource.

Companies typically outsource those applications that entail a high level of availability or technical expertise. Virtually any software application can be delivered through an ASP. The most common applications that business currently use include: email, e-commerce, enterprise resource planning (ERP), communications, customer relationship management and back-office solutions.

For example, payroll outsourcing contains highly confidential and sensitive data. If there is one mistake in the application's calculation, there is a significant risk of government fines, not to mention disgruntled employees. for an application that is as mission-critical such as payroll, business want to select an ASP that has reliable network performance and dependable security.

Security can be one of the most important issues when dealing with ASPs. ASP services vary widely in terms of service agreements and customer support. If security is of overriding importance, be sure to find an ASP with the knowledge and experience to handle mission-critical enterprise applications. Finally, ASPs will run on a Java-enabled Web browser. Any device, including a lap top, that supports a Web browser can access ASP services.

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