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General Best Practices
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This is a particularly fine option for smaller companies that cannot afford the
cost of purchasing and implementing their own accounting software and hard-
ware, which can run over $100,000 for even a modest installation. It is also a
good alternative for any company that needs to switch to a new system in a hurry,
since the existence of a functioning software system eliminates the many imple-
mentation steps associated with system installation and testing. Further, any orga-
nization that wants to focus its attention on its key strategic values will like this
option, since it can use it to avoid investing valuable management time in the
oversight of the information systems department.
A good example of the uses to which ASP software can be put is the order
entry function. Traditionally, the sales staff mails, calls, or faxes orders to the
accounting staff, which then enters this information into the accounting system.
This approach results in lost or miskeyed orders, and therefore unhappy cus-
tomers. However, with an ASP, the sales staff can directly access the order entry
system over the Internet and enter their orders directly into it, without worrying
about any of the just-noted problems.
There are a few problems with ASPs. One is that they do not want to cus-
tomize their software for any but the largest customers, since their business model
depends on selling the same type of software product to as many companies as
possible. This is a particular problem for those companies that have so extensively
modified their computer systems for competitive purposes that a change to a more
“vanilla” package may seriously jeopardize their profitability. Another issue is that
most ASPs do not offer a complete solution that covers the functions of all key
areas of a company (as is now the case with enterprise resource planning systems
that are installed in-house). At the moment, the most comprehensive software
offerings are by Usinternetworking, which has available software for accounting,
finance, human resources, sales force automation, and human resources.
Another issue is the security of the company data that is stored at the ASP
location. There may be many companies using the software, and there should be
no way that anyone from one company can accidentally access the data owned by
someone else; these issues should be addressed by a set of security provisions
and guarantees that are outlined in a service level agreement (SLA). A final con-
cern is that any stoppage in the Internet connection to an ASP will bring down a
company’s computer access to its ASP-based software; this will become less of a
problem as Internet connections become more reliable.
More than 300 companies offer ASP services. Examples of this group are Oracle
Business Online, Asera, NetLedger, Usinternetworking, Corio, and mySAP.com.
When deciding on which one to select, a key factor is the range of different soft-
ware systems offered by each one. If a supplier only maintains software that has
limited applicability in a company’s field of operations, then a different supplier
may be the answer.
Cost: Installation time: