Making the ASP Decision

Organizations considering an ASP relationship should work through the following steps:

• Consider opportunity cost gain - the opportunity cost benefits to ASP hosting, such as being able to free IT personnel to focus on operations or projects more fundamental to the company's core business, is key to ASP outsourcing. Customers need to clearly determine how important those are for their organization.
  
  
• Determine the level of uptime (defined as when the system is available to the user community), and make sure that the ASP has proven to satisfy that level. Clearly the higher the availability requirement, the more challenging it is for the ASP to deliver.
  
  
• Consider the on-going operational expenses by determining the "fully-loaded" costs of the support infrastructure (personnel, service contracts, administrator training, etc), plus server costs (hardware procurement depreciated on a three year cycle, plus hardware maintenance). This will give a basis for comparing ASP pricing.
  
  
• Determine the business requirements for ASP services. If needs are basic, those needs will be more readily met by ASPs. For more complex needs, customers will need to do more work to ensure that the ASP is capable of delivering them.
  
  
• Contemplate the IT personnel situation. If hiring adequate personnel is difficult, then ASPs should be seen as one vehicle for alleviating personnel shortage issues.
  
  
• Contemplate the status of the existing infrastructure. Organizations with an aging host system that needs upgrading should calculate the cost for planning and deploying a new system, as well as the drain on existing personnel resources. The same advice holds for organizations without an online system in existence. This should be factored against the cost of an ASP relationship.
  
  
• Consider the security requirements. Some extremely security conscious organizations may have prohibitions on outside hosting of proprietary content.
  
  
• Consider the degree to which the application requires customization and has application level dependencies. High degrees of customization and dependencies need to be negotiated with the ASP, making the process more complex. Along the same line, clients and protocols - especially in regards to offline/online capabilities - must be taken into consideration in structuring the hosting arrangement.

Upon contemplation of each of these issues, one of three results will occur: there will be a clear predisposition toward, or against an ASP relationship, or there will be a gray area where the path is unclear. In gray area cases, organizations may want to consider many of the ramifications covered above for further clarification.

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