Application Service Providers

Outsourcing business functions to an application service provider can save both time and money. Our checklist helps you select the right ASP for your needs.

September 16, 2005

5 Min Read
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Other factors to consider include the service provider's data center location, privacy and security, training, and support.

Everyone pays lip service to hosted support options. But with any on-demand offering, you need at least the basics. You'll want to dig a bit deeper, however, and determine whether that support fits your operational needs. If the ASP offers support from 8 a.m. to 5 p.m. and your organization is 24/7, you'll be left in the cold if something goes wrong at 2 a.m.

ASP Checklist

It's crucial to ask application service providers (ASPs) the following:

Also explore support for mobile workers. If John Q. Sales is on the road and runs into a problem, will he be stuck with proxy-based support, or can he direct-connect with the service provider's support staff?Carefully examine the ASP's support policy to ensure there are no hidden expenses that would outweigh the reduction in costs offered by outsourcing. Even though the ASP might provide "after hours" support, for example, the prices for that service may be double or triple the normal rate. Also consider the provider's support model. Will you have a dedicated single point of contact or team of contacts, or will you "dial blind" into the general support staff pool?

Training employees to use new software is a given, and it's necessary to provide training regardless of whether the software is hosted or in-house. Ask the provider about training options, and make certain the training offered fits your organizational needs. If your employees are used to self-training, does the provider offer guided tours of the software or easy "introductory" guides? Will the provider send a trainer to your site for hands-on training? Most important, is training an additional cost, or is it included in the package for on-boarding new customers?

It's Your Data: Handle With Care

When choosing to outsource an important business function, such as CRM or SCM, your foremost concern must be about your data. Your customer data is a prized possession, and you can't be too careful with it--both from competitive and regulatory-compliance standpoints. If someone manages to gain access and steal your customer data, you may be required to report the breach, and in some cases, you may incur heavy fines. And that doesn't even begin to address the issue of having your customer lists made available to the general public, which could be financially devastating.

Ask each potential service provider the following:

» Who would own my data? Because your data would reside on a remote server--perhaps a very remote server--you must determine ownership before you insert a single row of data into that remote repository. What is the provider's policy regarding the data if you should terminate your agreement?

» How would I move my data? You may want to migrate existing data, such as Excel spreadsheets or other flat files containing customer records, purchase orders and invoices, to the provider's system. To help determine whether the mechanism provided will be sufficient, ask if you can test it before you make a decision. Conversely, ask the provider how you can export the data from the system should you terminate your use of the application. Is the export in a standard format, such as CSV (comma-separated values) or Excel, and can transfers be done in bulk as opposed to per-record? Again, ask to test.

» How would I recover lost data? Providers will, of course, tell you their systems are redundant and they haven't lost a disk yet, but you still need assurance that should some disaster befall them, your data will be back online within some pre-agreed period. Question the provider about its backup strategy and whether you, as a customer, have control of, or input into, the schedule for automated backups. Ask about retention policies, and ensure that those policies meet your company's needs.

» Who will be able to see my data? Last but far from least, ask about the provider's privacy policy regarding your data. If your customer lists or documents are sensitive (and whose aren't?), you must be reassured that only those people you specify can view the data. You'll want to understand the provider's technical mechanisms for enforcing its privacy policy. It's great if the provider says no one but your employees will ever see your data, but if the provider has no way to enforce its policy, you can't be sure someone in the data center isn't peeking at your customer lists or reading your financial reports and quietly shipping the information off to your competitors.

There are certainly financial and staffing benefits to be gained by contracting for on-demand business application services, but to fully achieve outsourcing nirvana, you must choose your provider carefully. And without answers to the right questions before you sign on the dotted line, you could end up spending more than you anticipated and suffering technical headaches when you go to change providers. So do your due diligence before you commit.

Lori MacVittie is a Network Computing senior technology editor working in our Green Bay, Wis., labs. She has been a software developer, a network administrator and a member of the technical architecture team for a global transportation and logistics organization. Write to her at [email protected].

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