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The Roar of ASPs, the Hum of the Crowd

May 27, 2000
Related Topics: Human Resources Management Systems (HRMS/HRIS), Featured Article
An ASP(Application Service Provider) manages and delivers application capabilities tomultiple entities from a data center across a wide area network." —ASPConsortium 1999

That's thedefinition of a delivery model that has the potential of revolutionizing theway software is provided. If our in-basket is any indication, there's a newHR-related ASP announced almost daily.

The potentialbenefits of this model are significant. A company can expect to take about ayear to 18 months to implement an enterprise management system. There are ahost of issues that need to be resolved that involve the requirements ofvarious departments, and HR may not always come out with a winning hand ascomes to the selection of vendors or applications when departments jockey forlimited capital and IT resources.

An ASP canprovide HR an alternative to intra-departmental budget battles. By outsourcingtheir core applications, HR can reduce implementation time and, in smallercompanies, access software that's usually within the budget of largercompanies. For fast-growth organizations, scaling up to meet demand is mucheasier. Budgeting is more predictable as well, because services may be providedon the basis of a fixed monthly fee. The ASP service provider is responsiblefor technical support and software upgrades, so the burden on internal ITresources is reduced.

WithWeb-delivered applications, employees are able to access appropriate featuresfrom any location. ASP providers should offer popular applications includingPeopleSoft, SAP, SAS, and others. When considering an ASP, it is important todetermine if the provider is offering a truly integrated service by controllingthe data center and the application software. Service should be provided underone contract, with one provider. There should be no capital investmentrequired. Be sure it is understood that payment of service fees is contingentupon delivery of services according to contract performance specifications.It's also important to examine the provider's financial strength and to contactcurrent users.

Making theconceptual leap from an enterprise product you own and guard is another matter.Not everyone is prepared to park the company's most sensitive data on athird-party site. It still may make sense to jump, but knowing where you landis all the more critical.

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