Application service providers (ASPs) regularly debate over how much customization should be included in their services. If there is too much customization in an out-of-the-box model, then the ASP will begin to resemble not a true ASP, but an application development service. If there is not enough customization, then the ASP will have the potential to lose customers.
Integration is often paired with customization as a way for ASPs to attract and retain customers. A customer that is unable to smoothly integrate outsourced applications with in-house ones will be understandably skeptical about handing over all in-house applications to an ASP. However, with emerging technologies like extensible markup language (XML), ASPs are finding it easier to offer full integration services to customers.
High levels of customization and integration are not always the answer, since the long-term costs of maintaining these applications can be pricey.
Recently, Steve Dryden, senior vice president of strategic development at Agilera.com, an ASP based in Englewood, CO, answered a few questions for TechRepublic about ASP services. In the interview, Dryden offers a glimpse in the realities of ASP customization.
TR: Many companies need to alter applications before they use them. If the company alters the solution, who owns or maintains the code? The ASP, or the customer?
Dryden: Agilera realizes that many applications have been modified in the past, even if they are part of a current enterprise resource planning (ERP) solution. The customer maintains ownership of the custom code.
Any new custom code must be subject to Agilera’s change control process before it is placed into production. Once in production, Agilera will support it as any other application, excluding program maintenance.
TR: Business process needs change frequently. If the application is modified, how will this impact future upgrades?
Dryden: Whether hosted by Agilera or not, the process necessary to re-implement custom changes will inherently make software upgrades more difficult.
TR: What necessary steps should be taken to make the process of upgrading run smoothly?
Dryden: We recommend that all changes be made via the use of the software package application program interfaces (APIs). In addition, the use of enterprise application integration (EAI) tools often simply eliminate the need to perform many custom code projects.
Agilera, a joint venture between CIBER, Inc. and Verio, Inc., began hosting enterprise applications under the name CIBER Enterprise Outsourcing in 1996, making them old sages in the ASP market.
Agilera, which is the first joint-venture ASP, is an enterprise-class ASP that is able to provide the reach and resources needed to excel in the ASP market, providing solutions in hosting ERP software, e-CRM, and e-business fulfillment.
The outsourcing company typically rents its service to companies with revenues of $150 million to $2.5 billion.
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