Outsourcing with an ASP: A guide to decision making. (Feature Article).

An Application Service Provider (ASP) can be an attractive outsourcing option for many reasons. Take a close look at your organization and determine which of an ASP's benefits can provide real value. For large organizations, the ability to manage multiple facilities and access their data without the expense of networking and/or travel is significant. For smaller organizations, an ASP can eliminate the need for internal IT personnel to handle backups, updates and maintenance.

The benefits of an ASP that apply to your organization must be weighed against the costs and other considerations involved. First, the ASP vendor charges for access to the software--usually a set monthly rate. The rate usually includes technical support, although some vendors might assess additional charges for each support call. Additional fees for updates and enhancements, as they become available, might also apply. Discuss with prospective vendors any and all charges that will be incurred each month, as well as the term of the contract, before you sign an agreement.

As with any other type of software, there will be specific hardware requirements that must be met to effectively use ASP technology. Compare these requirements to your current systems so that you can include any necessary upgrades or license fees in your cost analysis.

Specific Considerations

You must have an Internet connection or private connection directly to the ASP. Several connection options are available, depending on your location. Each option provides a different level of bandwidth (the speed at which data travel), with varying costs associated with this. Bandwidth of at least 128K is generally recommended. Connectivity options include:

Dial up. Your computer uses a modem to dial into your Internet service provider (ISP) over a regular telephone line. This method is generally inexpensive, but it is not recommended for use with an ASP because of the amount of data being processed and the complex transactions that are required to operate long-term care facilities.

DSL. Short for "digital subscriber line," DSL allows your computer to be hardwired to an ISP through a dedicated telephone line. Although this option is reasonably priced, its speed and efficiency depend on the proximity of your facility to the telephone company's "switching station." The farther you are from the station, the more technical difficulties you are likely to encounter.

Cable modem. Through this option, your computer is hardwired to operate over a cable television line. This option is available through your television cable service or other ISPs. Generally, they are reasonably priced, but they are also vulnerable to technical difficulties. These difficulties can occur because the cable TV infrastructure is designed to broadcast TV signals in just one direction--from the cable company to homes. In contrast, the Internet is a two-way system; data must flow back and forth between the client and the host server. Also, it is still unknown whether the cable TV networks could handle the traffic created if millions of users began using the cable system for Internet access.

T-1. This option is considered the fastest and most efficient. With a T-l line, your computer/network has a dedicated, direct connection that provides high-speed access to the Internet or to the ASP itself. This option is generally very reliable, but can be expensive.

Frame relay. With this option, your computer/network shares a direct, high-speed connection to the Internet or to the ASP itself. This option is also quite reliable and much less expensive than a T-1.

ATM. Short for "asynchronous transfer mode," this option is a relatively new network technology based on transferring data in cells or packets of a fixed size. ATM is considerably more expensive than the other options and is, therefore, typically used only by large organizations or service providers.

Platforms

Another very critical consideration is the software your facility will use via the ASP. There are two platforms available to deploy software over the Internet. Carefully consider the platform that is best for your organization.

Web-enabled software. In this setting, the ASP host uses a "terminal services/thin client" environment to allow clients to access software applications through a "portal" via the Internet. Once accessed, the software operates in the same way it would on a local network. This environment is ideal for delivering software that requires a high level of user interaction; however, there might be additional licensing fees required to access the "private network."

Web-based software. In this environment, the functions of the software run across the Internet in the form of a Web site. Because the information has to travel across the Internet to be processed, this could cause your software to run slower, making large or complex transactions quite cumbersome. The cost might also be increased if the software vendor maintains the Web-based program in addition to one designed for local network installation.

Choosing a Vendor

When you're satisfied that an ASP is a good fit for your organization, evaluate specific vendors. First, take a look at a vendor's track record. How long has the company been in business? How long has it been in the ASP business? How many long-term care ASP clients does it have? Can the company provide references? The vendor's reputation for customer service is also very revealing.

Second, find out who will actually provide the ASP services. Many long-term care software vendors offer an ASP delivery option for their software, but most outsource the ASP service to a third-party vendor. If this is the case, who will be involved in the ASP agreement? Who is responsible for technical support? Will you have access to the ASP vendor, or are you dependent on the software provider only? Scrutinize the third-party ASP vendor as well as the software provider.

Next, find out about the ASP operation. The following areas are important for the security and integrity of your data, and can affect your organization's efficiency:

Redundancy/backup procedures. Does the ASP employ redundant servers? How often are backups performed? How long is backup data maintained? Does the company have a disaster recovery plan in place? How often is this tested?

Security. What security measures are in place to protect the system and your data (i.e., firewall, password protection at different levels, etc.)? This should include physical, as well as technical, security measures. Are the servers located in a secure, fire-safe area?

Maintenance. How often is maintenance performed on the network/server and/or database? When does this maintenance usually take place (i.e., during or after normal business hours)? Does maintenance require complete system downtime? How far in advance will you be notified of this downtime?

Monitoring. Does the ASP vendor monitor performance of bandwidth levels, network speed, processor slowness and memory slowness? All of these can be important indicators for security and client efficiency.

The Bottom Line

For most organizations, the bottom line is the bottom line. You can save a lot of money, which would be spent if you purchased, implemented and maintained software on your own network, simply by allowing an ASP to take on the majority of responsibility for these IT issues. But investigate the ASP you plan to employ and understand how it does what it does. If the company can't or won't explain it to you, consider a different option. Explore your bandwidth options and expenses before you make the ASP decision. Most importantly, partner with a reliable company, because your business depends on it.

Mark Counts is director of ASP Services, MDI Technologies, Inc., St. Louis, Missouri. For further information, phone [phone]. To comment on this article, please send e-mail to [e-mail].