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Outsourcing With an ASP: A Guide to Decision Making

November 1, 2002
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Done right, this can cut IT costs By Mark Counts
By Mark Counts 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 proc-essed 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 hard-wired 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-1 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.

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 or-ganization, 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 ven-dor's reputation for customer service is also very revealing.




A larger server will always help out a lot.