Outsourcing With an ASP: A Guide to Decision Making

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.

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. NH

Mark Counts is director of ASP Services, MDI Technologies, Inc., St. Louis, Missouri. For further information, phone (800) 552-9846. To comment on this article, please send e-mail to counts1102@nursinghomesmagazine.com.
By Howard Lange

The process one Texas nursing home chain went trough in making the decision

Last year, Christian Care Centers, Inc., began examining the need for upgrading its data network. In the process, the company-a Dallas/Fort Worth-area long-term care provider-considered the costs and benefits of adding additional network equipment, hiring new information technology staff and upgrading existing software. One of Christian Care Centers’ software vendors suggested as an alternative, however, that the three-campus organization consider using the services of an application service provider (ASP).

As readers might know, an ASP hosts, manages and deploys software applications from a central facility known as a data center. The data center is most often located at the ASP’s offices, which might be located in a different part of the state, or even country, than the business it serves. Typically, a business that uses an ASP has access to its software and data through the Internet for a monthly subscription fee.

“The cost savings can be realized immediately when you are able to eliminate the need for large computer rooms, equipment maintenance and upgrades, and highly trained network administrators,” says Mark Spencer, Christian Care Centers’ assistant vice-president of information technology. “With an ASP, you spend less with a monthly subscription fee to cover all those things, and you get the benefit of allowing your facility to focus on more important issues.”

In evaluating the ASP approach, Spencer knew that the software running on the company’s network was specialized to the long-term care industry; similar software would need to run on the ASP. Spencer found that a wide spectrum of specialized software applications were, in fact, available through ASPs that were well-suited to their needs.

Before placing Christian Care Centers’ confidential information on a server that was linked to the Internet, though, Spencer wanted to know how secure those data were from potential hackers, and how reliable his company’s connection to that central server would be. As it turned out, “We found that when it came to network security, most ASPs had a better system in place than we had in our existing system,” says Spencer. “It was clear that having a secure system for protecting the integrity of all our records is a top priority for the ASP industry as a whole.”

Spencer also noted that multiple options were available to ensure an extremely reliable connection to the Internet. Moreover, if that connection should ever fail, backup connection options were available as a safeguard.

The next step for Christian Care Centers was to identify the right ASP vendor for its needs. Questions Spencer asked included:

‘Does the ASP host the right applications for our current and future needs?
‘Does it offer an appropriate level of application and technical support?
‘Does the service level agreement (SLA) address to our satisfaction a level of performance and skills that is on a par with or better than we could obtain through internal resources?
‘Does the ASP’s business model ensure that it will be able to service its current cus-tomers while sustaining financial stability and manageable growth?
‘Can we interview the ASP’s customers?
‘Does the ASP provide technical support in the geographic areas where we have facilities?
‘Is the ASP specialized in any particular industry?

To Spencer, it was critical to find an ASP that specializes in long-term care and has experience hosting a wide array of industry-specific applications, including integrated clinical and financial software applications and niche applications, such as scheduling or rehab services documentation. In short, “We wanted to partner with an ASP who specialized in the long-term care industry. We knew issues related to HIPAA, patient confidentiality and other matters that were unique to us would come up, and we wanted to work with someone who has seen those issues before. Basically, we wanted someone who has been around a nursing home environment as much as we have.”

Now that its ASP relationship is up and running, Christian Care Centers has already noticed two basic advantages of ASPs, says Spencer: “Outsourcing the role of network administrator is much more cost-efficient than keeping that position on staff; we can enlist that help on an as-needed basis. Second, by outsourcing the routine network maintenance and troubleshooting jobs, it has allowed us to better focus on the overall company and where we’re headed.” NH

Howard Lange is vice-president of Virtual Care Provider, Inc., a Milwaukee, Wisconsin-based ASP with installations in 29 states. For further information, phone (877) 418-1827 or visit www.virtualcareprovider.com. To comment, e-mail lange1102@nursinghomesmagazine.com.

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