CeePrompt! Computer Connection

Originally published Monday, July 10, 2000

ASPs, ERPs and why they matter

It's once again time to challenge the acronym snobs who delight in playing the, "Let's Make Them Feel Stupid" game. Here's an acronym-laced sentence guaranteed to bring befuddlement and self-doubt upon the average computer user: "As more IT shops look to ASPs to provide ERP applications, the balance of customer power is shifting into the hands of ASPs."

IT is an easy one, Information Technology, but ERPs and ASPs? An ERP usually requires an "excuse me," while an ASP was the demise of Cleopatra. In the c urrent context, ASPs may very well be the undoing of ERPs unless their business models change. Confused yet?

Enterprise Resource Planning (ERP) is just a new spin on well-established business practices. For years, businesses have relied on third-party vendors to develop and deliver programs for customer and product management as well as traditional bookkeeping modules such as accounts payable, receivable, payroll and general ledger.

Finance, banking, legal, medical, insurance and construction industries, to name a few, all rely on proprietary programs developed specifically for their industry needs. Traditionally, however, these ERP models have been in-house systems based on a client-server model with modem support for upgrades and data transfer. These models require a significant capital investment in hardware, software, and technology staff, and program upgrades invariably require accompanying hardware upgrades too. Many businesses are now discovering their older DOS and UNIX-based systems are no longer supported by the ERP vendor, necessitating an expensive network overhaul to a newer, Windows-based model.

Enter the ASP as the wave of the future. An Application Service Provider, or ASP, offers businesses the option of hosting their programs and data offsite at an ASP data center for a monthly fee. This seriously cuts the capital costs of ongoing hardware and software upgrades as well as expensive IT professionals to maintain the systems.

This network-based model uses Internet protocols and a browser interface to accomplish everyday business tasks from accounting to customer service. The ASP provides all backup, network management and necessary upgrades. Because this model utilizes Internet protocols, data can be easily accessed from a variety of platforms, from any location.

The obvious downside issues of data migration, privacy, security and ownership are sure to cause most businesses to adopt a wait-and-see attitude, but the ASP players are big and destined to change the traditional model. Oracle, SAP, Seibel, PeopleSoft and J.D. Edwards Co. are among the ASPs vying for control of the new ERP model.

With the skyrocketing costs of Microsoft Office licenses, you can expect office suites too will be available as network-based applications. For a taste of the future, you can freely download StarOffice 5.2 from Sun Microsystems Web site www.sun.com. With StarOffice 5.2, you'll find word processing, spreadsheet and database modules that integrate MS Office files with ease. (If the download is too large for your Internet connection, you can order the program on CD for $39.95.)

On a more personal level, you may already be utilizing an ASP if you have customized Yahoo!, HotMail, Excite or another Internet portal for personalized services such as e-mail, stock portfolios or calendars. These are Web-based services that can be accessed from any computer connected to the Internet.

For example, my daughter is traveling in Europe this summer, but before she left, she established a free Yahoo! account. Now, she pops into post offices, Internet cafes, museums or retail stores throughout Europe, logs onto Yahoo! and sends off a quick post. It's faster than regular mail and infinitely cheaper than a phone call. At most, she has to pay a nominal fee to use the computer station. Yahoo! is the ASP delivering a network-based program, e-mail, in this case. Just imagine if all your desktop software applications could be accessed so easily from anywhere!

ASPs will have an uphill battle overcoming traditional ways of thinking, but as it becomes impossible for businesses to keep pace with technology changes, network-based ERP models are eventually going to make good sense.

Cathi Schuler owns a computer literacy training/consulting company, Cee Prompt! She is a co-author of computer textbooks and can be reached by e-mail at cschuler@uop.edu or cschuler@ceeprompt.com or by mail c/o The Record, P.O. Box 900, Stockton, CA 95201. She is on the Internet at: http://www.ceeprompt.com. Click here for past archived columns.

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