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A decision framework for SME Information Technology (IT) managers: Factors for evaluating whether to outsource internal applications to Application Service Providers

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  • Bayrak, Tuncay

Abstract

Businesses have been seeking new ways to improve their Information Technology that will better fit the company's needs with limited investment or even cost cutting. In order to achieve this many businesses have been turning toward Application Service Providers (ASPs). There are a number of factors supporting ASPs. ASP's can provide one service that connects multiple applications through one access point. The technology is very simple, straightforward, and easy to use for various businesses. There are also factors that do not favor ASPs, including service reliability, customization, integration, upgrades, and security issues. This study examines the paradigm shift from the traditional software model to the ASP model, and explores the favorable and unfavorable trends in ASPs. While the on-demand model seems to be a promising model for companies, there are certainly many decisions for a business to consider before making commitments to an ASP. Hence, this study aims to help IT managers evaluate each factor very carefully before outsourcing their internal applications to ASPs. It develops and provides a methodology for better IT decision-making with regard to ASPs which could be provided to other IT decisions as well. As “cloud” technologies, exemplified by ASPs, transform the world we live-in, better decision-making tools for small businesses will impact their success in the 21st century business world where SMEs can effectively compete with large businesses leveraging these services.

Suggested Citation

  • Bayrak, Tuncay, 2013. "A decision framework for SME Information Technology (IT) managers: Factors for evaluating whether to outsource internal applications to Application Service Providers," Technology in Society, Elsevier, vol. 35(1), pages 14-21.
  • Handle: RePEc:eee:teinso:v:35:y:2013:i:1:p:14-21
    DOI: 10.1016/j.techsoc.2012.11.001
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    Citations

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    Cited by:

    1. Khayer, Abul & Talukder, Md. Shamim & Bao, Yukun & Hossain, Md. Nahin, 2020. "Cloud computing adoption and its impact on SMEs’ performance for cloud supported operations: A dual-stage analytical approach," Technology in Society, Elsevier, vol. 60(C).
    2. Subramanian, Nachiappan & Abdulrahman, Muhammad D. & Zhou, Xiaolai, 2014. "Integration of logistics and cloud computing service providers: Cost and green benefits in the Chinese context," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 86-98.
    3. Goode, Sigi & Lin, Chinho & Fernandez, Walter & Jiang, James J., 2014. "Exploring two explanations of loyalty in application service provision," European Journal of Operational Research, Elsevier, vol. 237(2), pages 649-657.
    4. Subramanian, Nachiappan & Abdulrahman, Muhammad D. & Zhou, Xiaolai, 2015. "Reprint of “Integration of logistics and cloud computing service providers: Cost and green benefits in the Chinese context”," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 74(C), pages 81-93.
    5. Andra-Ileana Neicu & Anamaria-Cătălina Radu & Gheorghe Zaman & Ivona Stoica & Florian Răpan, 2020. "Cloud Computing Usage in SMEs. An Empirical Study Based on SMEs Employees Perceptions," Sustainability, MDPI, vol. 12(12), pages 1-14, June.
    6. Adjei, Joseph K. & Adams, Samuel & Mamattah, Lovestone, 2021. "Cloud computing adoption in Ghana; accounting for institutional factors," Technology in Society, Elsevier, vol. 65(C).
    7. Curry, Michael & Marshall, Byron & Kawalek, Peter, 2014. "IT artifact bias: How exogenous predilections influence organizational information system paradigms," International Journal of Information Management, Elsevier, vol. 34(4), pages 427-436.
    8. Rodríguez, Rocio & Svensson, Göran & Mehl, Erik Jens, 2020. "Digitalization process of complex B2B sales processes – Enablers and obstacles," Technology in Society, Elsevier, vol. 62(C).

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