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Application Service Providers: Will They Succeed?

Author

Listed:
  • Chris Bennett

    (SAP Australia Pty. Ltd., Northside Gardens)

  • Greg T Timbrell

    (Queensland University of Technology)

Abstract

This article examines the likelihood of success for application service providers (ASP) drawing from the outsourcing literature, interviews with ASPs in the USA, and the experience of Bennett who has held leadership roles in ASP and ERP in South East Asia. This article proposes that application service providers (ASP) rent packaged software, predominantly over the Internet. It shows why organizations might employ the ASP model to manage their enterprise resource planning systems. Using a framework adapted from Lacity and Hirschheim, it demonstrates that the financial, business, technical and political reasons why organizations evaluate outsourcing can be applied to ASP model. While ASPs generally target the mid-market, large enterprises are also using ASPs to introduce new ERP modules. Potential users of ASP should regard the risks of outsourcing prior to entering into business arrangements. This examination concludes that there are strong financial and technical reasons for adopting the ASP model and therefore it has potential to succeed.

Suggested Citation

  • Chris Bennett & Greg T Timbrell, 2000. "Application Service Providers: Will They Succeed?," Information Systems Frontiers, Springer, vol. 2(2), pages 195-211, August.
    • Handle: RePEc:spr:infosf:v:2:y:2000:i:2:d:10.1023_a:1026552208171
    DOI: 10.1023/A:1026552208171
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    References listed on IDEAS

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    1. Benoit Aubert & Michel Patry & Suzanne Rivard, 1998. "Assessing the Risk of IT Outsourcing," CIRANO Working Papers 98s-16, CIRANO.
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    Citations

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    Cited by:

    1. Mark A. Serva & Susan A. Sherer & Janice C. Sipior, 2003. "“When Do You ASP?” The Software Life Cycle Control Model," Information Systems Frontiers, Springer, vol. 5(2), pages 219-232, April.
    2. Manish Agarwal & R. Kishore & H.R. Rao & S. Upadhyaya, 2001. "Towards a Testbed for Modelling Application Service Provider (ASP)," Vision, , vol. 5(1), pages 13-23, January.
    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. Vincent Cho & Aman Chan, 2015. "An integrative framework of comparing SaaS adoption for core and non-core business operations: An empirical study on Hong Kong industries," Information Systems Frontiers, Springer, vol. 17(3), pages 629-644, June.
    5. Sun-Pyo Lee & Kyungji Kim & Sungbum Park, 2023. "Investigating the Market Success of Software-as-a-Service Providers: the Multivariate Latent Growth Curve Model Approach," Information Systems Frontiers, Springer, vol. 25(2), pages 639-658, April.
    6. Lin, Sheng-Wei, 2016. "The critical success factors for a travel application service provider evaluation and selection by travel intermediaries," Tourism Management, Elsevier, vol. 56(C), pages 126-141.

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