Editor’s Note: Rufus Lohmueller is president and CEO of Lohmueller Consulting, Inc.

The Internet has spawned an information technology revolution. Among the new products that facilitate the streaming of information around the world at practically the speed of light are Application Service Providers (ASP). These organizations host software applications on internal servers, which are then accessed by clients remotely over the Internet.

To some, the term ASP is synonymous with the crash of the “dot.bombs” in the late 90’s. But, the ASP model has come back — strong. ASPs provide Software as a Service and several factors are influencing their comeback:

  • Increased access to high-speed Internet
  • Raised awareness of cost and effort savings
  • Expanding acceptance of outsourcing
  • Strengthened service providers

Software as a Service assists many small and mid-sized businesses realize benefits previously available only to larger organizations. Instant scalability and access to the latest technologies offered by web-based solutions, in some cases, may also eliminate the need for IT staff and in-house resources.

Often times, younger organizations are hesitant to utilize the very latest technology, as it may not be compatible with the existing system (i.e the process will require expensive upgrades). IT departments in these same organizations may be limited to basic firewall and antivirus software and have no system redundancy or disaster recovery plans.

Have you ever left an upgrade sitting on the shelf– worried that installing it would negatively affect other, working, applications? Utilizing web-based solutions makes those points non-issues, because they generally offer better capabilities and features at a lower cost than those achieved with in-house software.

IDC estimates that businesses utilizing a software as a service application will be rewarded with over 400% of ROI over the life of the contract. Some specific reasons for this are:

  • Application Upgrades — Upgrades are seamlessly instituted automatically without disruption to productive time
  • Security — Managed data centers with the latest security technology insure your data is in a Fort within a Fort — protected by surveillance, physical infrastructure, sophisticated monitoring devices — retinal scans and background check for personnel entry
  • Data Protection- With redundancy and disaster recovery – server, routers, alternate power, offsite backups
  • On demand — anywhere-anytime access, to real-time information that everyone in your company can see, regardless their location.

All this enables businesses to:

  • Focus on their core competencies
  • Reduce expenditure of resources on IT management
  • Gain an edge by leveraging the most current technology with a quicker implementation timeframe
  • Enable adaptation.

    • Checklist — What to Look for in an ASP or “Software as a Service” Provider:

    • Security: 128 bit encryption, similar to online banking
    • Data Center: redundant infrastructure, 24-7 monitoring
    • Flexibility: Can you integrate with other applications if needed?
    • Customization: Ease of customizing to your own needs — can you do this or do you need to pay an outside consultant to do it? How much will it cost?
    • Service Level Agreement — Uptime guarantee
    • Training / Educational Resources: quality of on-line help, availablity of phone, email or on-site support
    • Data Backup — included or extra cost?
    • Local Product Support — available or only sold and support remotely

    The following are references and resources regarding this important topic:

    • ASPNews.com
    • CRM-daily.newsfactor.com
    • SalesForce.com
    • SalesNet.com
    • NetSuite.com

    Rufus Lohmueller is president and CEO of Lohmueller Consulting, a Raleigh-based business management software consulting firm. The 20-year-old company offers sales support and training for NetSuite, an ERP, CRM and eCommerce hosted solution. To learn more about ASPs and Lohmueller Consulting, please visit www.Lohmueller.com.