Application service provider companies (ASPs) provide design, hosting and support of your company's applications and data. One of the benefits of choosing an application service provider is cost savings. Your company won't have to pay for software or the infrastructure to run and maintain it and you won't need an IT staff to support it.

One common service provided by an ASP company is custom-designed or off-the-shelf database applications. Other companies offer web-based collaboration applications like email and calendaring, e-commerce tools and customer and supply chain management applications.

Depending on the size of your organization and your software needs, an ASP may be the right choice for you. Here are some things to think about when deciding whether to use application provider services:

1. Find out if the ASP has the tools to build the right application for your needs.

2. Compare the solution to other available software to make sure it's exactly what you need.

3. Calculate the cost over the lifetime of the service, and compare it to the cost to purchase software and hardware.

4. Determine whether you have the budget to retain in-house staff to perform all of the tasks provided by an ASP.

Action Steps
The best contacts and resources to help you get it done

Find customizable application provider services

Many ASPs offer database design and programming that is customizable to your business needs.

I recommend: PlanetNorthstar performs a complete analysis of your business and provides an experienced database administrator to work on your project. LongJump creates custom applications that allow you to manage everything from data and resources to employees, vendors and expenses.

Look for ASP firms that offer email and collaboration applications

Most companies can benefit from advanced email and collaboration tools, but supporting and maintaining them can be cumbersome for a company with limited IT staff. An application service provider can offer powerful tools in a web-based interface.

I recommend: External IT integrates business-class email, CRM contact management, group calendaring and document management into an intuitive web-based application that offers SPAM and virus protection. PHASE2 hosted applications include Microsoft SharePoint portal and Project Server, email, web conferencing and instant messaging.

Seek out ASP companies that offer e-commerce and customer management applications

An ASP can help you present the right image and service to your customers.

I recommend: MVI Solutions offers a variety of shopping cart solutions, SSL and site building tools in a pay-as-you-go plan. AT&T's USinternetworking integrates applications for sales management, order processing and financial accounting.

Target ASP professionals that focus on financial software

Application service providers can provide powerful and affordable software for accounting and financial planning.

I recommend: Aplicor offers accounting software that is easy to use and provides real-time solutions. Infinity from SunGard can be customized to your specific processes or integrated with the company's other powerful financial applications.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Make sure your company retains full rights to your data when the contract with the application service provider ends.
• •  Online processing means that you and the ASP need a fast Internet connection and a reliable network. The company should provide 24-hour support and high uptime guarantees.