Application Service Providers (ASP) Adoption in Core and Non-Core Functions

Aman Y.M Chan,Vincent Cho

doi:10.5772/6774

Abstract

With the further improvement in internet bandwidth, connection stability and data transmission security, a new wave of Application Service Providers (ASP) is on his way. The recent booming on some models such as Software Application as Service (SaaS) and On-Demand in 2008, has led to emergence of ASP model in core business functions. The traditional IS outsourcing covers the non-core business functions that are not critical to business performance and competitive advantages. Comparing with traditional IS outsourcing, ASP is a new phenomenon that can be considered as an emerging innovation as it covers both core and non-core business functions. Most of the executives do not comprehend the difference and similarity between traditional IS outsourcing and ASP mode. Hence, we propose to conduct a research so as to identify the determinants (cost benefit, gap in IS capability complementing the company's strategic goal, and trust to ASP's service and security level) and moderating factors (management's attitude in ownership & control, and company aggressiveness) of ASP adoption decision in both core and non-core business functions.

Highlights

The traditional model for enterprises in applying Information Technology requires deploying in-house installation
The results indicated that 70% of the SMEs were not familiar with the term and that only 6% indicated that their organizations used the Application Service Providers (ASP) service
As ASP is getting more important in the future, we believe that it is worthwhile to conduct a research to understand and identify the determinants and moderating factors of ASP adoption decision in both core and non-core business functions

Summary

Introduction

The traditional model for enterprises in applying Information Technology requires deploying in-house installation. According to Gartner Group (2007), the ASP market will reach US$19.3 billion by 2010 He forecasts that the ASP as much as 25% of new business software will be delivered through SaaS. Traditional IS outsourcing normally covers the non-core business functions that are not critical to business performance and competitive advantages. Core functions are critical to an organization in making business decision They affect business performance, create competitive advantage, drive future growth, innovation and rejuvenation, as well as contribute to financial results. It is important both academically and practically to understand why companies adopt ASP for their functions (both core and non-core ones). As ASP is getting more important in the future, we believe that it is worthwhile to conduct a research to understand and identify the determinants and moderating factors of ASP adoption decision in both core and non-core business functions

Classification of Core and Non-core Functions in ASP Model

Theoretical Framework

Findings

Conclusion