Outsourced CRM: Why it will increasingly rely on application service providers
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Outsourced CRM: Why it will increasingly rely on application service providers Wendy Hewson Received (in revised form): 16 October 2001
Keywords: customer relationships, marketing software, application service providers, CRM, IS futures, software vendors, outsourcing, bureaux
Abstract Over the last two years, hosted software and the application service provider (ASP) model have been one of the hottest topics in IT. This paper looks at the evolution of the ASP and the implications for CRM. Certainly CRM vendors seem to believe that this concept offers potential, with most major companies having announced an ASP strategy. The key argument of this paper is that the ASP market is split into two very different models: the one-to-one and one-to-many ASP models. Although most analysts combine these models under the ASP umbrella, in practice they are poles apart, appeal to a different sizes of companies, provide different bene®ts and incur different risks. They also imply fundamentally different criteria for choice of ASP.
What is an application service provider?
De®nition
From origins in routine batch outsourcing . . .
Wendy Hewson Hewson Group, Carlton House, Market Place, Reepham, Norfolk NR10 4JJ, UK Tel: +44 (0)1603 879191 E-mail: [email protected]
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The start point is that an application service provider (ASP) will provide software applications on a rented basis. Business applications are delivered to the user through a browser1 and managed centrally by the ASP on a real-time, online basis. The technology is shared by several users to reduce costs and eliminate the need for the application to be physically located on a single corporate system. ASPs claim to help organisations avoid the upfront costs of purchasing applications and the headache of implementing, maintaining and upgrading them. ASPs have roots in business process outsourcing and service bureaux. Organisations of all sizes have been outsourcing call centres, payroll and customer data management etc to service bureaux, a trend which increased in the 1990s as companies decided to focus resources on core competencies and divest or outsource the rest. Over the same period communications between service bureaux and clients have progressed. Originally most bureaux sent users data in ¯at ®les or hard copy reports. This meant bureaux were most effective for highly routine batch-type applications, such as payroll processing, that did not need real-time digital communications. In the early to mid-1990s the advent of client server technologies promised users direct access to the outsourced programmes, reports and analysis. But at the same time, low-speed and narrow analogue bandwidth communications proved to be a signi®cant handicap. The cost and complexity of establishing the technology and networks needed for fast,
& H E N R Y S T E W A R T P U B L I C AT I O N S 1 4 6 3 - 5 1 7 8 . I n t e r a c t i v e M a r k e t i n g . V O L . 3 N O . 3 . PP 230±242. JANUARY/MARCH 2 0 0 2
Outsourced CRM
. . . to high-speed communications
reliable and secure da
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