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12/15/2004
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SmartAdvice: Consider Purchasing Real-Time Collaboration Applications Through An ASP

Do enough initial planning to confirm that the model works with your business strategy and IT environment, The Advisory Council says. Also, eliminate unproductive behaviors to increase IT cost savings.

Editor's Note: Welcome to SmartAdvice, a weekly column by The Advisory Council (TAC), an advisory service firm. The feature answers three questions of core interest to you, ranging from leadership advice to enterprise strategies to how to deal with vendors. Submit questions directly to smartadvice@tacadvisory.com


Question A: What are the trade-offs between outsourced versus internal real-time collaboration services?

Our advice: For many companies the real-time collaboration and E-mail systems have become so crucial for business continuity that high availability and robust fail-over are now requirements. Since supporting an in-house solution--Microsoft or otherwise--can be a costly and complex undertaking, it makes sense to look at outsourcing to gain higher service levels while minimizing in-house support costs. If you're comfortable with the outsourcing model for your mission-critical systems, it can be a very effective and flexible solution.


Related Links

The Collaborative Effect

Real-Time Teamwork

Microsoft Making Real-Time Collaboration Moves

Collaborative Applications Software


Unlike internal systems that are deployed and supported by in-house IT staff, real-time collaboration services providers have developed specialized applications available on a monthly or yearly basis. Usually priced based on the number of users, this can be an attractive model for smaller companies that need to use sophisticated and expensive applications such as Web conferencing, CRM, or ERP that they otherwise wouldn't find affordable or supportable. Recently, application service providers have started to offer hosted Microsoft Exchange and sophisticated shared calendaring and meeting systems for companies that are looking for more general-function collaborative services. The advantages of worldwide access to the application from a browser means that collaboration isn't limited to your LAN or employees, either. For many smaller companies, using a hosted solution may be the only way to access sophisticated 24-by-7 fully managed services.

    ASP Advantages
  • Minimal initial investment
  • Flexible, more predictable cost structure, and a "pay as you go" solution
  • Significantly lower IT overhead and administration costs
  • High availability and worldwide access
  • No need to dedicate limited and possibly untrained in-house IT resources
  • Knowledgeable vendors using best practices supporting the application

    ASP Disadvantages
  • Less flexible configuration options
  • Little or no integration with existing in-house systems
  • Limited availability of specialized industry or custom applications
  • Reliance on the outsourced vendor for mission-critical system support
  • Inability to capitalize deployment costs

The hosted services approach means potentially minimizing your business risks while giving you the advantage of business knowledge and industry best practices. It also minimizes your initial expenditures by allowing you to expense costs as your business-needs change. Although many low-cost providers offer limited customization options, as the industry matures, more vendors are offering additional choices--at a price, of course. On the other hand, choosing an in-house deployment means that you can customize the package to meet your specific needs. The trade-offs are higher initial startup expenses and in-house support overhead to consider. Deploying Exchange for even a midsized installation, between the license costs and the need for high-availability hardware, can be a daunting and expensive undertaking for a typically overstretched IT department.

In the past, ASPs got an undeserved poor reputation for terrible service and inflexible software. The fundamental model of purchasing sophisticated real-time collaboration applications through a service provider, instead of building and maintaining them in-house, is sound. However, to ensure success, your company needs to do sufficient initial planning to confirm that the model works with your specific business strategy and IT environment.

-- Beth Cohen

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