The Myths Surrounding Hosted ASP
By Simon Davis
Myth No 6. Switch on and off you go
This is a myth that has been promulgated by some in the industry, particularly where zero capital and low revenue cost applications are concerned and it can be true with limited functionalities. Nonetheless for more complex integrations there is no difference between hosted and client/server in the way change brought about by implementation of new systems within an organisation has to be managed. The reality still is that the software represents only one element of any CRM initiative. The truth is that any significant organisational change requires a combination of people, process and technology.
Change can fail for the same reasons with a hosted application as they can with client/server. Having said that, extended implementations of enterprise software possess their own execution risks as the ‘honeymoon' period of high expectations exceeds the time taken to bring into use.
All the leading hosted providers support project implementations by providing professional services staff to guide the implementation process or provide as -needed specialised resources.
Moreover, whilst it is undoubtedly true that hosted applications are faster to implement than client/server, the issue is whether this is germane or not. They are faster because the core application is largely pre-developed and new users are switching on an existing system. Nonetheless MarketDeveloper was one of the first hosted packages that offered a full customisation service specifically to client design requirements. Therefore we are beginning to see the move to more highly customised applications that extend well past look and feel. Hosted applications are faster to implement because porting into legacy systems is easier and they are far quicker because they often do not require the intervention of a client's IT department!
Myth No7. Hosted solutions can't be customized
A related myth is that you cannot have the low price of ‘on-demand' and have customisation. Solution providers have taken one of two directions – Microsoft, Salesforce and the like provide basic functionality but in an environment that allows third party suppliers to fully customise. Alternatively the likes of NetSuite etc. provide full customisation at costs not dissimilar to existing integrators.
MarketDeveloper is fundamentally different in this respect. Our development team have spent 4 years developing a data schema (the layout of the database providing the structure to the data warehouse) so flexible that customisation is straightforward. You therefore get the hosted package you specify – not an application that you have to work around. In this way bespoke application development becomes a low cost option.
MarketDeveloper requires neither large amounts of input from an internal IT department to implement nor any third party input to customise. Also, let's be straight –how many Marketing or Sales people do you know you can or want to customise their own applications?
Myth No 8. It's difficult to integrate hosted solutions with desktop programs, back-office applications or legacy systems
While integrating systems is should be seen as a top priority, up to 80% of the application cost of a major, conventional CRM implementation is porting it into legacy systems using interfaces that often have to be specially written. Nonetheless the productivity gains to be made mean that standalone CRM should be an oxymoron! Early hosted applications used a range of methods to effect integration but latter iterations have been able to leverage the current communications technology to assist integration.
Web services is becoming the de facto standard among system integration methodology. The term Web services describes a standardised way of integrating Web-based applications using XML and a SOAP transport over the Internet. Web services allow different applications to communicate with each other without the time-consuming, expensive application specific coding that characterised client/server. The key to web services now and in the future is that they allow organisations to communicate with each other without intimate knowledge of each other's IT systems behind the firewall. This allows integration both within and beyond the walls of the organisation.
Therefore XML in and out is a minimum and it will be interesting to see where .net takes hosted applications.
One area of interest for the future is the way hosted applications can integrate either through product extension or through XML to other packages' business processes. To an extent we are already seeing this with NetSuite coming out of ERP into CRM. MarketDeveloper offers a seamless transition from Marketing through Lead Allocation to Sales Force Automation. This should really start to break down the corporate silo mentality. XML offers the opportunity for third parties to integrate, so we start to see the beginnings of integrated Supplier Relationship Management that was born and seemed to die with EDI.
Integration to Microsoft Word and data outputs to EXCEL should be seen as an absolute minimum. Most hosted application providers now provide direct synchronisation with Outlook. Some have written integration to a number of more popular ERPs.
MarketDeveloper has all the advantages of a .net application with its ability to communicate with most modern day software packages. The Sales Order Processing module allows the integration of your CRM with your accounting software, and MarketDeveloper's Sales Force Automation module begins to bring Sales and Marketing together as a coherent whole.
Myth No 9. Hosted solutions run themselves
It is undoubtedly true that hosted solutions in general require far less system administration and overall management than on-premise solutions. It is also true that hosted applications are more user-friendly (remember that?) and have a far higher level of early cycle uptake and acceptability than on-premise.
Nonetheless the owner of a hosted application has to probably accept a higher level of ownership relative to client/server in order to make an implementation successful. Also the relationship with the provider needs to be carefully first investigated and then managed after delivery. This happens at a number of levels;
- The SLA should provide system access and support availability. If you are running across country boundaries the help desks need to be available in different time zones.
- You should gain structural guarantees relating to physical data and system security.
- The software and the management systems implemented by your provider must provide you with a means to be fully compliant with the relevant data protection legislation in the countries you operate. The software provider must be cognisant of the Law as it applies and the hosting arrangements must allow compliance at the point at which the data is accessed.
- Certain software providers do not provide implementation, customisation and services to add functionality. It is important that they have appointed third party vendors in your geographical area to provide these.
The up front value proposition of hosted applications that give you £50 per user per month access and a delivery mechanism that gives you pain free implementation still doesn't change the fundamental rule that any significant organisational change requires a combination of people, process and technology.
MarketDeveloper provides implementation, lifecycle and change management support, some of which is provided for in the implementation costs and some are provided ad-hoc. MarketDeveloper also has a wide variety of ad-hoc services that go way past the on-product service delivery modules. Although MarketDeveloper has an email module you can use the company's service resources to create html, build landing pages, host images, manage bouncebacks, handle responses and build suppression files for unsubscribes.
There is a dichotomy in the way hosted solutions providers provide system development resources. Some such as NetSuite, Aplicor and MarketDeveloper provide fully integrated single vendor solutions that support a wide range of business functions. Therefore if an implementation is complete and broader functionality is required this is provided by the original developer. Others such as Salesforce and Microsoft operate through third party vendors.
Conclusion
This paper was not intended simply to blow the trumpet for the ASP industry but look sensibly at the way hosted applications have finally begun to find their place in the enterprise armoury. The future lies with ASP in the same way client/server took the place of mainframe and it will do it in the same way i.e. in the most appropriate places. Client/server and mainframes will not disappear but way all the major integrators have or will have hosted applications available shows the way. Aberdeen Group suggested recently that licensed software revenues will decline at an average annual rate of 4.8% by 2006 with a corresponding jump in hosted while IDC recently suggested a 6-fold growth to 2008. Anecdotally MarketDeveloper Ltd, developers of MarketDeveloper has seen significant growth in interest and then in orders for hosted applications in 2004 and 2005 as ‘hosted' gains greater acceptability in the broader marketplace.
Back to White Papers