Strategic Sourcing

The major benefits that can be derived from use of an ASP include:

Customisation is the key to the successful delivery of an application from an ASP. The increased use of eXtensible Markup Language (XML) has enabled the market to move forward from the 'one size fits all' philosophy, and Butler Group advises that businesses should reject those providers that are unable to customise the service to their requirements.

Outsourcing

Outsourcing of IT facilities ranges from specific areas such as helpdesk provision or application development, right through to the outsourcing of the whole IT function, including infrastructure, staff, and the related business processes. Butler Group considers that this strategy is particularly relevant in an uncertain economic climate, when the flexibility to expand or contract the business can be vital. Additionally, outsourcers can offer economies of scale to reduce the costs associated with maintaining established and legacy systems, and allow forward investment in newer technologies.

Butler Group forecasts that the worldwide market for outsourced services will grow from US$75 billion in 2001, to reach US$175 billion by 2005. As with the xSP market, this growth is driven by a renewed focus on core business activities, and is further boosted by the current economic downturn.