Maintaining a CLASP (Customer Leveraged Application Service Provision) on application service providers: a lesson from german SMEs to ASPs

The decision to outsource business processes by outsourcing the supporting applications requires the consideration of critical factors within the areas of Delivery and Enablement; Integration; Management and Operations; Business Transformation and the customer/vendor relationship. This paper focuses on the ability of small and medium sized enterprises (SMEs) to evaluate whether their needs are being fulfilled as a result of using the application service provision (ASP) model, to facilitate technology outsourcing initiatives. Such levels of satisfaction are measured in terms of the customer’s expectancydisconfirmation (perceived performance against expectations (Johnson, Gustafsson, Andreassen, Lervik, and Cha, (2001)) of ASP services, including the significant importance of the extent to which services are ‘customer leveraged’ against traditional vendor driven methods (Kern, and Willcocks, (2000), Ovum (2000), Johnson, et al (2000)). The findings of this paper build on results from established outsourcing research (Yang, and Huang (2000)) (Johnson, et al. (2000)) and are based on a recent empirical study by the ALTERNATIVE project (IST 2000-28421), centred upon of German SMEs using ASP services across various industrial sectors. The research first describes the position of the European ASP market and then discusses why SMEs may choose to outsource via ASP and the importance of customer satisfaction within the outsourcing deal. The paper concludes with the findings from the SME study and their relationships in terms of the critical factors of outsourcing are described.