Here today, gone tomorrow
Worse than getting gouged on price is being left holding the bag.
When HotOffice announced on its Web site that it would shut down in mid-December, it was the first that John Simmons heard about it. The senior vice president of service teams for Greeson, a food broker, was surprised to say the least. "When I spoke to senior management December 1, I was told they had secured funding," he recalls. Greeson had used Hot Office's platform to link its sales offices in Columbus, Indianapolis, Toledo, Detroit, and Cincinnati via email and document sharing since 1998.
Last year, Simmons noticed inconsistencies in service. "As they grew, their capacity to meet customer needs was strained. The last six months were bumpy, and we'd go offline," he says.
When it came time for Greeson to update its contract with HotOfficeâ€"just days before the ASP would announce its demiseâ€"Simmons says he was told everything was in order. But when the closure went public, Simmons had only two weeks to pick a new ASP and transfer his company's data. It took a week for the company to research new options and another week for employeesâ€"taking time away from their jobsâ€"to transfer their information.
Employees' time adds up. And the only way to avoid these costs is to screen your ASP with keener scrutiny than you'd apply to any other business partner. Many ASPs will oblige you with general information: how many clients they have; how big their clients are; and general financial information such as earnings to liabilities, historic retained earnings, and receivables to accounts payable.
Better ASPs will provide their entire list of customers, rather than a handpicked group of references, if you ask them. George Tomko, CIO of Astaris, demanded a list of all eOnline's customers before he signed up. "I said, 'I want you to give me your entire customer list and allow me to call anyone I want,' " he says. "At first, it caught them by surprise, but they gave us their whole list. We weren't looking for glowing recommendations. I wanted to know if they had encountered any problems and if they could recommend eOnline after going through [the implementation]. It's not the warts I wanted to see, but whether they had been cured."
An ASP's clients may be less than forthcoming about their arrangements. Yet you needn't be invasive. Ask whether the ASP met its service-level agreement 100 percent of the time. Did they get reimbursed when ASP errors caused downtime or other problems? Ask about reliability, customer support, data backup, and how well the ASP's development staff communicated during the setup phase. Would those references use that ASP if they had to do it again?
