Exam 8: ERP and Electronic Commerce

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Advantages of Using an ASP
Many companies find it advantageous to use an ASP for ERP and other information system applications.Some of the benefits include:
· Affordability: Companies that cannot afford their own ERP system can now "lease" one on a monthly basis,avoiding the high cost of obtaining the hardware and software and hiring and training support personnel.ASP services can be received through the Internet using either a Web browser or SAP's graphical user interface (GUI)software.
· Shorter implementation times: The time needed for ERP implementation is shorter for those who implement ERP through an ASP.ASPs already run systems that are similar to ERP systems and thus are experienced in software delivery.They have servers,telecommunications,and highly trained personnel already in place.
· Expertise: ASPs are experts in delivering IS applications.They do all the maintenance,including execution of backups,training,and customizing of the system.Customers of ASPs can eliminate IT headcount.ASPs can also run information systems more efficiently because they do it on a large scale.ASPs can spread fixed costs over many users,thus achieving economies of scale that might translate into low lease rates.The availability of IS talent is tight in the current market; an ASP might have a better chance of attracting and retaining a talented workforce than a company like Fitter Snacker.
Disadvantages of Using an ASP
There are some potential problems with using an ASP:
· Security: Companies using ASPs are turning their information systems over to a third party.They must be confident that the ASP has a high level of security.How hardware will be shared is also a security concern.The ASP will have multiple users on a single piece of hardware.Each customer's data must be shielded from other customers.While these are valid concerns,ASPs often have better security than a small company can have on its own.
· Bandwidth/response time: The telecommunications channel from the ASP to its customers must be fast enough to handle multiple users.An ASP's servers must be sufficient in terms of processing capabilities.
· Flexibility: An ASP should be flexible in working with its users and satisfying their requests for processing modifications.
· No frills: An ASP can usually provide basic ERP systems well,but asking for unusual configurations may cause problems.An ASP might not allow for third-party add-ons,either.Further,the ASP might not want to do much customization using the SAP R/3 programming language,ABAP.
· Technical,not business: An ASP knows the technical aspect of the software,but it will need the customer to define the business processes and make the configuration decisions.