Magistrska naloga

1
Application Service Provider Model for
accounting service companies
Marija KUHAR Marija_at_grad.si    Merkur day -
Naklo, 17. october 2003
2
Outsourcing
Business process outsourcing is defined as the
delegation of one or more business processes to
an external provider to improve an overall
business performance in a particular area.
A substantial reasons for outsourcing processes

• Lower costs
• Focus on core business
• Better quality of service

A problem This approach often leads to the
information shortage about the state of process.
3
Outsourcing accounting services

• A main reason is in a company size (in year 2001
  Slovenia has 90 companies with less then 10
  employees)
• essential benefits
• cost savings
• better service
• focus on core business
• essential weaknesses
• not in time information
• less responsibility
• confidential data are more exposed

4
Application Service Provider - ASP (1)

• An ASP provides a contractual service offering to
  deploy, host, manage, and rent an access to an
  application from a centrally managed facility
  (Toigo, 2002).
• The ASP manages and delivers application
  capabilities to multiple entities from a data
  center across a wide area network (Palmatier,
  2001).

provider (software, data)
user
user
user
user
user
5
Application Service Provider ASP (2)
Benefits

• the latest hardware and software technologies are
  in use
• foreseen fixed costs (no costs of ownership,
  software development
• provider has skilled staff at his disposal
• user can focus on core business
• savings on time to market
• scalability
• access from anywhere (only the computer with the
  internet accsess is needed)

6
Application Service Provider ASP (3)
Weaknesses

• dependency on provider
• confidental data are more exposed
• unreliable performance of the internet
• customer's own IT department loses competence
• financial solvency of the provider
• broad bandwidth connection across the entire path
• unclear market, unregulated legislation

7
The ASP infrastructure
Service providers need to be extremely careful
designing the infrastructure. Common guarantees
given these days are the following

• Security firewalls, intrusion detection systems,
  login procedures, cryptography, digital
  certificates
• Efficiency accelerators, proxy, load balancers,
  cache
• Availability redundant components, RAID
• software maintenance
• additional services

8
A survey

• target population accounting service companies
  (1.263)
• 606 questionnaires are sent (48 of population)
• structured, unstructured and semistructured
  questions
• examinees was anonymous
• questionnaries was sent via classical and
  electronic mail

9
A survey response
sent questionnaries no answer returned
valid returned not valid
606 419 184 6
10
A survey outcomes (1)

• The accounting service company employs 4 workers
  on the average.
• The accounting service company performs services
  for 34 customers. The average is 8.5 customers by
  a worker.
• Accounting service companies and their customers
  together comprehend approximately 40.000
  companies.

11
A survey outcomes (2)

• Information systems of accounting service
  companies and their customers are mostly
  separated.
• Too much time is spent on entering data into
  databases and delivering necessary reports.
• As the main weakness of outsourcing accounting
  services 45 of answers citate that customers
  havent up-to-date information
• 90 of accounting service companies are familiar
  with e-mail and internet

12
A survey outcomes (3)

• The ownership of software is too expensive (67
  of answers)
• Accounting service companies are familiar with
  emerging technologies (more than 50 ).
• 4.9 of the companies are ready to rent software
  by the ASP immediately. Another 64 of the
  companies will change gradually.
• 15 of their customers are willing to accept
  ASP solution. More than 50 of accounting service
  companies are convinced that they can attract
  some of their customers.

13
A survey outcomes (4)

• Almost 50 of examinees avoided a question about
  the expected fee.
• Other answers vary from 500 SIT to 50.000 SIT
  monthly by one station. The mean value is 9.358
  SIT. A standard deviation, which is je 8.320 SIT.
  
• The ASP provider has to tender its services for
  variable prices.

14
A survey outcomes (5)

• Most of the scruples mentioned in the survey are
  pointed on
• Security
• Availability
• Reliability
• For accounting service companies the capability
  to maintain applications and willingness for
  adaptation as necessary is very important
• 59 of examinees expect to be informed about
  survey results.

15
Summary of a survey outcomes

• Approximately 2.000 of companies are ready to
  rent a software by an ASP.
• Renting the ASP services enables that customers
  get information from the accounting service
  company timely.
• For accounting service company savings are hidden
  in spending time for entering data, controlling
  data, exchanging documents and preparing
  reports.
• The accounting service company can tender its
  services to more customers for reasonabe prices
  and of better quality.

16
ASP model

1. Interested accounting service companies decide to
   establish a joint-stock company, which will be
   the ASP provider for their own needs and the
   needs of their customers.
2. Interested accounting service companies unite
   into a new company, which will then offer both
   services renting software and accounting
   services.
3. One of existent software companies is motivated
   to establish ASP services. This survey proves
   that the market needs such service at least for
   accounting service companies and their customers.

17
The ASP will replace an ownership model in the
future. The only question is not if it will be
happen but when will be happen. First come,
first served!