Outsourcing has changed the relationship between vendor and customer from a sale-by-sale basis to an ongoing relationship. ASPs now often become an extension of the customers IT department.
But IT managers may feel they only need help with a few specialized tasks. Or they may be wary of letting an outside party handle mission-critical internal data. Though just a perceived pitfall, vendors must acknowledge that concern and address it to truly partner with customers.
Many companies are beginning to look for a mixed model or "right-source" offering that allows them to realize the advantages of outsourcing select business functions while maintaining others on premise. And they dont want to go to multiple vendors and systems integrators to achieve that right mix.
Corporate human-resources departments are a prime example of where right-sourcing is often the preferred model, as primary HR functions such as compensation planning and personnel information management are best handled through two different software deployments.
Compensation planning is a seasonal activity that requires significant staffing and IT resources for a relatively brief period of time. An ASP can bring temporary solutions to an enterprise with speed and expertise. When the enrollment crush dies down, the company disemploys the seasonal software while still maintaining the core internal applications year round.
On the other hand, personnel information remains security-critical in enterprises of all sizes. Whatever the data involves, companies strive to keep it private by maintaining it in-house.
Clearly, right-sourcing helps vendors differentiate their product offering from the competition. Customers realize a reduced cost of ownership by farming out select applications, feel secure with the functions to be maintained in-house and appreciate the simplicity of a single vendor for both needs.
Kevin Dobbs is VP of products and solutions for Workscape, a developer of workplace e-commerce solutions. Comments on this column can be sent to firstname.lastname@example.org.