"This doesn't necessarily guarantee that the application will be available. In other words, if the software crashes, but the network is operational, the ASP has still met its guarantee," the report states. Include application availability in the agreement.
- Ask about the policy on upgrades. Most ASP contracts last at least a year, usually three and sometimes as long as five. At the same time, software suppliers usually release an upgrade every year and a half or so. "An agreement signed for three years will result in obsolete software being used, unless the ASP agreement caters for upgrades as they are released," cautions a Butler Group report, "Outsourcing the Enterprise."
- Consider privacy implications, both of your data and your customers'. "Ask who has access to the data and how is it secured," Gonzalez says. "Is the data encrypted and what protections are there against security breaches, both online and physically?"
- Give yourself an escape clause. "If you want to switch providers or bring the application in-house, make sure you actually own the data so you can easily move the data structure," says Gonzalez.
Editor's Note: Erika Morphy is a freelance writer based in Washington, DC.