Customizing ASP apps no easy chore

If you're hoping to team up with an application service provider (ASP) to support high-end applications, you had better keep expectations in check, because sacrifices may be in order.

ASPs are not offering business users the same level of customization for enterprise resource planning (ERP) and customer relationship management (CRM) applications as do most systems integrators. In fact, ASPs discourage users from tweaking the applications at all.

The good news is that customers who have already taken the plunge say there are ways around an ASP's push for minimal customization.

Nearly all businesses that deploy ERP and CRM applications in-house - without the help of an ASP - also customize these applications, says Eran Grumberg, a vice president at Meta Group, a consultancy in Stamford, Conn. However, customization does add costs in the long run because changing the code of an application means it takes longer for a user to upgrade every time a new version of the software is released.

If an ASP had to customize and then upgrade 50, 100 or eventually 1,000 individual customer deployments, it's easy to see why that service provider would want to keep customization to a minimum in the first place. Every hour an ASP spends on customization means money lost because that altered software will most likely not be transferable to another customer, Grumberg says.

While it's important to understand why ASPs are trying to keep their services as plain as vanilla, it's more important that users know how to get what they want from their ASP while also benefiting from the lower costs associated with outsourcing.

Clarent, a voice-over-IP vendor, recently teamed with ASP Corio to deploy PeopleSoft to more than 300 employees. While Clarent did require some customization - in essence a change to the PeopleSoft code that allows the company to capture product serial numbers - that was the only change the company required.

The fact that Clarent only needed one custom change to PeopleSoft was no accident, says David Blumhorst, director of information technologies at the Redwood City, Calif., company. Because PeopleSoft can be configured to many different specifications without actually changing the software's source code, it will be easier to install and maintain in the long term. This was why Blumhorst selected PeopleSoft. "If I had chosen Great Plains or Solomon, I'd have had to customize a lot," he says. "But with PeopleSoft the functions were rich enough so that the configuration could be done as a standard process."

Like most ASPs, Corio tries to keep customizations to a minimum. However, the ASP has established a library of frequently sought changes, says one of Corio's founders, Jonathan Lee. Because Corio is specifically targeting high-technology businesses as customers, Lee says this library addresses up to 95% of customization requests.

USinternetworking has a similar set of predefined customizations that address many of its customers' desires for tweaks in PeopleSoft, Siebel Systems or one of the company's other application offerings, says Michelle Perry, vice president of marketing at the ASP in Annapolis, Md.

But ASPs don't always have set customization templates ready to go. When USinternetworking customer Peter McGill, director of sales and marketing systems at Rhythms NetConnections, requested software alterations that would change how his employees viewed their Siebel application, the ASP didn't have an appropriate template.

McGill also requested a fair amount of customization on the back end to link his Siebel database with Rhythms' internal operations.

"At first USi kept telling us to stick to vanilla, which was our goal when we started out. But as you're rolling out an application like this you realize changes need to be made," McGill says. USinternetworking did come through with the customization McGill requested, still met the agreed-upon deadline for deployment, and didn't change the price of the service.

While pleased with the outcome, McGill says that hiring a consultant with direct Siebel expertise made a big difference. When the internetworking technical staff would come back and say a change was not possible, the consultant was there to suggest an alternative method. "He acted as my advisor looking out for my interests," McGill says.

Some customers would just as soon not get into customizing their ASP applications. Flash Electronics, a PC electronics manufacturer in Fremont, Calif., has been working with an ASP called Applicast for about five months. Applicast hosts, manages and maintains Flash's SAP R/3 applications.

It was important to Flash that it not customize its applications, says Matthew Liu, the company's chairman. Liu wanted to ensure that Flash would be able to access the latest versions of SAP as soon as they were made available. When you change the software code, simple upgrades can become much longer processes, he says.

While Applicast was able to put together a service for Flash that required no customization, analysts say that such situations are the exception. In addition, it's important to remember that ASPs are struggling with this customization issue today, when most still have extremely limited customer bases. The challenges will likely become greater as the ASPs become more popular.

Next: A look at the various ASP business models and
ASP believers offer words of wisdom

ASP Search
Scour the Web for ASP information: