ASP implementations gives ROI of 404%: IDC

BANGALORE: Utilizing the services of an ASP positively impacts an organization’s

bottom line, according to the just-released findings of IDC’s groundbreaking study,

"The Financial Impact of Application Service Providers." This study

reveals that ASP implementations tend to be an enormously beneficial investment with an

average yield of 404 per cent.

"ROI analysis is an invaluable tool for executives when making critical technology

investment decisions," said Stephen Graham, Vice President of Global Software

Partnering and Alliances, IDC. "Besides providing an initial assessment of impact,

ROI analysis helps executives understand the key drivers of ROI so the results can be

managed effectively."

ASP implementations generated an average five-year ROI of 404 per cent, and almost half

of the organizations in the study had payback within six months.

44 per cent of the organizations included in the study experienced an ROI greater than

100per cent, while 12 per cent reported ROI returns of over 1,000 per cent.

The average payback for an ASP outsourced solution was 1.33 years on an average total

investment of $4.2 million. The average initial investment was $ 399,000.

"The ‘return’ in return on investment will mean something different to

every company," said Meredith Whalen, vice president of IDC’s ASP and internet

services research at IDC. "Quantitative and measurable benefits provide proof of

success; however, ASP customers frequently cite peace of mind, an ability to focus on

their core business, and a better work environment as equally valuable benefits of working

with an ASP. Equipped with both quantitative and qualitative benefits, decision-makers can

be better assured of sound business judgements."

"IDC’s ASP ROI research presents the industry with solid reliable validation

of the benefits of an ASP service," said Paula Hunter, chairwoman, ASP Industry

Consortium (a global organization supporting the interests of the application provider

industry). "It also provides an objective and realistic assessment of what customers

are experiencing today."

IDC’s study investigated the return on investment realized by organizations that

have successfully implemented and utilized ASP-delivered application services. It included

54 in-person interviews with IS managers, business managers, department managers, and

system users spanning a range of industries. The study received broad industry support

including sponsorships from the following: ASP Industry Consortium, Atomz, BlueStar

Solution (formerly eOnline), IBM eServer iSeries, JD Edwards, PeopleSoft, Progress

Software, Sun Microsystems, USinternetworking, Unisys, Cable and Wireless, and Qwest Cyber

Solutions.