Vendor Strategies for Business Process and Applications Outsourcing: Recent Findings from Field Research

The convergence between telecommunications and computing industries enabling the provision of Internet/net centric products and services has seen the emergence and collapse of the first phase applications services provisioning (ASP) industry. This paper discusses the findings of a longitudinal research program comparing traditional and applications outsourcing methods and practices. Preliminary research has uncovered a mismatch between vendor hype about the benefits of the ASP business model, and customer caution in adopting the solution. Developing a taxonomy of net sourcing approaches, the paper argues that scale, scope and integration are three key areas which must be addressed by vendors in their business plans. With the advent of web services as a new IT architecture, it is suggested applications outsourcing will extend to business processes outsourcing as important challenges relating to scale, scope and integration will be overcome.