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ASPIC Prepares Guidelines For Dispute Resolution

Following up on a promise made earlier this year to develop a global dispute avoidance and resolution mechanism for application service providers (ASPs), the ASP Industry Consortium today (Nov 14) said its recommendations and guidelines are nearly complete, and released the executive summary of a white paper highlighting those guidelines.

"ASPresolve: Dispute Avoidance and Resolution Best Practices for the ASP Supply Chain" was presented by Traver Gruen-Kennedy, chairman of the ASP Industry Consortium, during a press conference hosted by the Consortium at COMDEX/2000 in Las Vegas.

"As yet, there have not been a significant number of reported disputes in the ASP space," explained Gruen-Kennedy, attributing that lack of disputes to, among other reasons, the newness of the ASP model and additional precautions and measures in service delivery and customer care, which at a later stage may become cost-prohibitive. "However, as the ASP market grows, the number of disputes will rise as a result of the failure of providers to meet service-level commitments to end user satisfaction."

"In addition, if analysts' predictions that the ASP industry will experience significant short-term consolidation are correct, disputes over issues such as data ownership, data transfer or software ownership could well materialize."

The white paper's main objective is to help address such disputes before they become prevalent, Gruen-Kennedy explained. And, while the guidelines contained in the report should not be relied upon as a substitute for specialist professional advice, they are badly needed, for a number of reasons, he said. Most notable among these is the fact that lawyers, judges, arbitrators and other "alternative dispute resolution" experts not familiar with the ASP industry need insight into the structure, relationships and likely areas of dispute in the ASP supply chain, he noted.

For example, the white paper provides a list of the types of disputes that persons interviewed by the ASPIC Dispute Avoidance and Resolution Team (DART) indicated they have faced in the past, are presently trying to resolve, or believe could be flashpoints in the future. These disputes are likely to contain a number of characteristics that present a challenge to resolution, including the "one-to-many" nature of the delivery model; multi-jurisdictional circumstances; complexities in identifying and attributing problems in a multi-layered partnering relationship; and evolving pricing and contracting models.

The white paper also contains an ASPresolve Pledge that the ASP Industry Consortium has offered as an example of what it would expect of companies acting in good faith. "While not legally binding, it is intended to be a 'badge of honor' that allows companies to affirm to their customers and partners an intent to build long-term, profitable and constructive business relationships and to deliver reliable and consistent service," Gruen-Kennedy said.

The ASPresolve pledge states, in part, that companies taking it believe that the risk of disputes can be minimized by best practices, and commit to promoting and implementing best practices as defined and articulated by and for the ASP Industry Consortium's members. Further, they commit to exploring the use of alternative dispute resolution techniques as a means to pursuing effective dispute avoidance, management and resolution mechanisms.

Key to the entire DART effort, Gruen-Kennedy noted, was recognizing that the best way to resolve disputes is to avoid them in the first place. Recommendations for dispute avoidance include:
-- Adopting and promoting operational best practices in areas ranging from infrastructure and connectivity to security and support.
-- Being proactive in determining service level compliance problems by deploying systems that can isolate problem causes and the associated vendor.
-- Providing timely and responsive problem resolu