Not only do companies that use ASP services benefit from a hefty return on investment, they enjoy peace of mind, clearer focus and a better work environment, according to Framingham, Mass.-based research firm IDC.
IDC’s “The Financial Impact of Application Service Providers” investigated the return on investment (ROI) realized by organizations that have successfully implemented and used ASP-delivered application services.
The study reports that ASPs positively impact a customer’s bottomline, yeilding an average ROI of 404 percent. The study included 54 in-person interviews with IS managers, business managers, department managers and system users spanning a range of industries, according to IDC.
IDC cites the following key findings from its report:
- ASP implementations generated an average five-year ROI of 404 percent, and almost half of the organizations in the study had reached payback within six months.
- Of the organizations included in the study, 44 percent experienced an ROI greater than 100 percent, while 12 percent reported ROI returns of more than 1,000 percent.
- 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. “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.”
The study received broad industry support, according to IDC, including sponsorships from the following: ASP Industry Consortium, Atomz, BlueStar Solutions, IBM eServer iSeries, JD Edwards, PeopleSoft, Progress Software, Sun Microsystems, USinternetworking, Unisys, Cable and Wireless and Qwest Cyber.Solutions.