556 Making Key Strategic Decisions
APPLICATION SERVICE PROVIDERS (ASPS)
ASPs are companies that provide hosted access to software applications like
Microsoft Office and ERP systems. In effect, a company rents the application
while the data is processed on the ASP’s computer. Companies typically pay a
per-user fee along with a cost-per-storage unit and access-time unit. This cost
structure is similar to a model from the 1960s and 1970s, when computers
were very expensive and companies used service bureaus to process their data.
The difference today is that much of the data is accessed over high speed data
lines or over the Internet. The downside of using an ASP is that the user is
placing its destiny in another company’s hands and is dependant on its security
and financial health. The upside is that users are not responsible for purchasing
the application, maintaining it, and having to provide the computer power to
process the data.
WEB HOSTING
While many companies host their own Web site, others prefer to contract that
job out to other companies. These companies provide the communications
lines, Web servers, data backup, and, in some cases, Web design and mainte-
nance services. Companies that choose to outsource their Web hosting are also
protecting their main network from security breeches. However, they are still
placing a great deal of their data on the Web hosting company’s computer,
which is still subject to security hackers. Many large companies such as Earth-
link, AT&T, Qwest, along with many smaller companies, provide Web hosting
services. These companies provide speed, reliability, and cost advantages,
along with redundancy and technical service.
DECISION SUPPORT SYSTEMS/ EXECUTIVE
INFORMATION SYSTEMS
A class of software that is used mostly by middle-level and senior executives to
make decisions, this software combines many of the features of traditional ex-
ception reporting with the graphical display tools available in spreadsheets. It
allows users to make their own inquiries into large volumes of data, stored in
databases or data warehouses, and provides for drill down reporting, or “slice
and dice” analysis.
Typically, most data in a database or data warehouse is three dimensional
and looks something like a Rubic’s cube. Consider a database model for a chain
of 300 retail stores. The first dimension may be the company’s merchandise;
the second dimension may be its store locations; and the third dimension may
represent different points in time. An executive might examine the men’s de-
partment sales. Not satisfied with the results, she might then probe to learn