|Testing the ASP waters|
Back in October 1997, the clock started ticking for Charles Warczak, vice president of finance and information systems at Sunburst Hospitality, a hotel management company in Silver Spring, Md.
"Choice Hotels International had just spun us off," says Warczak. "Choice agreed to provide us with financial information services until we could get up and running with a system of our own. I manage all the IT stuff, so it was up to me to chart our course as an independent company."
Warczak wanted to go with PeopleSoft financials, but when he added up the cost of implementation, additional hardware, software, and personnel, he began looking for other options.
"It was a pretty hefty price tag," says Warczak.
One of those options turned out to be USi: Its model of application hosting appealed to Warczak.
"When we were still a part of Choice [Hotels], I had seen a lot of the hidden costs of doing this in house," says Warczak. "With USi, there is a set monthly fee, which includes the setup and implementation."
Warczak could not disclose the USi fee, but he says that the do-it-yourself alternative would have cost at least $1.3 million and required five additional staff members.
Sunburst began working with USi in October 1998, and Warczak says they were up an running by April 1999. They are running PeopleSoft's General Ledger, Accounts Payable, and Fixed Assets applications, and he says things have gone well so far.
His primary concern from an IT perspective -- and one that analysts often cite -- is how well his ASP (USi ,in this case) really understands the application.
"This ERP software is not easy, nor is it user-friendly," says Warczak.
Sunburst still has an internal IT staff to manage their Novell LAN and for PC support.
Although he is relieved not to be maintaining a staff of PeopleSoft support specialists, he has a word of caution for anyone considering the ASP model.
"You have to make sure the ASP understands your application," says Warczak. "There are a lot of folks that can give you a screen and a help desk, but do they really understand your business?"
So far USi has convinced Warczak that he is in good hands.
"We always get the same person when we call for service on our account," he says.
Will this always be the case?