What Service Do You Need?

It is important to assess your application needs before selecting a managed service provider. Once you've selected the application that's right for your organization, you'll need to consider a wide range of factors before choosing which managed service provider should run the software. Each company must balance its own needs and relationships in order to weight the factors appropriately. The goal of cost-effective ownership has to be balanced with proper service levels provided by the vendor. In today's world of shortened deadlines and compliance requirements, companies choosing to outsource their performance management software support need to select a vendor that they can stake their reputation on.

Vendor viability, security, and expertise are three key determinants in selecting the right provider. The outsourcer needs expertise in both the business application and the underlying technology; the firm should understand the requirements of BPM and have experience managing a data center. Service providers should also have certifications from the BPM, database, and operating system vendors whose software you're implementing, as well as SAS-70 Type II certification (see What's SAS-70? ).

Several factors related to design of the software should play into the choice of outsourcer. Some on-demand offerings have certain features disabled, so they're not as robust as the equivalent installed software. Sometimes this is done for royalty and license reasons, but in other cases the vendor disables functions to better secure or scale the environment. To ensure your needs will be met, ask for a test drive or a 90-day opt-out guarantee. Another software issue is data integration, which can be a major roadblock to project success. Find out at the beginning of the decision-making process which data collection and integration methods each service provider recommends. If your approach will be different, verify that it will be supported and ask whether it will increase costs. Finally, BPM service buyers need to know whether they will have control of when maintenance is performed and software is upgraded.

Data security should be a top consideration in the selection of a service provider that will be hosting sensitive financial information. In addition to SAS-70 Type II certification, a proper data center should offer digital certification with 128-bit SSL secure connections, firewalls with intrusion detection and prevention, biometric security for accessing the data center, full redundancy so there's no single point of failure, independent power management (e.g., battery and generators), waterless fire suppression systems, 24x7 technical support, a disaster recovery site, and offsite data archival. Vendor reliability can be gauged by contacting customer references, reviewing the organization's financial health, visiting data centers, and asking for service level guarantees in the contract.

Services that are outside the scope of the SLA are usually performed as needed on a time-and-materials basis. Many providers have an "a la carte" menu that details extra services and their estimated costs. This information should be considered as part of a very close examination of total cost of ownership. A vendor that appears on the surface to charge very little may provide limited support or charge high fees for additional services. Compare and understand vendor service level agreements, and be on the lookout for hidden costs.

Managed BPM solutions are becoming increasingly popular. Because they're customizable yet easy to deploy, they're driving down the cost of ownership for BPM software significantly and allowing businesses of every size access to the same performance management technologies. The many flavors of managed service are leveling the playing field for smaller companies, providing significant benefits in speed and flexibility that are not always available in the traditional model of installed software.

Andrew Jorgensen is a senior partner at Pinnacle Group Worldwide,a reseller and systems integrator of performance management solutions since 1995.