1. Marija KUHAR Marija@grad.si Merkur day - Naklo, 17. october 2003 Marija KUHAR Marija@grad.si Merkur day - Naklo, 17. october 2003

2. Outsourcing Business process outsourcing is defined as the delegation of one or more business processes to an external provider to improve an overall business performance in a particular area. A substantial reasons for outsourcing processes:  Lower costs  Focus on core business  Better quality of service  Lower costs  Focus on core business  Better quality of service A problem: This approach often leads to the information shortage about the state of process.

3. Outsourcing accounting services  A main reason is in a company size (in year 2001 Slovenia has 90 % companies with less then 10 employees)  essential benefits:  cost savings  better service  focus on core business  essential weaknesses:  not in time information  less responsibility  confidential data are more exposed  A main reason is in a company size (in year 2001 Slovenia has 90 % companies with less then 10 employees)  essential benefits:  cost savings  better service  focus on core business  essential weaknesses:  not in time information  less responsibility  confidential data are more exposed

4. Application Service Provider - ASP (1)  An ASP provides a contractual service offering to deploy, host, manage, and rent an access to an application from a centrally managed facility (Toigo, 2002).  The ASP manages and delivers application capabilities to multiple entities from a data center across a wide area network (Palmatier, 2001).  An ASP provides a contractual service offering to deploy, host, manage, and rent an access to an application from a centrally managed facility (Toigo, 2002).  The ASP manages and delivers application capabilities to multiple entities from a data center across a wide area network (Palmatier, 2001). provider (software, data) user

5. Application Service Provider – ASP (2)  the latest hardware and software technologies are in use  foreseen fixed costs (no costs of ownership, software development  provider has skilled staff at his disposal  user can focus on core business  savings on time to market  scalability  access from anywhere (only the computer with the internet accsess is needed)  the latest hardware and software technologies are in use  foreseen fixed costs (no costs of ownership, software development  provider has skilled staff at his disposal  user can focus on core business  savings on time to market  scalability  access from anywhere (only the computer with the internet accsess is needed) Benefits:

6. Application Service Provider – ASP (3)  dependency on provider  confidental data are more exposed  unreliable performance of the internet  customer's own IT department loses competence  financial solvency of the provider  broad bandwidth connection across the entire path  unclear market, unregulated legislation  dependency on provider  confidental data are more exposed  unreliable performance of the internet  customer's own IT department loses competence  financial solvency of the provider  broad bandwidth connection across the entire path  unclear market, unregulated legislation Weaknesses:

7. The ASP infrastructure  Security: firewalls, intrusion detection systems, login procedures, cryptography, digital certificates  Efficiency: accelerators, proxy, load balancers, cache  Availability: redundant components, RAID  software maintenance  additional services  Security: firewalls, intrusion detection systems, login procedures, cryptography, digital certificates  Efficiency: accelerators, proxy, load balancers, cache  Availability: redundant components, RAID  software maintenance  additional services Service providers need to be extremely careful designing the infrastructure. Common guarantees given these days are the following:

8. A survey  target population : accounting service companies (1.263)  606 questionnaires are sent (48% of population)  structured, unstructured and semistructured questions  examinees was anonymous  questionnaries was sent via classical and electronic mail  target population : accounting service companies (1.263)  606 questionnaires are sent (48% of population)  structured, unstructured and semistructured questions  examinees was anonymous  questionnaries was sent via classical and electronic mail

9. A survey response sent questionnaries no answer returned valid returned not valid 606 419 184 6

10. A survey outcomes (1)  The accounting service company employs 4 workers on the average.  The accounting service company performs services for 34 customers. The average is 8.5 customers by a worker.  Accounting service companies and their customers together comprehend approximately 40.000 companies.  The accounting service company employs 4 workers on the average.  The accounting service company performs services for 34 customers. The average is 8.5 customers by a worker.  Accounting service companies and their customers together comprehend approximately 40.000 companies.

11. A survey outcomes (2)  Information systems of accounting service companies and their customers are mostly separated.  Too much time is spent on entering data into databases and delivering necessary reports.  As the main weakness of outsourcing accounting services 45 % of answers citate that customers haven’t up-to-date information  90 % of accounting service companies are familiar with e-mail and internet  Information systems of accounting service companies and their customers are mostly separated.  Too much time is spent on entering data into databases and delivering necessary reports.  As the main weakness of outsourcing accounting services 45 % of answers citate that customers haven’t up-to-date information  90 % of accounting service companies are familiar with e-mail and internet

12. A survey outcomes (3)  The ownership of software is too expensive (67 % of answers)  Accounting service companies are familiar with emerging technologies (more than 50 %).  4.9% of the companies are ready to rent software by the ASP immediately. Another 64 % of the companies will change gradually.  15 % of their customers are willing to accept ASP solution. More than 50% of accounting service companies are convinced that they can attract some of their customers.  The ownership of software is too expensive (67 % of answers)  Accounting service companies are familiar with emerging technologies (more than 50 %).  4.9% of the companies are ready to rent software by the ASP immediately. Another 64 % of the companies will change gradually.  15 % of their customers are willing to accept ASP solution. More than 50% of accounting service companies are convinced that they can attract some of their customers.

13. A survey outcomes (4)  Almost 50% of examinees avoided a question about the expected fee.  Other answers vary from 500 SIT to 50.000 SIT monthly by one station. The mean value is 9.358 SIT. A standard deviation, which is je 8.320 SIT.  The ASP provider has to tender its services for variable prices.  Almost 50% of examinees avoided a question about the expected fee.  Other answers vary from 500 SIT to 50.000 SIT monthly by one station. The mean value is 9.358 SIT. A standard deviation, which is je 8.320 SIT.  The ASP provider has to tender its services for variable prices.

14. A survey outcomes (5)  Most of the scruples mentioned in the survey are pointed on  Security  Availability  Reliability  For accounting service companies the capability to maintain applications and willingness for adaptation as necessary is very important  59% of examinees expect to be informed about survey results.  Most of the scruples mentioned in the survey are pointed on  Security  Availability  Reliability  For accounting service companies the capability to maintain applications and willingness for adaptation as necessary is very important  59% of examinees expect to be informed about survey results.

15. Summary of a survey outcomes  Approximately 2.000 of companies are ready to rent a software by an ASP.  Renting the ASP services enables that customers get information from the accounting service company timely.  For accounting service company savings are hidden in spending time for entering data, controlling data, exchanging documents and preparing reports.  The accounting service company can tender its services to more customers for reasonabe prices and of better quality.  Approximately 2.000 of companies are ready to rent a software by an ASP.  Renting the ASP services enables that customers get information from the accounting service company timely.  For accounting service company savings are hidden in spending time for entering data, controlling data, exchanging documents and preparing reports.  The accounting service company can tender its services to more customers for reasonabe prices and of better quality.

16. ASP model 1.Interested accounting service companies decide to establish a joint-stock company, which will be the ASP provider for their own needs and the needs of their customers. 2.Interested accounting service companies unite into a new company, which will then offer both services: renting software and accounting services. 3.One of existent software companies is motivated to establish ASP services. This survey proves that the market needs such service at least for accounting service companies and their customers. 1.Interested accounting service companies decide to establish a joint-stock company, which will be the ASP provider for their own needs and the needs of their customers. 2.Interested accounting service companies unite into a new company, which will then offer both services: renting software and accounting services. 3.One of existent software companies is motivated to establish ASP services. This survey proves that the market needs such service at least for accounting service companies and their customers.

17. The ASP will replace an ownership model in the future. The only question is not if it will be happen but when will be happen. First come, first served! The ASP will replace an ownership model in the future. The only question is not if it will be happen but when will be happen. First come, first served!