Asp software survey

Local BC governments get bitten by the ASP: for the client, ongoing use of the software is virtually headache-free once implemented

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One respected theological following would have us believe that a great endeavour of man started simply with two people, a garden, an apple and an ASP. The endeavour described here starts innocently enough, in September 2000 with a message sent out on MISA B.C.'s e-mail list server by Rick Pratt, IT manager of the District of North Vancouver, inquiring as to which B.C. local governments are planning to replace their financial systems in the next few years. With the hope of initiating a modest group purchasing initiative, Pratt no doubt expected to hear from half a dozen B.C. municipalities. The response to this e-mail, however, went far beyond Rick's wildest dreams. No fewer than 16 local governments are planning to make a change sometime in the next three years. The response from many of these organizations implies that they are not entirely sure where to turn for their financial software.

Over the past five years, a number of high-profile B.C. municipalities have inked deals to purchase and implement software from major Tier 1 suppliers such as PeopleSoft, Oracle and SAP.. These deals were particularly notable due to the fact that the suppliers did not, at the time of the signing, have experience with the financial systems requirements of local government.

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Since that time, all of the companies listed above have successfully implemented their software in a local government setting. One would normally expect that these successes would be followed by a string of deals with the more numerous mid-sized municipalities (50,000 to 150,000 population) but this is not taking place. A few mid-sized local governments have made purchases from Tier 2 financial systems suppliers but many have chosen to either hang tough with their current software or purchase software from one of the few remaining municipal-specific vendors.

This situation begs the question: Why aren't the big Tier 1 suppliers making further penetration into the local government market? The answer is simple: the cost and the risks are too high. The licensing and implementation costs for most of the Tier 1 vendor offerings typically run in the multimillion dollar range. Senior government downloading, the loss of industrial taxpayers and an overall reduction in the rate of growth have beleaguered the finances of local governments in B.C. This has resulted in a general reduction in the ability to pay for big-dollar capital projects of any kind. For many, IT has suffered along with the other departments.

This, coupled with a case of sticker shock, has resulted in a considerable number of B.C. local governments choosing to hold their nose and tolerate their legacy financial software, focusing dollars and effort on other IT initiatives.

The smaller B.C. municipalities have encountered similar challenges in dealing with this issue. Since most don't have IT staff, their situations are not as well communicated to MISA B.C. as those of the larger municipalities. Most of the less-than-50,000-population municipalities have software from one of the three small municipalspecific software companies in B.C. It's quite common to find that many of the customers of each of these companies have plans to switch to one of the others in the near future. The number of converts is spread roughly evenly among the companies, implying that none of them is without merit, nor offering a perfect solution. Clearly a survey of these municipalities would identify a willingness to switch software providers if an affordable and state of the art solution could be found.

One possible solution to the local government software problem may lie in the recent Internet phenomenon known as an ASP. This is not the snake of biblical fame, but inevitably a computer industry acronym that stands for "Application Service Provider." The ASP typically offers software on a "pay as you use it" basis. The software is usually installed on a server located at the ASP's office. Each client has its own database on this server and gains access to both software and data over the Internet. Access may be gained via a Web browser-based interface or via application-specific client software. Clients are typically charged based upon some measure of their degree of use. This measure may include connect time, storage usage and transaction volume. All responsibilities for data backup, software updates and hardware maintenance usually lie with the ASP.

For the client, once implemented, ongoing use of the software is headachefree. If this sounds familiar, it should -- because in the 1960s and 1970s the same model of computer use was common, and in those days it went by the dreaded name "service bureau." The service bureau wasn't really a bad idea. The problem was that most of the companies offering such services in those days did so on costly mainframe computers that they couldn't afford to dump once competition was introduced in the form of privately owned mini-computers.

Most clients found the service bureau to be too expensive and too slow. This problem has been solved by the advent of low cost/high performance microcomputer hardware and client distributed processing technology. Today many Internetbased services effectively handle many more users than the largest of historical service bureaux with more than adequate user response time.

The ASP concept offers a unique opportunity to permit local governments of all sizes to get access to world-class financial software without the massive capital outlay typically involved. To achieve this it would take an unprecedented level of co-operation, compromise and commitment. Many lesser such co-operative ventures have collapsed due to the dissimilar interests, ambitions and priorities that inevitably confound the project.

Never before, however, have municipalities been more motivated by the economical challenges that exist today and, prior to the advent of the Internet, never before has the necessary infrastructure existed. The possibility exists that the ASP may be the model for municipal software of all types in the new millennium.