Application service providers, so much on the IT manager’s horizon these days, can provide a powerful way to get good, flexible, useful IT in fast and without some of the pain. Linda Davies reports on Swedish Blåklaeder’s experience.
Blåklaeder, Sweden’s second largest manufacturer of work clothes, has redefined its IT strategy to take advantage of an ASP (application service provider) offering. “We have companies in Sweden, Norway, Germany and Benelux as well as manufacturing facilities in Vietnam,” says Jerry Jensen, IT director. “We are expanding fast, growing internationally and soon we will be moving into other European countries. In order to support our vision we need to have a completely different IT platform on which to develop our business.
“We need 99.999% availability, seven days a week, 365 days a year; we need multi-language support. And to manage our business the way we want, we need access to completely different systems and applications that will support our internal business processes. This level of knowledge is completely outside our existing areas of expertise – we are good at designing and making clothes, not running diverse IT platforms.”
ASPs provide IT as a service, deploying, hosting, managing and providing access to applications from their own facilities. According to analyst IDC, over 1,000 companies world-wide claim to be ASPs, and more will become ASPs or adopt ASP delivery models for their products. The value to manufacturers is that they gain access to a new application environment without the up-front investment in licences, servers, expensive IT people and other resources.
Pay as you go
The ASP owns and takes full responsibility for the application: all you pay for is what you use. Also, applications can be deployed much more quickly and generally there is a higher focus on those projects that add real value to the business. As Chris Cohen, managing director of Vizola, which produces an ASP-delivered collaborative data management product for small electronic engineering companies, observes: “Taking a new product to market faster is a key issue for manufacturers.”
However, it’s important to choose an ASP that can offer the range of integrated applications and services that your business needs. Errol Rhoden, manager enterprise solutions at ASP Genuity: “The issue from a manufacturer’s perspective is that they must be certain that their partner ASP is going to be able to deliver these critical applications to them – anytime, anywhere, any place. If this activity is core to your business, then check how available and how reliable the service is. Where is the redundancy if the service goes off the air in one part of the world? How do you get access to your data and applications?”
Blåklaeder chose Intellinet, an established ISP (Internet service provider) and one of the first ASPs in the Nordic region, as its ASP partner. “Small businesses have to meet the same challenges as large ones, only with much lower levels of internal technical resources,” says Hermund Slaatsveen at Intellinet. “This is where Intellinet comes in – with our ASP model we can enable them to maximise their investments in technology in the best possible way. By sharing our technical knowledge and expertise among a group of smaller customers, they can all enjoy the same levels of technical resources as a large corporate.”
In Blåklaeder’s case, in addition to providing standard financial, business applications and CRM tools, Intellinet is working with the firm to identify and then deploy under the ASP model, specialist software – for example a clothing sizing application – specific to its industry.
“The actual underlying systems aren’t important to us,” says Jensen, “but our business processes are. It’s essential that our business is driving the technology. But equally the technology and the Internet are making more things possible. Vendors are providing a platform to deliver the service from, and communications technology has made it possible for businesses to do so much more.”
Blåklaeder recognises that the open European community trading arena is a competitive and tough market to play in. “It means that we need good products and the ability to do business with our customers in any way they want. This is what is driving us to move our business functions over to an ASP platform. Because, in order to compete successfully, we have to change our business processes and for that we don’t only need hardware and software, but also the technical skills that go with this leading edge environment – that’s what we get from our service provider.”
Currently, Blåklaeder is testing the system in its Norwegian offices, and has around 20 thin client users now getting Microsoft Office applications, financials, order processing, stock control and communications. Collaborative working tools, workflow applications as well as an ERP (enterprise resource planning) application package, are to be added in due course. “We are looking for leading-edge applications,” says Jensen. “We want to develop new ways of working and doing business and we don’t want the technology to hold us back.”
As part of the vision, Blåklaeder wants to open its systems to both customers and suppliers. “Tighter collaboration with suppliers and customers is going to be essential,” observes Jensen. “Customers should be able to manage their own accounts with us, to check order status, credit lines and access our systems in order to better manage their own business needs.”
The bottom line
The problems associated with implementing, supporting and managing technology are a major challenge for many manufacturing companies. The ASP model, if there is a fit between services offered and the vision of the two parties, could provide a cost effective and efficient way for companies to meet these technology challenges. Rapid deployment of new technologies, access to better IT systems, resources and expertise all delivered on a pay-as-you go funding model could start to create momentum for the ASP market. It may just be time to re-consider your IT strategy.
The bottom line is that Blåklaeder’s example shows how an ASP can allow smaller, fast-changing manufacturers to get better IT more quickly to respond to their needs – delivering new services, ways of working and real competitive advantage. “We can now focus on our core operations, yet have access to technologies that will allow us to develop our business,” says Jensen.
“Intellinet gives us access to the technologies and platforms that are much better than those we could afford – not just in money terms, but also in terms of the people and skills needed to implement, and manage and support those systems. We now just buy a service: IT has become like electricity – you just pay a price per user, per month and with this kind of financial arrangement it’s much easier to budget for and bring on new projects.”
Author: Linda Davies