Application service providers (ASPs) offer and manage outsourcing application services to many organizations via the Internet. Organizations outsource applications to ASPs to reduce upgrade and maintenance costs and to focus their efforts. on core competencies. To that end, it is essential for CIOs and senior IT executives to understand the dynamics of the ASP market, services provided, and outsourcing trends within their particular industries. This study identifies the critical success factors (CSFs) for ASPs to sustain the fierce competition in the outsourcing market. The CSFs include delivery of applications, efficiency in responding to demands, management of resources, assurance of 24/7 access, meeting IT needs, and economic distribution of applications. Moreover, the study highlights issues of concern involved in outsourcing internal applications via the Internet, such as security, reliability, quality of service, employees' concerns, and existing infrastructure, and provides managers with an action plan to address these concerns.
