3. Premiere Technologies, Inc., a fast-growing supplier of communication services in more than 30 countries, provides an example of successful use of an ASP. Premiere began to implement an enterprise resource planning (ERP) system and found that whenever there was a problem or call to work on a ‘‘revenue producing’’ information system, all resources were diverted from the implementation of the ERP.

Premiere decided to outsource the ERP applications. The ASP not only came in to help plan how to best make the ERP system successful, but it also bought and maintained the servers on which the ERP runs, installed and configured the ERP software, and staffed the help desk to make the deployment smooth. When Premiere acquires a new company, something they do regularly, the ASP takes care of incorporating the new acquisition into the ERP. By one estimate, Premiere saved about $3 million over five years by using the ASP instead of doing it themselves.48

a. Discuss the advantages an ASP offers Premiere Technologies, Inc.

b. What possible risks are associated with Premiere’s use of an ASP?

c. What would determine which application(s) to give to an ASP versus the ones to keep in house?

d. Premiere Technologies was seven years old when it turned to using ASPs. When would it make sense to use an ASP for start-up companies?