As evidence relating the reality and basic features of the ASP market continues to grow, there begins to be less concern about confirming that any structural economic shift has continued historically, and more concern about understanding how the ASP industry is performing, and its impacts on productivity, investment, corporate capital formation, labour force composition, and competition. The relationship between the traditional outsourcing and the "latest wave" e-sourcing on the one hand, and Internet investment productivity on the other, is at the centre of the IT strategic problem confronting corporate management in the 21st century.

Intelligent Enterprise Business Environment

An intelligent enterprise exists within several environmental elements. These are the enterprises and individuals that exist outside the intelligent enterprise and have either a direct or indirect influence on its business activities (see Diagram 1). Considering intelligent enterprises are operating in different sectors, area of emphasis and with different policies and strategies, the environment of one enterprise is often not exactly the same as the environment of another.

The business environment for intelligent enterprises includes the enterprise itself and everything else that affects its success; such as competitors, suppliers, customers, regulatory agencies, and demographic, social and economic conditions. A properly implemented ASP business model would provide the means of fully connecting an intelligent enterprise to its environmental elements. As a strategic resource, ASP helps the flow of various resources from the elements to the enterprise and through the enterprise and back to the elements (see Diagram 1). Some of the more common resources that flow include information flow from customers, material flow to customers, money flow to shareholders, machine flow from suppliers, and personnel flow from competitors and workers' union.

Looking at the Diagram 1, one can see a generalized theory of enterprise's perception (Little, 1999). The theory is sufficiently imaginatively motivated so that it is dealing with the real inner core of the ASP problem—with those basic relationships which hold in general; no matter what special form the actual case may take

An intelligent enterprise can succeed only by adapting itself to the demands of its external environment, which is often represented by a number of groups (formally called stakeholders) that affect the organisation's ability to achieve its objectives or those affected by it. Stakeholders other than participants and customers form another important part of the context. Stakeholders are people with a personal stake in an ASP system and its outputs even if they are neither its participants nor its customers. Permanent among such groups are customers, distributors, competitors, employees, suppliers, stockholders, venture capitals, trade associations, government regulators and professional associations. An important role for the information systems is to keep the organisation informed of the activities of all these stakeholders.

Zwass describes an organization as an artificial system (Zwass, 1998). He further defines an organization as a formal social unit devoted to the attainment of specific goals. With notification that a business enterprise, as a system, has to generate profit though it may also pursue other objectives, including employment provision, and contributing to its community generally. Zwass also restricts the value measurement of an artificial system to two major criteria: effectiveness (the extent to which a system achieves its objectives) and efficiency (the consumption of resources in producing given system outputs) (Zwass, 1998).

Considering that intelligent enterprises compete in an information society, the requirements for successful competition depends on the environment. In the case of ASP, such an environment presents several serious challenges, and the role of intelligent enterprises information systems has evolved over time as competing enterprises attempt to meet these challenges. Few enterprises have, however, identified opportunities for deploying strategic information systems that have proven success in the competition process by analysing the forces acting in the marketplace and the chains of activities through which they deliver products and services to that marketplace.

Infrastructure Issues

Infrastructure is the resources the system depends on and shares with other systems. Infrastructure is typically not under the control of the systems it serves yet plays an essential role in those systems. For ASP, the technical infrastructure typically includes computer hardware, telecommunication facilities and appropriate software designed to run on the Internet. Examining infrastructure may reveal untapped opportunities to use available resources, but it may also reveal constraints limiting the changes that can occur.

Evaluation of infrastructure is often difficult because the same infrastructure may support some applications excessively and others insufficiently. Drawing from Porter and Millar's theory that" Information systems are strategic to the extent that they are used to support or enable different elements of an enterprise's business strategy, this paper proposes a framework that IS in larger organizational systems may enable their effective operation or may be obstacles (Porter & Millar, 1985). In an earlier paper, we use the United Kingdom's National Health Service's system Infrastructure and Context as two distinct means of determining impact on larger systems (Guah & Currie, 2002).

Infrastructure affects competition between businesses, geographic regions, and even nations. Inadequate infrastructure prevents business innovation and hurts intelligent enterprise efficiency. While every international businessman/women can see that things have changed vastly in most of Africa and South America, the significance of infrastructure as a competitive enabler or obstacle has clearly not changed. That is because infrastructure consists of essential resources shared by many otherwise independent applications. A local region's physical infrastructure includes its roads, public transportation, power lines, sewers, and snow removal equipment. Its human and service infrastructure includes police, fire, hospital, and school personnel. A region's physical and human infrastructure can be either an enabler or an obstacle and is therefore, a central concern in many business decisions. The importance of certain IS infrastructure elements serve as a key motivation for the successful implementation of ASP. The required IS infrastructure raises a broad range of economic, social, and technical issues such as: Who should pay for infrastructure? Who should have access to/control over them and at cost? Which technology should it include? Where ASP is involved, the economic question often puts telephone companies against cable companies, both of whom can provide similar capabilities for major parts of the telecommunications system. From certain view points, it can be considered the responsibilities of government to insure a national IT infrastructure is available as a key motivation for the previous buzz words "information superhighway."

Just as local regions depend on the transportation and communication infrastructure, infrastructure issues are important for ASP implementation and operation. These systems are built using system development tools; their operation depends on computers and telecommunication networks and on the IS staff. Deficiencies in any element of the hardware, software or human and service infrastructure can cripple an information system. Conversely, a well-managed infrastructure with sufficient power makes it much easier to maximize business benefits from ASP.

Inadequacy of Existing Infrastructure

Most people would agree that motorways such as the M4, M6 and M1 together with railways up and down the country are a part of the UK's transportation infrastructure. Transportation is vital to the economy; it makes the movement of goods and people possible. Economic infrastructure provides a foundation on which to build commerce. Is there a technology infrastructure? At the national level, there is a communications infrastructure in the form of networks that carry voice and data traffic. In recent years, the Internet has become an infrastructure that ties a wide variety of computers together. The Internet highlights the fact that an innovation which began as an experiment can mature to become part of the infrastructure.

Infrastructure begins with the components of ASP, hardware, telecommunication networks, and software, as the base. A human infrastructure of IS staff members work with these components to create a series of shared technology services. These services change gradually over time and address the key business processes of the intelligent enterprises. Non-infrastructure technology is represented by applications that change frequently to serve new strategies and opportunities (Weill, Broadbent & Butler, 1996).

It sounds in practice that much of the justification for infrastructure is based on faith. Weill did find one firm with a creative approach to paying for infrastructure (Weill, 1993). The company required careful cost/benefit analysis of each project. When this showed higher than necessary benefits, it was loaded with infrastructure costs to take up the slack. In essence, the company added in" infrastructure tax" to projects, not unlike airline ticket taxes to pay for airports.

Infrastructure is vital, but investments in it are hard to justify if you expect an immediate return. The Singapore example presents the classic case for infrastructure; a small amount of investment and guidance creates a facility on which many organizations can build. Networking in Singapore has the potential to transform the nature of commerce on the island and to help achieve the city-state's goals for economic development.

Telecommunications: Facilitating ASP Emancipation

Telecommunications is the electronic transmission of information over distances. In recent years, this has become virtually inseparable from computer with a paired value that is vital for integrating enterprises. Most enterprises in the 21st century have access to some form of telecommunication network—which is simply an arrangement of computing and telecommunications resources for the communication of information between distant locations. These enterprises are usually using one of two types of telecommunications networks which can be distinguished by their geographical scope: Local Area Network (LAN) and WAN. LAN is a privately owned network that interconnects processors, usually microcomputers, within a building or on a compound that includes several buildings. It provides for a high-speed communication within a limited area where users can share facilities connected to the network. On the other hand, WAN is a telecommunication network that covers a large geographical area which large businesses need to interconnect their distant computer systems. Computer networks differ in scope from relatively slow WAN to very fast LAN. There are several topologies and channel capacities responsible, which the objective of this chapter does not permit a detailed exploration.

ASPs use WAN as a fundamental infrastructure to employ a variety of equipment so that the expensive links may be used efficiently. The various equipments control the message transfers and make sharing the links among a number of transfers possible. An increasing number of ASP customers have user PCs that are connected into a LAN that communicate with the WAN via a gateway. In certain cases, the ASP may offer common carriers and provide value-added service that can be combined with private networks to create an overall enterprise network.

As an e-commerce phenomenon, a few of the essentials of an ASP infrastructure are Common Carriers, Value-Added Networks, Private Line and Private Networks. Common carriers are companies licensed, usually by a national government, to provide telecommunications services to the public, facilitating the transmission of voice and data messages. As most countries permit only one common carrier, the service can be broken down and leased as value-added networks to vendors who then provide telecommunication services to their own customers with added values that could be of various sophistications. For increase speed and security, an enterprise may not want to share with others and could take the option of leasing its own private lines or entire networks from a carrier. It has been proven that leasing links can result in savings from high-volume point-to-point communications.

These are the apparatus through which an ASP uses telecommunications to give its customer the capability to move information rapidly between distant locations and to provide the ability for their employees, customers and suppliers to collaborate from anywhere, combined with the capability to bring processing power to the point of the application. As shown earlier in this chapter all this offers an ASP customer the opportunities to restructure its business and to capture high competitive ground in the marketplace.

Issues of Security

Considering the ASP industry is riding on the back of the Internet's overnight success, the highly publicized security flaws have raised questions about ASP suitability to serve as a reliable tool for the promotion of Intelligent Enterprises for the 21st century. An ASP vendor could be forgiven for thinking the primary service to its customers is to provide connections between possibly millions of computers linked to thousands of computer networks. However, the prevention of unauthorised users who steal information during transmission, who sabotage computers on the network, or who even steal information stored in those computers are major parts of the vendor's responsibilities. Exploiting this flaw might permit hackers to gain control of designated servers and then access or destroy information they contain. As long as these risks are not as far fetched as one might hope, customers would continue to be wary about the uptake of ASP business model (Currie, Desai, Khan, Wang & Weerakkody, 2003).

The many break-ins and other general security problems occurring with internet/ intranet demonstrate some of the risks of engaging in any form of business model linking to the Internet. Many ASP vendors have tried to reduce the danger using firewalls and encryptions but such maneuvers not only reduce risk they also reduce the effectiveness of a networked environment (see Diagram 2). The IT community has generally accepted that effective use of encryption and firewall techniques could eliminate much of the risk related to unauthorized access and data theft.

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Diagram 2: Proxy Server Protection System.

Does any mathematical encryption guarantee absolute security? No. Just as a physical lock cannot provide absolute safety, encryption cannot guarantee privacy— if a third party uses enough computers and enough time, they will be able to break the code and read the message. However, by choosing the encryption method carefully, designers can guarantee that the time required to break the code is so long that the security provided is sufficient. It is advisable that intelligent enterprises keep this principle in mind when thinking about Internet security. When someone asserts that an encryption scheme guarantees security, what they actually mean is that although the code can be broken, the effort and time required is great. Thus, an encryption scheme that requires a longer time to break than another scheme is said to be 'more secure.'

However, a good proportion of the SMEs surveyed did not appreciate that many ASP vendors have tried to reduce the danger using what is called firewalls—computers that intercept incoming transmissions and check them for dangerous content. Some fear that the mere process of downloading information across the Internet may entail hidden risks. As far as performance goes, some vendors are considering arrangements with national telecommunication giants for better data access facilities over WAN. The trend toward deregulating telecommunications must continue globally for data rates to become a much less important restriction in the future.

Overcoming Obstacles to a Commercial Future

The powerful trend toward a networked society has many components, starting with the fact that use of online networks is exploding. Intelligent Enterprises of the 21st century require tools that take advantage of the millions of people who have used computer networks for business and personal uses. These enterprises oomph on the fact that e-mails and electronic bulletin boards are not only commonplace in leading businesses but also used for purposes ranging from answering customer service inquiries to exchanging views about personal topics and politics. Reinforcing on these trends, ASP vendors are building the network capabilities into their products for Intelligent Enterprises to see the Web Services as an important turning point for commercial opportunities because it has made the Internet so much more accessible and adaptable for nontechnical business users.

Many obstacles are currently apparent, however, when one looks at the possibility that ASP will become a motivational tool for intelligent enterprises in the 21st century and a major determinant for the future of Internet influence on the world's population.

The areas of concern, mentioned in Table 1, relate to organization, security, online performance, freedom and control, competition and hype versus substance. The issue of organization is based on the way ASP has evolved. The ASP industry lacks the type of clear organization that would make it easy to use as a reliable and profitable business model. Although ASP vendors' former capacity was daunting and strategy was unproven, the advent of Web Services will make it far easier to comprehend and even adapt.

Table 1: Major Obstacles and Proposed Solutions.





Earlier capacity was daunting and Business strategy was unproven

Advent of Web services to make ASP far easier to comprehend and adapt.


Too many reported server break-ins and other general Internet/intranet security problems

Industry to emphasize efforts in protection machinery and firewall systems.


Telecommunication infrastructure available in the 1990 globally not sufficient to support requirements

Use of broadband services and improvement to infrastructure globally.


General negative press about lack of control on the Internet and risk to criminal accessing confidential data

Some form of regulation might be needed—of an international nature.


Business model does not encourage differentiation

Cooperation must be based on trust between vendors and individual customer.


Although ASP model was said to save cost and enticing to SMEs, very little evidence exist

Whether the great potential of ASP to SMEs will prevail over the sceptics' views remain to be seen. Web services is expected to provide that killer means of bridging the gap.

Looking back at the Internet's history, one sees many incidents that raise issues about freedom and control. Major Western nations (U.S., UK, France, etc.) have either proposed or passed legislation related to criminal penalties for transmitting, accessing or intercepting data of the Internet illegally. Although the Internet has been unregulated in the past, serious consideration of an ASP-like business model could result in more legislation.

ASP as Competitive Investment

The fundamental definition of what constitutes a mission-critical application remains relatively unchanged; it is those applications where even the smallest amount of downtime will have a significant negative impact on an enterprise's operational efficiency and bottom line. But the nature of what intelligent enterprises now deem to be mission-critical systems has altered with a far greater range of applications.

One way to interest a manager in a new innovation is to show that a competitor is planning to adopt this innovation. Intelligent enterprises do respond to competition to avoid being put at a disadvantage. Banks provide a good example of investment in technology for competitive reasons. In an early study of ATM deployment, Banker and Kauffman found that ATM adoption provided a limited advantage to certain banks (Banker & Kauffman, 1988). The findings suggest an early advantage from installing ATMs and joining a large network. Customers clearly like ATMs and the interconnections to the banking network it provides; there is very little reason for a bank not to join an ATM network. In fact, because competitors offer ATMs and are in networks, a new bank is almost forced to invest in this technology. In 2002, ATMs are certainly competitive necessities for banking. Some banks are closing expensive branches and installing ATMs instead. However, since all banks can follow this strategy, it is unlikely one will gain a significant advantage from it.

The airline industry offers another example of IS as a competitive necessity. To start an airline in the 21st century—especially in the UK and U.S., you would have to invest in some kind of ASP service for making a reservation. The travelling public has become accustomed to being able to make reservations and obtain tickets easily, either physically or electronically.

Investments for strategy and to meet a competitive challenge may not actually benefit the enterprise making them. An enterprise may be forced, as in the two examples mentioned earlier, to adopt new technology to stay even with the competition. In this case, it is not so much return on investment in ASP, but rather what is the cost of not investing? Will an enterprise lose customers and market share because it does not have a particular technology in place? Can you enter a new line of business without investing in the technology that competitors have adopted? What kinds of services do customers expect?

ASP Implementation Strategies

The strategy one chooses for implementation has a direct impact on the level of investment required for an ASP initiative. One strategy is to hire external expertise; either to develop the entire application or to work with the internal IS staff. Consultants have been available for developing ASP investments since the first systems appeared. Consultants will provide advice and many will actually undertake the development of the IT application. Carried to an extreme, the enterprise can outsource the development and even the operation of an ASP application. There are a number of network providers who offer complete xSP services (vertical, horizontal, pure play, etc.) and an enterprise might outsource its electronic data interchange efforts to them.

The major advantage of using consultants and outsourcing is the availability of external expertise. SAP is so complex and difficult to implement that most intelligent enterprises include a budget for help from a consulting enterprise that has extensive experience with this package. When the enterprise enters into a consulting or outsourcing agreement for an ASP initiative, it should be aware of the need to manage its relationship with the supplier. Enterprises that have delegated the responsibility for developing a new ASP application to an outside enterprise generally have been unhappy with the results. Managers still have to monitor the agreement and work with the supplier. There are examples of many very elaborate management committees and structures established at enterprises like Microsoft, UNISYS and IBM to manage outsourced IS.

Evidence within the past three years has shown that situation can develop in which large numbers of insurmountable problems arise with issues that, in an ASP vendor's opinion were going to cause lasting impediments to the ultimate systems implementation. Among several vendor options were these primary four:

  1. Implemented the IS as best as they could within these constraints;

  2. Demonstrated unpalatable objection to the problem owners and set conditions for eventual completion of work;

  3. Strive to ignore the problems and created the system as if they did not exist; and

  4. Completely refused to continue work regardless of system phase.

While each of the above courses has quite a serious implication, the first option was most taken.

Intelligent Enterprises should determine the uptake of ASP based on their long-term IS plan and on requests for information systems by various stakeholders, i.e. the prospective users, corporate management, internal IS team, customer and supplier accessibility. It is not sufficient to implement ASP for the competitive edge the system may give the enterprise or the high payoff the system promises. The past phase of ASP has proven that not all systems that appear promising will produce sufficient business results to justify their acquisition. However, it is no surprise that certain intelligent enterprises still find it difficult to evaluate the worth of prospective new technology.

Borrowing from Checkland's Human Activity System (HAS) concept, an ASP vendor will have problems with certain stakeholders and surrounding issues (Checkland & Scholes, 1990):

  1. Client: the systems beneficiary can be difficult to identify due to the outsourcing nature of ASP business arrangements.

  2. Owner: the eventual system owner may be anywhere between the negotiating party to a fourth party somewhere and in some cases not able to participate in the original negotiations.

  3. Actor: these are often individuals and groups—of various types and with various needs—who are usually involved in the system at different stages.

  4. Objective: what the project is intended to achieve is highly dependent on the process and it can often be different for various users and stakeholders.

  5. Environment: the situation in which the system will be developed and implemented grossly affects the final outcome of the process.

  6. Expectation: there are often as many assumptions of a project as the number of times it is discussed. More important, these assumptions tend to change as one goes through various stages of the system development and implementation.

The issue here is not just one of investment; it also involves learning and time. There is a learning curve, sometimes quite steep, with new technology. If the enterprise has not developed a modern infrastructure over time, it will have to invest more for a new ASP initiative because of the need to build infrastructure. It will also have a longer development time as the IS staff learns about this infrastructure and develops the new applications that require it.

Problem, Solution or Opportunity?

One stimulus for ASP solution implementation is its intention to transform the enterprise. The investment in ASP is part of a larger change programme that is meant to enable intelligent enterprises' virtual and multiple-team structures. The resulted contributions can be described as part of the outcome of a general change effort. Change is also an opportunity. For most of the companies involved in our research, management decided on a desired organization structure and used IT investments to help create it. Managers planned for change and welcomed it as an opportunity to make the entire organization function better. Change is always a threat, as staffs are forced to alter behaviour that has probably been successful until now. However, as shown in some of the examples in this book, change is also an opportunity to reshape intelligent enterprises and make them more competitive.

The push toward greater connectivity is a major factor driving ASP investments in the 21st century. The UK's Department of Trade and Industry (DTI) has encouraged (some would say mandated) a certain level of EDI compliance for companies that wish to do business with it. Industry associations encourage companies to communicate electronically. Efficient customer response, EDI, Just In Time, continuous replenishment programs, and the Internet are all examples of different kinds of electronic connectivity.

For the successful implementation of ASP in the 21st century, organisations must maintain a socio-technical perspective, thereby avoiding the purely technological approach to achieving higher productivity. Rather balancing this act with the consideration of social and human aspects of technology brings the added value of creating a workplace that will provide job satisfaction. Such information systems must be designed to fit the needs of its users and the organisation at large and be capable of evolving as these needs invariably change. Such ethical considerations of information systems have moved into the forefront as information systems have become pervasive in modern businesses. Ethics, for the most part, involve making decisions about right and wrong and not necessarily about possible and impossible and remotely relates to production increase or decrease. The major ethical issues that have been noticed to be affecting intelligent enterprises information systems in the 21st century can be summarised into privacy, accuracy, property, and access.

In an effort to modernise, every challenging intelligent enterprise in the 21st century seems to be jumping on the ASP bandwagon. There comes a point when the industry analysts should implement the critical success factor (CSF). The CSF methodology, developed by John Rockart of Massachusetts Institute of Technology, is defined as those few critical areas where things must go right for the business to flourish, derives organizational information requirements from the key info needs of the individual executives or managers. CSF methodology is oriented toward supporting an enterprise's strategic direction. By combining the CSFs of these mangers, one can obtain factors critical to the success of the entire enterprise. Such an approach has been proven to be useful in controlling quality of the information system in certain vertical sectors (Bergeron & B gin, 1989).

Effects of ASP on IS Departmental Staff

Employee involvement is an employee's active participation in performing work and improving business process (Alter, 1996). The old-fashioned view of employee involvement—employee following the employer's instruction in return for a wage—encourages employees to be passive, take little initiative, and often view themselves as adversaries of the enterprise and its management. In contrast, truly involved employees feel a responsibility to improve their work practices with the help of managers and others in the enterprise.

ASP can directly affect employee involvement. ASP can generally be deployed in ways that increase or decrease employee involvement in their work. An ASP business model that provides information and tools for employees increases involvement because they reinforce the employee's authority and responsibility for work. On the other hand, an ASP business model that provides information to managers or quality inspectors but not their employees can reduce involvement by reinforcing the suspicion that the employee is not really responsible.

The human and service side of the infrastructure in intelligent enterprises often gets short shrift in discussions of new systems or system enhancements. Business professionals are often surprised at the amount of effort and expense absorbed by the human infrastructure. The tendency toward organizational decentralization and outsourcing of many system-related functions makes it even more important to include human infrastructure in the analysis of new systems.

Human Factors in ASP Technologies Development

The rapid rate of development of these technological miracles, as they would have been viewed from an earlier age, has created a momentum of its own, and it is not surprising that concomitant concerns have also developed about the impact and influence of ASP on human society. The shrinking of time and space enabled by ASP has benefits in terms of task efficiency and wider capability for communication, but it is less obvious that ease of management or even stress at work are improved at a deeper level (Markus, 1983).

The above discussion should not be taken to imply that ASP models determine the direction of intelligent enterprise management. The development and the use of an ASP solution is within management control and there is no inevitable future path. However, it can be argued that the quantity and quality of debate about the human and societal impact of computers and related technology has not matched that rate of development of the technologies themselves (Walsham, 1993). For example, the debate concerning ASP and its Web Services in intelligent enterprises largely centres on questions of strategic importance and value-for-money rather than deeper issues of human job satisfaction and quality of life.

While the mechanistic view of enterprise formed the early foundation of an intelligent enterprise management, the image of enterprises as organisms has arguably been the most influential metaphor for management practice over the last few decades. The corporeal view sees intelligent enterprises as analogous to living systems, existing in a wider environment on which they depend for the satisfaction of various needs. The origins of this approach can be traced back to the work of Maslow, which demonstrated the importance of social needs and human factors in work activities and enterprises effectiveness (Maslow, 1943). It then emphasized that management must concern itself with personal growth and development of its employees rather than confining itself to the lower level needs of money and security.

With respect to social relations as considered in Web models, it is important to note that participants include users, system developers, the senior management of the company, and any other individuals or groups who are affected by the ASP business model. Kling notes that computing developments will be attractive to some enterprise participants because they provide leverage such as increasing control, speed, and discretion over work, or in increasing their bargaining capabilities (Kling, 1987). Fear of losing control or bargaining leverage will lead some participants to oppose particular computing arrangements, and to propose alternatives that better serve their interests.

It could be said that the above comprises the analysis of what Checkland defines as the HAS (Checkland, 1983). HAS can be seen as a view on the social, cultural, ethical and technical situation of the organization. Both models deal with one old problem which continues to trouble information systems today. That is thinking about the means by which to deal with the two aspects of any new system (human beings and technology) and how they can best communicate with each other. As it relates to ASP, the industry must bring together the right mix of social (human resources) and the technical (information technology and other technology) requirements. Here is where the key hardware and identified human alternatives, costs, availability and constraints are married together.

A synopsis of an IS problem usually appears chaotic and incomprehensible. An example is the NHS IS strategy as of December 2001 (Guah & Currie, 2002). The use of a problem framework will not only show the essence of a view of the problem context but also demonstrates that getting the context and meaning of the problem right is more important than presentation. The primary tasks should reflect the most central elements of what is often called 'problem setting.'

ASP vendors should demonstrate, when reviewing a given situation, that any incoming information system is intended to support, develop, and execute primary tasks originally performed by humans. They should be aware of issues that are matters of dispute that can have a deleterious affect upon primary tasks. In terms of the IS, the issues are often much more important than the tasks. Considering it is not possible to resolve all issues with any given technology, they should always be understood and recognized. That is because reality really is complex, so the ASP industry should never approach a problem situation with a conceited or inflated view of its own capacity. Not all problems can be mapped, discussed and designed away. Often the ASP industry will be required to develop a form of amnesia towards certain problems that are either imponderable or too political, in terms of the organization or business (Guah & Currie, 2002).

A detailed understanding of the above will help in providing a reasonable answer to certain essential questions that are necessary for an ASP to satisfactorily produce working solutions for its customers. A few of the general questions are: Who is doing what, for whom, and to what end? In what environment is the new system to be implemented? To whom is the final system going to be answerable? What gaps will any addition to the old system fill within the new system?

Social-Technical Issues

An intelligent enterprise normally has separate objectives when looking at IS in terms of social and technical requirements. While the social objectives refer to the expectations of major stakeholders (i.e., employees), the technical objectives (Table 2) refer to capacity of the organization as a whole to react to key issues.

Table 2: Social-Technical Benefits of ASP.



Being relatively self-sufficient

Informing management

Providing a quick service

Improving timeliness

Providing job satisfaction

Improving communication

Providing professional satisfaction

Increasing info-processing capacity

Improving division's professional status

Providing a long-term facility

Because the social objectives (Table 2) of an ASP solution can broadly be seen as the expectations of the system in terms of the human beings who are going to be working with it, they will vary from one project/contract to another. As they are often undervalued, management does not tend to feel that the social needs of a system are as critical for system development as technical issues. They may involve different ways of organizing individuals to undertake the work required for the system, simultaneously achieving the authoritative influence.

The technical objectives (Table 2) are the primary tasks one hopes that the system will need to undertake and would therefore, need to be very specific. It is important that ASP vendors indicate to their customers the depth of detail it needs to go into.

Selecting Information Systems

ASP solutions come in various forms. Ideally, selecting among the alternatives should be based on clearly stated decision criteria that help resolve tradeoffs and ASP uncertainties in light of practical constraints and implementation capabilities. The tradeoffs for intelligent enterprises include things such as conflicting needs of different business processes, conflicts between technical purity and business requirements, and choices between performance and price. The uncertainties include uncertainty about the direction of future technology and about what is best for the enterprise. Implementation decisions are almost never made by formula because so many different considerations don't fit well into understandable formulas.

Although these ideas provide some guidance and eliminate some options, there is no ideal formula for deciding which solution and capabilities to invest in. Many IS departments could double and still not have enough people to do all the work users would like. In practice, many IS departments allocate a percentage of their available time to different project categories, such as enhancements, major new systems, and user support. But with each category, they still need to decide which systems to work on and what capabilities to provide. Cost-benefit may help with these decisions.

Cost-benefit analysis is the process of evaluating proposed systems by comparing estimated benefits and costs (Alter, 1996). While the idea of comparing estimated benefits with estimated costs may sound logical, there are several limitations in terms of the ASP business model. One could see the appropriateness when the solution's purpose is to improve efficiency. But, where the system is meant to provide management information, transform an enterprise or even to upgrade the IS infrastructure, it becomes terribly difficult to predict either the benefits or the costs of the solution. Considering cost-benefit analyses are usually done to justify someone's request for resources, the numbers in a cost-benefit study may be biased and may ignore or understate foreseeable solution risks (Alter, 1996). Key issues for cost-benefit analysis include the difference between tangible and intangible benefits, the tendency to underestimate costs, and the effect of the timing of costs and benefits.

Agent-Based Approach to ASP

Most of the ASP applications mentioned in this chapter automate some aspect of the procurement processes; thereby helping decision makers and administration staff to complete their purchasing activity. An agent-based approach to ASP is well equipped to address the challenges of multi-market packages to e-procurement. This section of the paper is devoted to looking at the goal driven autonomous agents which aims to satisfy user requirements and preferences while being flexible enough to deal with the diversity of semantics amongst markets, suppliers, service providers, etc.

Service agents within the ASP model are the system's gateway to external sources of goods and services. These agents are usually aware of the source's market model and of the protocols it uses (Zhang, Lesser, Horling, Raja & Wagner, 2000). Service agents are not only able to determine which requests it can service, but also proactively reads these requests and tries to find an acceptable solution.

Agent technology has been widely adopted in the artificial intelligence and computer science communities. An agent is a computational system that operates autonomously, communicates asynchronously, and runs dynamically on different processes in different machines, which support the anonymous interoperation of agents. These qualities make agents useful for solving issues in information intensive e-Business, including speaking ontology, advertising, service exchange, and knowledge discovery, etc. In the ASP industry, the interoperation and coordination across distributed services is very important. The desire for more cost efficiency and less suboptimal business processes also drives the employment of agent technology in the ASP business model. This has resulted to the support of agent technology; more ASP agents seem to be appearing on the Internet providing e-Services as well as exchanging information and goods with other agents. The interoperation of ASP agents leads to the formation of the e-Business Mall, which is an interaction space of agent communities under various business domains.

As indicated in this chapter and elsewhere in this book, the significant problems in the ASP business model are the information deficiency and asymmetry between the business participants. It is also difficult for each participant to exchange information products and services in an efficient manner, and to partner in an Intelligent Enterprise. The social nature of knowledge sharing—especially critical business knowledge— carries high complexity. The capability advertisement and knowledge discovery, upon which the agent-based approach to ASP depends, can only be achieved by message interaction among dynamic processes. Knowledge or service relevance is one basis for such an approach to be introduced to real life business procedures and service contracting in the 21st century by Intelligent Enterprises.

Tangible and Intangible Benefits

Benefits are often classified as either tangible or intangible. The tangible benefits of ASP solution can be measured directly to evaluate system performance. Examples include reduction in the time per phone call, improvement in response time, reduction in the amount of disk storage used, and reduction in the error rate. Notice that tangible benefits may or may not be measured in monetary terms. However, using a cost-benefit framework for an ASP solution requires translating performance improvements into monetary terms so that benefits and costs can be compared.

Intangible benefits affect performance but are difficult to measure because they refer to comparatively vague concepts. A few of the intangible benefits of a solution are:

  • Better coordination

  • Better supervision

  • Better morale

  • Better information for decision making

  • Ability to evaluate more alternatives

  • Ability to respond quickly to unexpected situations

  • Organizational learning

Although these goals are worthwhile, it is often difficult to measure how well they have been accomplished. Even if it is possible to measure intangible benefits, it is difficult to express them in monetary terms that can be compared with costs. All too often, project costs are tangible and benefits are intangible. Although hard to quantify, intangible benefits are important and should not be ignored. Many of the benefits of IS are intangible.

The Role of Government

Having articulated these basic parameters it is now possible to focus upon specific policy issues of most immediate concern to western governments as they develop their agendas for Internet administration. Some of the issues affecting the success of the ASP business model are apparent now, but others remain on the horizon, not a problem of today but a potential one in the future:

  • Modernization of the machinery and process of government. This to include the electronic delivery of services and information.

  • Reform of intellectual property law to accommodate access to and exploitation of works via the Internet. This to include administration of Internet domain names on an international basis.

  • Facilitation of the development of e-commerce including national and international initiatives and measures to protect both suppliers and consumers operating within this electronic marketplace.

The Law of Confidence

The law of confidence protects information. Unlike copyright and patent law, the law of confidence is not defined by statute or derives almost entirely from class law. The scope of this branch of intellectual property is considerable and it protects trade secrets, business know-how and information such as lists of clients and contacts, information of a personal nature and even ideas which have not yet been expressed in a tangible form (Bainbridge, 2000). A typical example would be an idea for a new software program. The contents of many databases owned by intelligent enterprises will be protected by the law of confidence. However, the major limitation is that the information concerned must be of a confidential nature and the effectiveness of the law of confidence is largely or completely destroyed if the information concerned falls into the public domain; that is, if it becomes available to the public at large or becomes common knowledge to a particular group of the public such as computer software companies. Nevertheless, the law of confidence can be a useful supplement for intelligent enterprises to copyright and patent law as it can protect ideas before they are sufficiently developed to attract copyright protection or to enable an application for a patent to be made. Being rooted in equity, the law of confidence is very flexible and has proved capable of taking new technological developments in its stride.

Intelligent Enterprises of the 21st Century
Intelligent Enterprises of the 21st Century
ISBN: 1591401607
EAN: 2147483647
Year: 2003
Pages: 195 © 2008-2017.
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