How to Select an ASP Treasury System Provider
ASP stands for Application Service Provider and is a means by which a company can outsource the technical management of their system to a service provider. The key difference between an installed treasury system and an ASP treasury system is the word service. The service that is offered with the treasury workstation is important to understand as you make your system selection. It is very different from the Installed solutions that we have come to know and each service provider’s service offerings vary significantly. Treasury ASP service providers typically offer some or all of the following services with their ASP offering:
IT Hardware and System Hosting – The service provider provides hardware, operating systems, network infrastructure and database licenses and hosts the application in a secure environment. Clients have access to this environment via a secure Internet address. It is important to understand the service levels involved in hosting your system. How secure is your data and the environment? How often will you have access to your data? How much down time should you be prepared for? How often is my data backed up? These are all questions that the service provider should be able to easily answer. You should expect your service provider to provide a minimum of 48-hour disaster recovery, 99.9% uptime, and a hardened site with full backup and restore capabilities.
SAS 70 Certification – This ensures your data is protected. SAS 70 is an audit requirement, which certifies the controls and security of the offering and is explained in more detail below. SAS70 audit results are a requirement for Sarbanes Oxley compliance since the information from your treasury system impacts your financials and any service provider that does not offer a SAS70 certificate should not be considered.
Bank Data Aggregation and Enrichment – There are two main approaches to retrieving data and communicating with your bank. The first is the full service approach. The second is the do-it-yourself approach.
In the full service approach, your service provider will act as your data aggregator and ensure that the data is normalized, enriched, and processed in a timely manner. The service provider should be able to achieve a high level of availability and straight through processing. The do-it-yourself model requires the user to monitor the process and perform error resolution. The service provider, in this case, provides only the tools needed to link to the bank.
There are obvious cost implications between the two approaches. This is something that treasury spends time on each day that can be outsourced to your ASP provider. This is a key differentiator between an installed treasury system and an ASP and is important point to consider when evaluating the cost and the return on your investment.
Upgrades – The frequency and the size of the upgrades should be considered. The ASP service provider is responsible for the rollout, testing, and distribution of all of the releases. With an installed package, the client has more control over the timing but typically bears the cost of the technical upgrade and in-house functional testing. This is another key point to consider when evaluating the cost of an ASP over an installed solution.
Ease of Use/System Access – There are two general approaches that service providers take when providing an ASP Service. Some service providers make their installed systems available by using terminal emulator software such as Citrix or Windows Terminal Server. Other offerings have been developed from the ground up and are using web technology and were built with remote access in mind. As a general rule, the former is more expensive, harder to use and deploy. However, they may offer a more complex set of functionality for more complicated environments. The latter, tend to be less expensive and easier to deploy and therefore are an attractive option for the average treasury operation.
IT Implementation – The cost of the implementation is normally reduced with an ASP because the service providers take on the task of setting up a database and performing all of the IT tasks.
SAS 70
Years since product launch – As when evaluating any service provider, it is important that you ask how long their ASP has been in production and how many clients are actively using it. The stability, performance, and availability of the offering are critical in a remote hosted solution. The number of years in production is normally a good indicator of how well these are being managed. Additionally, most service providers rely on their customers to provide feedback to enhance their product offering. Service providers with a large client base and a long history have usually progressed past all of the growing pains that inevitably come with any new product or service launch.
Hosting Center – This is the technical facility where your treasury system is located. It is important to understand the security, availability, and location of the hosting center. Some vendorservice providers host their application out of their local office’s computer room. This environment allows them to offer the hosting service for very little cost but won’t be able to offer SAS 70 compliance. VendorService providers who have hardened, secure hosting facility will provide things like power backup, automatic fail over, disaster recovery and highly controlled security access.
Product Features – There are vendorservice providers that provide a wide variety of functionality ranging from basic cash management through to handling more complex instruments such as swaps and FAS Reporting. The level of offering is typically tied to the level of offering of each company’s installed product. It is important to choose a vendorservice provider that meets your requirements now as well as anticipated functional requirements.
Support Infrastructure – Support is much more important in an ASP environment because you are solely dependent on your vendorservice provider. The vendorservice provider needs to have enough people to manage all technical and functional support.
Service Levels – When considering service levels, you should include system up time, data availability, data security, issue resolution, upgrade frequency, and support hours. VendorService providers will offer a variety of service levels each of which has a direct impact on cost. Keep in mind, in some instances; a low service level could jeopardize your Sarbanes Oxley compliance.
Service Offering and Price – Service providers offer a range of services and are usually able to configure a solution that meets your individual requirements. The kinds of services you should expect to have available to you and have included in the monthly price are as follows: