A supply chain is big and complex. It requires more time and manpower that many IT departments can give. That’s why some companies are letting an application service provider handle tasks for them.By now, you know all about ASPs. They promise to relieve IT departments of cost and resource headaches, but many have financial problems of their own. Farming out the most important technology implementation in the history of your company is a big bet. Companies should not take that bet unless they have no other choice. It’s best to maintain internal control over a system that critical.One who has taken the leap is John Strother, director of inventory and logistics at Seattle-based retailer REI. He hired SPS Commerce, a St. Paul, Minn.-based supply chain vendor that offers a hosted version of its execution applications. For a monthly fee, SPS sends the software through the Internet to REI, where Strother does not have to worry about keeping it up and running.Yet despite these advantages, Strother says REI has not been able to realize measurable ROI from its deal with SPS. He claims that’s because the vendor has been slow to help extend the technology to REI’s suppliers and to correct issues with data accuracy and system response time. Like so many companies in the ASP market, SPS’s distractions come from trying to stay alive. In March, SPS laid off just under 30 percent of its workforce, and the company’s CEO resigned.SPS officials say the company will be fine. Chief Strategy Officer and Executive Vice President Jim Frome notes that the company received a new round of financing in May and that sales in early 2001 were up from the same period in 2000. Strother has a plan B should SPS fail, but it hinges on the two resources he does not have: people and money. He would fight for the company’s software source code, buy equipment similar to what SPS has and move the supply chain applications in-house. How would REI pull that off? Strother doesn’t have an answer.“We haven’t budgeted for it,” he says. “That would be dealt with on a catastrophic basis.”Strother has not yet given up hope, however. He believes SPS has a viable revenue model, and he still believes his ASP deal will save him money over time. Related content BrandPost The future of trust—no more playing catch up Broadcom: 2023 Tech Trends That Transform IT By Eric Chien, Director of Security Response, Symantec Enterprise Division, Broadcom Mar 31, 2023 5 mins Security BrandPost TCS gives Blackhawk Network an edge with Microsoft Cloud In this case study, Blackhawk Network’s Cara Renfroe joins Tata Consultancy Services’ Rakesh Kumar and Microsoft’s Nilendu Pattanaik to explain how TCS transformed the gift card company’s customer engagement and global operati By Tata Consultancy Services Mar 31, 2023 1 min Financial Services Industry Cloud Computing IT Leadership BrandPost How TCS pioneered the ‘borderless workspace’ with Microsoft 365 Microsoft’s modern workplace solution proved a perfect fit for improving productivity and collaboration, while maintaining security of systems and data. By Tata Consultancy Services Mar 31, 2023 1 min Financial Services Industry Microsoft Cloud Computing BrandPost Supply chain decarbonization: The missing link to net zero By improving the quality of global supply chain data, enterprises can better measure their true carbon footprint and make progress toward a net-zero business ecosystem. By Tata Consultancy Services Mar 31, 2023 2 mins Retail Industry Supply Chain Green IT Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe