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 Sponsored by SAP What goes well with Viña Concha y Toro wines? Meat, fish, poultry, and SAP Viña Concha y Toro, a wine producer that distributes to more than 140 countries worldwide, paired its operation with the SAP Business Technology Platform to enhance its operation and product. By Tom Caldecott, SAP Contributor Dec 04, 2023 4 mins Digital Transformation brandpost Sponsored by Azul How to maximize ROI by choosing the right Java partner for your organization Choosing the right Java provider is a critical decision that can have a significant impact on your organization’s success. By asking the right questions and considering the total cost of ownership, you can ensure that you choose the best Java p By Scott Sellers Dec 04, 2023 5 mins Application Management brandpost Sponsored by DataStax Ask yourself: How can genAI put your content to work? Generative AI applications can readily be built against the documents, emails, meeting transcripts, and other content that knowledge workers produce as a matter of course. By Bryan Kirschner Dec 04, 2023 5 mins Machine Learning Artificial Intelligence feature The CIO’s new role: Orchestrator-in-chief CIOs have unique insight into everything that happens in a company. Some are using that insight to take on a more strategic role. By Minda Zetlin Dec 04, 2023 12 mins CIO C-Suite Business IT Alignment 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