Outsourced ERP Systems

Application service providers are also offering applications that can be integrated with an existing ERP system. This is a partially outsourced model and reduces the business s dependency on the ASP. It can also provide some additional flexibility since it allows the firm to choose a mix of applications that fit their business. Finally, this partial outsourcing allows firms to keep 

Another reason for the increase in outsourced ERP is saturation of the market. Most large firms already have some form of enterprise system, so the next target is small to medium sized enterprises (SMEs). This has already occurred to a large extent in Europe where there was over 4B in sales of enterprise 

In the past, SMEs could not consider purchasing ERP software due to the huge cost. Some vendors offer limited implementation methods that have a lower cost but only limited functionality (e.g. SAP Business One, designed for companies of less than 250 employees). Using ASPs, can be a lower priced alternative to achieve the functionality that the SME needs. Other reasons for SMEs outsourcing ERP functions through ASPs is pressure from large suppliers or customers in order to tie into their systems. 

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