This combines skills in applications management, implementation and service. For all the excitement about application rental, there are downsides. There needs to be a full range of services to cater for different types of users, says PeopleSoft's McGill. Oracle, IBM and BT offer standard services for a monthly fee. SAP customers buy the licence and the hardware, so customised applications can be supported, but the hardware resides at a datacentre where support can be provided.
Costs vary according to the package, the number of functions and the number and type of users.
A comparison with in-house costs is hard because few firms know the cost of ownership of their ERP systems. There are also issues of security and performance. Ian Elliott, business director at ICL operational services division, says the host may implement better security and it will offer backup and disaster recovery services as part of the contract. Many technical issues can be addressed within service level agreements, but clients need to know what they want and build it into the contract so they have something to measure service against. Ultimately, KPMG's Nixon and ICL's Elliot believe the problems are psychological rather than technical and that confidence is the real issue.