For many companies, it's worth the cost. A similar system exists at eBenefits. But with all the high-tech safeguards, common sense says that nothing is ever completely secure. It takes another leap to settle on a provider. ASPs are new, and there will probably be shakeouts over the next few years, says Donovan.
Some entrepreneurs have another reservation.
ASP boosters would argue that Stieber has it backwards, that using the Web reduces administrative chores, freeing up time to focus on workers' needs. Even pricier are traditional HR applications, which have only begun to move online and offer limitless customization. Interpath Communications Inc. provides Web hosting for SAP's popular HR application. Interpath execs claim the service is proving popular with Internet startups. Integrated systems are probably the wave of the future, says Scholl at Dataquest.