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Xenakis on Technology: Are Accounting ASPs your Friend or Foe?

Here's what we found when we looked at three accounting applications service providers.

If you need new accounting or financial software, an ASP (application service provider) can be an easy and inexpensive option.

Instead of purchasing accounting software and computer equipment and bringing them in house, you outsource the entire project to an ASP via the Internet.

For this report, I checked out Intacct from Intacct Corp.(www.intacct.com), NetLedger from NetLedger Inc. (www.netledger.com), and Great Plains Accounting from the ASP ManagedOpts.com. Intacct and NetLedger are Internet-only accounting systems, while Great Plains is also available for traditional on-site licensing from Great Plains Software Inc. (www.greatplains.com). Other Internet-only accounting systems that you can check out for yourself are ePeachtree (www.epeachtree.com) and eLedger (www.eledger.com).

Internet-only systems like Intacct and NetLedger are easy to sign up for. You just go to a Web site, and sign up. For either service, you can play around with a demo account for a few weeks, in order to familiarize yourself with how the system works and decide whether it will work for you.

There are some concerns with ASPs. For example, if your accounting data is on someone else’s computer, can you easily get to it? Can your competitors hack into the ASP’s computer and see your data?

Even worse, what happens if your ASP goes under, as so many dot-com companies have been doing recently? If the ASP goes out of business, will you lose your accounting system? Will you lose the rest of your business, too? At the very least, you should have a plan in place to recover your data quickly from the ASP, if it goes under.

The risk of an ASP going belly up is certainly a concern to Richard Brenner, a business consultant in Cupertino, Calif., who evaluated the Internet-only accounting system from Intacct. He wanted to use it for his own business, replacing Intuit Inc.’s QuickBooks (www.quickbooks.com), which had served as his accounting software for ten years, and also to recommend it to some of his business clients who need a new accounting system.

But Brenner is also concerned about security.

“One of the biggest fears that we have and our customers have is that the system is not secure,” says Brenner, CEO of the Brenner Group (www.brennergroup.com).

Brenner checked out Intacct’s computer systems and found that although all customer data is stored in the same large Oracle database, the company is using Oracle’s standard security features, with the result that Brenner believes that each customer’s data is fully secure. He also checked out the firewalls and other features of Intacct’s configuration. “I talked to all my customers about it, and they came away reassured,” he says.

Indeed, Richard Stiennon, research analyst at Stamford, Conn., based Gartner Group, agrees that Intacct checks out for now, but indicates that every ASP must be given a thorough technical security check, and these checks must be repeated frequently during the life of the contract.

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