Evaluating application service provisioning using system dynamics methodology

Despite the hype surrounding the value-added potential of e-business for contemporary firms, the recent technology downturn was marked by poor customer satisfaction from investment in e-business initiatives. An apparent mismatch between customer expectations and vendor offerings suggested a lack of appropriate methods and techniques for evaluating e-business. This article draws from a longitudinal research study on the deployment, hosting and integration of application service provisioning (ASP), an e-business model targeted mainly at small and medium-sized businesses (SMBs). Using system dynamics as a methodology that addresses the inherent complexity of the ASP model, the article demonstrates how a series of complex interrelationships between key performance indicators (KPIs) will impact the business value for customers from ASP vendor products and services. The lessons from this research will be particularly relevant for existing and future ASP vendors and customers.