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Keywords
Data storage, Warehousing, Outsourcing, Model
Abstract
IIntroduces a conceptual model developed to explore outsourcing of data warehouse usage by organizations. Data warehouse business users rely on reporting, ad hoc analysis, and data-mining tools to support both operational and strategic decision making. Organizations have a vested interest in data warehousing; however, many organizations are constrained by the high costs associated with data warehouse development as well as the scarcity of complex skills required to use the data warehouse. One way to lower costs and gain access to scarce human skills is to outsource through the use of an application service provider. This paper presents the results of a theoretical evaluation conducted to explore data warehouse outsourcing of business usage (i.e. reporting, ad hoc analysis, and data mining). Results of this theoretical evaluation are summarized in a conceptual model that will be tested using field studies in future research.
Introduction
The use of application service providers (ASPs) for outsourcing has exploded recently for an array of industries. Durlacher Research has indicated that the ASP market was worth $14 million at the end of 1999 (Robinson, 2000). International Data Corp. (IDC) estimated that the ASP market was worth $770 million in 2000 (Mitchell, 2001) and that the market will grow to $7.7 billion by 2002 (Dewire, 2000) and to $24 billion by 2005 (Schwartz, 2001). Numerous "pureplay" ASPs have emerged to capitalize on this thriving market, such as USInterworking and Corio. In addition, software vendors (e.g. SAP, Oracle, and Ariba), information technology (IT) and infrastructure firms, and management consultancies (e.g. EDS, Qwest, Exodus Communications, and KPMG) have had the vision to develop capabilities to capitalize on the ASP marketplace.
There are many reasons why firms outsource their information systems, some of which include:
to eliminate internal IS support and focus on the core competencies of their business;
to employ specific skills that cannot be readily developed within the client firm; because of dissatisfaction with the internal IS department and the chief information officer; and
to reduce costs, generate cash, and replace capital outlays with periodic payments (Smith et al., 1998).
A data warehouse is a technology that requires organizations to have specific technical and analytical skills to enable development and implementation, which can...