Tech Knowledge is a start-up founded in 1997 by Robert Thyer. The company is a distributer of presentation technologies, including computer based projection systems, video equipment, and display technologies. The firm has 25 employees and does $5 million in sales. It is growing rapidly. The owner, Robert Thyer, would like to netsource the back-office functions of the firm because the company does not have an internal IT capability. The applications to be netsourced would include sales and distribution, financial accounting, and inventory management.
TechKnowledge would like to source SAP or another ERP vendor via a hosting arrangement. It does not expect to do much customization, and it does not have any legacy systems.
1. What factors should it use to evaluate each of these potential hosts?
2. What controls should be in place to monitor the hosting arrangement?