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An Outsourcing Story – Why (and How) Law Firms Outsource Their IT Operations. Part Five of Five

January 18, 2013

Part Five – Benefits Realisation

Now the transition to the outsourcing partner has been is undertaken and the service is established (as described in part four).

This post completes the series by summarising the benefits that will now be realised.

The Benefits

Of course the real benefits are that the issues outlined in the first post have been addressed and the opportunities that previously had been unattainable are now there to be grasped – in short, a well managed and robust production service and the capacity to push forward IT initiatives supporting the goals of the firm.

A word on costs. It should always be possible to procure an outsourced service at a cost that is no greater than the equivalent in-house offering. This should be a fundamental principle of the outsourcing exercise, stated clearly in the ITT/RFP and maintained throughout the process of selection, contracting and transition.

A summary of the achievable benefits:

  • A robust infrastructure – to deliver against the required SLAs, any shortcomings in the resilience of infrastructure components and the overall architecture must be addressed in the ITT and the transition.
  • Availability and performance – the two key measurements in the SLA. The combination of upgraded infrastructure, availability of all required skills, established technology and service management processes backed up by contractual SLAs all serve to guarantee a service that is required by the firm.
  • Known costs – while the costs may not be less than previously, there is a benefit in knowing that the cost base is guaranteed.
  • Access to skills – no longer is it a concern that technical skills may not be available. This is one of the key benefits of outsourcing – individual law firms cannot afford to keep in house skills in niche areas that may only be required occasionally, any outsourcer needs to demonstrate their end to end technical capability.
  • Scalability – new projects may need additional resource and infrastructure capacity, often at short notice and sometimes for a relatively short period. The outsourcing deal should establish the access to this capacity and the associated costs.
  • No key man dependency
  • Extended hours – it is often impractical to offer 7*24 support through an in-house service.  Most outsourcing partners will offer this as standard as it is already an established facility within their operation. An increasingly valuable benefit as lawyers more and more work around the clock and across time zones.
  • Reduced business risk – IT is growing in significance for all law firms. Having a professionally managed service underpinned by contractual SLAs reduces the risk associated with IT operations.

 Realising these benefits

The key elements in realising benefits are already done. Identifying what you want to achieve up front, reflecting this in the ITT and the selection of your partner, contracting clearly and ensuring that service reporting and auditability are established through transition are essential to getting the best from your outsourcing partner.

Once the service is operational however, it is important to remember what I said at the outset – the outsourced arrangement and the day to day activities of your partner are an extension of your IT. You haven’t given away this responsibility you have simply chosen to do it in a different, more effective way. Key elements of managing the outsourcing arrangements:

  1. Regular and open communication.
  2. Service reporting as established in the ITT and contract backed up by regular service review meetings.
  3. Audit the operation of your partner – this is not an ‘us and them’ activity but just something that will benefit both parties.
  4. Annual contractual review – again just go over what is, and what is not working and consider whether the contract or its operation needs to be refined.

Summary

The end of the journey.  It started by seeing how IT is growing in importance with some real business opportunities for law firms right now. From there we recognised that some firms, for a number of reasons, just don’t have the capability to grasp these opportunities as their internal IT teams are ‘maxed out’ on fighting internal issues. Outsourcing then becomes an attractive tool to both address issues and enable opportunities to be seized. Selecting the partner through a thorough process that probes deeply their capabilities (recognising some players in the mid-market don’t yet have all of the skills and expertise required) and then transitions through a structured and disciplined implementation project to get to where you want to be. Finally active management of your ‘extended IT capability’ ensures on-going realisation of benefits.

As always, let me know what you think.

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