Computing on tap - or money down the drain?
Smaller firms seeking cost-effective IT solutions should look at utility computing - buying into externally hosted capacity
Utility, Grid, On Demand, Hosted, SaaS or “On tap” IT services, as they are known, are fast becoming accepted by users as a flexible, cost-effective way to meet emerging challenges – not to mention the best way for sole practitioners and smaller law firms to have access to large scale software and to compete with the larger, more resourced lawyers.
While many small and mid-size firms rely on internal IT services, others seek real-time infrastructure and IT utility services to optimise their infrastructure strategies and seek competitive advantage.
Unlike traditional outsourcing, hosted computing provides both hardware and software in an on-demand format to be delivered and paid for on a user-by-user basis, thus eliminating wasted, but paid for, resource. Like a utility, you genuinely do only pay for what you use.
Who needs it and why?
Law firms evaluating utility computing must review their internal technology support costs, assess which IT functions are organisational core competencies, where IT staff bring value to the business and which remaining services can be best served by a commodity platform.
In short, they must ask themselves “Can I better spend my time, money and IT resources on my core business?” Or, “How can we make our firm commercially profitable and competitive so that we can concentrate on our professional work?”
Cost savings and flexibility
Among the main drivers of moving to utility computing is that of the cost of computing. In a challenging economic climate, where the majority of day-to-day costs are constantly rising, IT costs are fixed, shared and low.
Utility computing allows for hardware resources to be shared at secure data centres, thus eliminating high server costs and maintenance costs. Because the number of users is paid for in an “on demand” format, the user costs can be accurately calculated to take into account the peaks and troughs your law firm often encounters.
Historically you would have had to buy a maximum user licence that would only be fully utilised on the rare occasions you hit your usage peaks. For the rest of the time you were potentially paying for wasted capacity.
This is a massive cost saving on its own, without even taking into account upgrading hardware prices, software support prices and insurance bills (utility computing actually allows you to reduce your insurance bills because it takes away the cost of insuring your server against theft).
Another financial benefit is that, by effectively hiring IT, there are no detrimental effects on credit lines and cash flow. As hire charges are 100% tax deductible from corporation tax, this represents a saving too.
Another driver is the need for you to operate globally and around the clock. With on demand computing your firm simply requires access to the internet. The computing aspect is handled in the UK.
This provides tremendous flexibility for your firm. You can not only add and subtract users as you need, but now locations too. Thanks to the internet, access is 24 hours, seven days a week all year round and response times are remarkable.
Focusing your efforts on delivering professional legal services to your clients and not on managing IT enables you to redeploy staff to more beneficial positions. Peace of mind is achieved by the IT supplier monitoring and supporting your business, domestic or global, around the clock.
Rapid implementation is often identified as one of the key benefits of hosted/on demand computing. Although it is the software package that delivers the long-term return on investment, time and money spent on implementing it in the traditional method often send the return on investment (ROI) hurtling to somewhere in the future.
With utility computing, law firms have found the implementation of the software is rapidly reduced. They go live earlier, users often see no change in working practices and, therefore, require little or no supplementary education – all allowing the ROI to be gained more quickly.
With an increase in user satisfaction because of the faster response times, the easy access to the remote system and the constant availability of information for management, it’s no wonder this is one bandwagon people are queuing up to jump on. But what about the myths and legends you sometimes hear about?
The top five myths of utility computing
Utility/hosted computing has captured significant market share away from more traditional on-premise software solutions over the last 18 months. As with any disruptive innovation, separating the reality from the mythical can be a challenge for any prospective customer trying to evaluate options accurately and make an informed decision.
Here are the top five myths companies hear in relation to utility computing, and an explanation to help you decide if this really is something you need to consider.
Myth 1: If the internet is down, my firm can’t practise!
Any site suffering from internet connection problems can use a variety of other connectivity methods depending on their relevance, in order to continue to work. For example some firms may opt to use mobile or wireless broadband, ADSL or SDLA or even leased lines. For the majority, the ideal way would be to use a wireless or mobile device. The beauty of the hosted solutions is that you can access your systems from anywhere at any time, making disaster recovery simple and enabling your firm to practise even under the most trying of circumstances.
Myth 2: On demand/hosted solutions have only basic functionality
True hosted computing is not a “lite” version of a real software solution. Instead it is real life, real time, full application computing. On demand/hosted is merely a form of delivering your IT software to you, the same as if you managed it from your own premises. There should be no discrepancy in application, availability or utilisation. True on demand/hosted computing is any time, anywhere, anyone.
Myth 3: My data is more secure if
I have the software in-house
Ask the IT department to show you the backup of your key business applications. If they can do this within half an hour or from within the office, it’s not secure! Regardless of a fireproof safe or a tape sat in an offsite location, the chances are that, if disaster struck your firm, these precautions would be as much use as a chocolate fireguard.
On demand systems are hosted in secure, approved, accredited data centres whose sole business is to secure and run your applications to the exclusion of all else.
Myth 4: On demand/hosted solutions can be implemented overnight – “Plug in a lawyer and away he goes!”
Whilst this myth is probably one of the most prevalent in the industry,
it can occasionally be true. Many people have confused the “instant on” nature of utility computing software with the implementation of a successful hosted initiative.
The truth is that the software represents only one element of any initiative. The reality of implementing any significant organisational change requires a combination of people, process and technology. Vendors and clients work together to produce an implementation plan. The more preparation in the plan, the more successful the transition.
Myth 5: On demand/hosted solutions are more expensive than on-premise solutions in the long term
This is not so. On demand/ hosted solutions offer huge financial savings in terms of hardware, software and personnel. They enable you to fix a budget and stick to it, despite the undulating nature of your business.
What do I look for in a supplier?
Questions you need to address include how well the provider knows your business and understands your needs; whether they have a track record in the legal as well as other sectors; are their service offerings competitive; how they will adapt to your firm’s future needs; and what their vision is of the future of law firms.
Whoever you choose, you should be looking to achieve as cost savings:
- reduced infrastructure and personnel costs;
- effective management of IT spend and improved cash flow;
- reduced insurance and maintenance costs;
- and 100% tax deductibility from corporation tax.
- Operational benefits should include:
- flexibility of use in line with business demand;
- optimal communication through all staff being on one system;
- and management of your IT by external experts, allowing you to focus on your core business.
- Catherine Bailey is Head of Marketing, Iris Legal Solutions
t: 01786 833162