Is your IT budget leaking?

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Posted by Arlene Adams, CEO of Legal Futures Associate Peppermint Technology

Your IT budget in pictorial form

I recently met the managing partner of a large law firm who was frustrated by the lack of return he was getting from his current investment in IT. He described it as a leaking bath: “The tap keeps running but the water level stays the same.”

He explained the technology supporting his business had reached a point where it was very complex and costly to make a simple change because of the consequential impact across his IT stack.

The problem he described is common and stems from the way IT has developed over the years. There has been a massive increase in technology adoption as firms strive to realise the benefits IT can deliver.

While many applications deliver significant value in their own right, the art of getting them to work in harmony is complex, time consuming and expensive. When one IT supplier changes something, it will most likely have an impact on the rest of the IT stack. The result is firms are reaching a point of complexity where a disproportionate amount of their investment is spent on simply ensuring the IT stack continues to work together.

The pace of technology advancement is only heading in one direction so this problem will only get bigger. The impact of the Internet, BYOD (bring your own device), big data and social media will mean firms increase the amount of technology they consume and the pace of its consumption.

While this represents a great opportunity for firms to use technology for competitive advantage, it also comes with a risk. The danger is that the complexity grows to the point where it becomes so difficult, costly and timely to change, it is counterproductive. In a highly competitive market where change is all around us, and critical to survival, this will hit the bottom line of any firm hard.

The problem isn’t unique to law firms, so the good news is the technology giants, such as Microsoft, Oracle, Salesforce.com and IBM, are investing hard to address this very challenge. The solution to the problem can be found in the emergence of the Platform approach.

This is where firms buy into a base technology stack that delivers the most common technology components a company requires. The benefit is that many of these components – such as Microsoft Office, database, security, workflow, social media, browser support, device support and so on – are all taken care of by a major global vendor.

The operation and cost of keeping this all in sync is down to them. They invest thousands of engineers and hundreds of millions of pounds to make it happen. At a more advance level this can also include business applications such as CRM, reporting and document management. The Platform approach can free up a firm’s time and budget to focus on legal functionality and value, not just spending time and money to stand still.

In the legal market, firms depend on Microsoft products. I often hear the phrase that fee-earners and staff of a law firm live in Microsoft Outlook. That’s why, when firms come to buy new practice and case management software, the integration to Microsoft is a key battleground. In recent years Microsoft launched its Dynamics CRM Platform, one example of the Platform approach. Microsoft Office and many other Microsoft products work natively in this Platform. This removes the need of firms to worry about the integration of core Microsoft products.

The Legal IT Landscape Report found “compatibility with existing applications was overwhelmingly the biggest challenge”, so the Platform approach has the potential to remove one of the biggest IT headaches faced by law firms.

The arrival of the Platform approach, and companies like Peppermint Technology who have built legal applications on top of the Microsoft Dynamics CRM Platform, allows law firms to plug the IT investment leak. Firms have the opportunity to invest in a technology Platform that can advance a firm’s competitive advantage as opposed to spending their money to tread water.