ilta 2005 - evaluating managed services - benchmarks and case studies by dave cunningham - aug 2005
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August 2005 © 2005 Baker Robbins & Company
Evaluating Managed Services - Benchmarks and Case Studies
Presented by:
Dave Cunningham, Baker Robbins & Companydcunningham@brco.com
August 24, 2005
August 2005 © 2005 Baker Robbins & Company
Objectives
Establish a practical definition of managed services
Discuss case studies from the past year, some who decided to use managed services and some who did not
Help you understand how to determine if managed services are appropriate for you and your firm
August 2005 © 2005 Baker Robbins & Company
Today’s Agenda
Background
Market Status
Case Studies– Case Study #1: Small Firm with Big Ambitions– Case Study #2: Big Firm IT with Practice Ambitions – Case Study #3: Litigation Powerhouse– Case Study #4: Business Process Outsourcing– Case Study #5: IT Scorecard
Points to Take Away
August 2005 © 2005 Baker Robbins & Company
Defining IT Managed Services
“Transfer of day-to-day management of one or more IT infrastructure environments or functions to an external service provider.” Butler Group
While outsourcing is seen as all or nothing, “managed services” refers to discrete services or sets of services handled by an external resource
to allow a company to focus on its core competencies.
August 2005 © 2005 Baker Robbins & Company
Defining Managed Services
Managed services involve:– Defined services– Service level agreements– Performance measures (objective and subjective)– Calendar or milestone timeframe (Term)– Legal terms and conditions
August 2005 © 2005 Baker Robbins & Company
Defining Managed Services
APPROACH CONSIDERED
MANAGED SERVICE?
Contract Staffing No
Project-based Consulting or Integration Services
No
Commodity Contract Services No
Term-based Vendor Services - Onsite Yes
Term-based Vendor Services - Offsite Yes
Hosting Generally Yes
August 2005 © 2005 Baker Robbins & Company
Most Common and Growing Services
WAN
Disaster Recovery
Net Hosting
Help Desk
Data Center and IT Operations
Application-Specific Hosting or Recovery
August 2005 © 2005 Baker Robbins & Company
Influences on Firms
Pressure for higher-level service without higher costs
“One firm”, multi-office, international support needs
Technology better suited for centralization, consolidation
More IT involvement in the practices
Litigation storage explosion
Challenge in attracting and retaining specialized IT talent
August 2005 © 2005 Baker Robbins & Company
Gartner Group on the CIO
The New CIO Leader's IS organization must be leaner and more focused on business results by appropriately using strategic sourcing of IT services, by adopting process based working, and by using all the financial resources available to it.
August 2005 © 2005 Baker Robbins & Company
Market Status: Overview Management is more comfortable with internal,
on-site services
IT management can see outsourcing as a threat
Few services are outsourced to save money
Some firms are using service levels and ‘cost of services’ information to deliver services better internally
Market is immature; at a slow turning point– Firms are not experienced in engaging managed
service suppliers
– Suppliers historically provided poorly fit bids
– Vendors are more focused on specialty services
– Wide disparity in vendor services and costs
August 2005 © 2005 Baker Robbins & Company
Market Status: Vendors IT operations, support and/or facilities:
– Intelliteach - Office Tiger / Hildebrandt– LexisNexis - Savvis– Markley Group - SunGard– MindShift (Aspire/Union Square)- Thomson– Network Alternatives
Niche players– Lex Solution, Steelpoint, Ringtail, CaseCentral, etc.– NetDocuments, Hubbard One, MessageOne
Business Process Outsourcing: – Williams Lea (Bowne), Perot Systems, IBM, Deloitte
August 2005 © 2005 Baker Robbins & Company
Example Performance Indicators
Service Levels (objective)
System availability: 99.97+%
Help desk: 20 second response for phone calls; 85% first call resolution
Guaranteed problem resolution times (e.g., 2 hours for Severity 1 systems)
24x7x365 operations (optional off-site, centralized operations)
August 2005 © 2005 Baker Robbins & Company
Example Performance Indicators
Key Performance Indicators (subjective)
User survey results
Management satisfaction
Adaptability
Collaboration with internal staff or other suppliers
Quality of information exchange
Service improvement programs
August 2005 © 2005 Baker Robbins & Company
Instigators of Managed Services
Managed services are usually not considered in a static environment.
Positive Influencers Negative Influencers
- Management changes
- IT strategic planning
- IT project planning
- Merger considerations
- Office or data center move
- Disaster preparedness planning
- Firm management dissatisfaction
- IT failure
- Concern over IT costs
August 2005 © 2005 Baker Robbins & Company
Case Studies
August 2005 © 2005 Baker Robbins & Company
Case Study One: Smaller Firm, Bigger Ambitions
Profiles– Firms 50-250 lawyers– 2-8 offices
Objectives– Large firm IT capabilities– Growth on tap– Consistency across offices– Make up for lack of IT availability
August 2005 © 2005 Baker Robbins & Company
Services– IT operations, upgrades and fault tolerance– Includes hosting of accounting and telephone– Help desk (except desk-side support) – IT staff development
Issues– Limited number of capable vendors– Separate help desk– Vendor personalities were important– Firm’s role in transition
Case Study One: Smaller Firm, Bigger Ambitions
August 2005 © 2005 Baker Robbins & Company
Case Study One: Smaller Firm, Bigger Ambitions
Service Features Before After
Help Desk Ad-Hoc Immediate
Third Level Support None Immediate
Upgraded, consistent systems Ad-Hoc Yes
Centralized, professional facilities
None Yes
Fault Tolerance Little Considerable
Approximate Costs $2200 / user $4000 / user
August 2005 © 2005 Baker Robbins & Company
Case Study One: Smaller Firm, Bigger Ambitions
Benefits– Less time to ramp up to improved levels– Lack of firm management distraction– IT better supported and focused– Service levels incomparable to previous situation
Drawbacks– Costs were almost doubled
August 2005 © 2005 Baker Robbins & Company
Case Study Two: Big Firm, Practice Ambitions
Profiles– 400-2400 attorneys– IT is mature
Objectives:– IT aims to be closer to the practices– Firm seeks operational efficiency– Consolidate and perhaps centralize operations– Ambivalence for operations responsibility
(best performance and value for the least distraction)
August 2005 © 2005 Baker Robbins & Company
Case Study Two: Big Firm, Practice Ambitions
Services– Facilities and WAN– Facilities and Operations Management– Monitoring and Fault Tolerance– Third Level Support– Possible Systems and Content Management
Issues– Centralization drawbacks– Leadership buy-in to off-site facilities– Systems management associated with big vendors
August 2005 © 2005 Baker Robbins & Company
Case Study Two: Big Firm, Practice Ambitions
Value– Costs comparable for NY-based internal data center
and professional third party data center– Vendor costs at higher service levels are a premium
over internal costs for lower service levels– Vendors are pushing to lower costs 30%
August 2005 © 2005 Baker Robbins & Company
Case Study Three: Litigation Powerhouse
Profiles– Large or specialty firms with significant litigation
support storage needs
Survey of Leading Litigation Firms– 6-7 TBs of data internally, growing at 60% per year– Already managed centrally– No service levels defined– Do have failover plans– Use co-location facility for disaster recovery;
vendors hosting 5-6 TBs of data
August 2005 © 2005 Baker Robbins & Company
Case Study Three: Litigation Powerhouse
Objectives– Handle massive storage growth– Address security and availability requirements– Need multi-office access to litigation cases
Services– Storage, backup and mirroring– Fault tolerant facilities; monitoring and capacity
management– Possible data loading and processing
August 2005 © 2005 Baker Robbins & Company
Case Study Three: Litigation Powerhouse
Issues- Costs and chargeback - Local printing
- Sensitivity to off-site data - Proprietary vendor software
- IT infrastructure availability - Costs for productions
Service Capabilities Lit Vendor Co-Location
Data Processing $7.2M n/a
Data Loading $63M $20K
Hosting $500K/mo $50-100K/mo
Comparison of recent bid for 18 terabytes of litigation data:
August 2005 © 2005 Baker Robbins & Company
Case Study Four: Business Process Outsourcing
Profiles– Focus on larger firms for now:
(top 100 in US and top 10 in UK)
Objectives– Reduce costs and increase efficiencies in firm
processes across departments– Manage service levels rather than people
August 2005 © 2005 Baker Robbins & Company
Case Study Four: Business Process Outsourcing
Services– Incoming Correspondence Management– Electronic Content Management– Document Production– HR and Accounting Management
Potential Value– Transaction costs and time reduced through vendor’s
high capacity environment– Can distinguish between commodity and value-added
business processes
August 2005 © 2005 Baker Robbins & Company
Case Study Four: Business Process Outsourcing
Issues– Internal
• Changes to departments may not be subtle
• Existing processes may be un-managed, dissimilar or poor practices
• Cost- rather than benefit-based decisions
– Vendors • Big corporate vendors have little flexibility across lawyers and
practices
• Managing information requires understanding and adaptability of business processes
August 2005 © 2005 Baker Robbins & Company
Case Study Five: IT Internal Scorecard
Profiles– Primarily medium and large firms preparing to plan– Merger situations– New law firm management
Objectives– Understand how scope and levels of service compare– Gauge or justify costs– Identify gaps in IT processes– Provide benchmark for managed services
August 2005 © 2005 Baker Robbins & Company
August 2005 © 2005 Baker Robbins & Company
August 2005 © 2005 Baker Robbins & Company
Case Study Five: IT Internal Scorecard
Services– Joint effort to evaluate IT processes, service levels and
costs and levels of risk– Benchmarked against managed service providers and
other firms
Issues– Lack of internal performance data requires
extrapolation– Many firm IT processes offer a poor benchmark
August 2005 © 2005 Baker Robbins & Company
Points to Take Away
August 2005 © 2005 Baker Robbins & Company
Your Role
Managed Service Preparedness– Determine how IT best adds value– Consider your own role - better to be stretched thin,
build internal expertise or manage a portfolio of staff and vendors?
Be careful about getting to the point where firm management is driving the push
August 2005 © 2005 Baker Robbins & Company
Sourcing Strategy
Firms should know their own services, service levels, costs and risks even if not considering managed services
Smart to include build vs. buy decisions into IT and project planning
Firm should drive the service level expectations with vendors
August 2005 © 2005 Baker Robbins & Company
Discussion and Questions
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