The Application Service Providers bite back

Application service provision could be the answer to many managing partners’ prayers. The delivery of application software as a packaged service through the internet or a private network, on a rental or subscription basis, could signal an end to escalating IT overheads, the daily travails of system maintenance and the battle to keep pace with fast-moving technology. Not to mention the increasing pressures to safeguard security and continuity of service for a demanding market. Chris Cann, systems partner at Martin Kaye, identifies why his firm is already reaping the considerable benefits of a new delivery route for critical business applications.

Martin Kaye is an established law firm with over 70 staff, based in Telford, Shropshire. As such it is typical of many similar-sized regional firms who are facing the challenges of competing more effectively in an increasingly pressurised market. It has always had a mix of specialist disciplines but in the last 18 months or so, has engineered a move away from commercial law into the high growth areas of injury claims and property law.

This has been made largely possible by the ‘slip and trip’ marketing business, and the US style claim culture. In this area margins are low and consequently volume needs to be high. It is perhaps best described as legal work as a business, with all the commerciality. In fact, it is doing for legal work what Henry Ford did for the motor trade. This is all very well, but at the time we did have a major obstacle to overcome; namely that our internal systems had to be able to cope. When it comes to processing claims, the onus is very much on efficiency, productivity and accuracy. As things stood, we risked compromising the whole operation.

The firm faced this dilemma despite having invested time and money over the years in developing and improving its IT. By the middle of 2000, with nearly sixty staff running a range of applications, the IT systems were, quite simply, beginning to feel the strain. Microsoft Exchange server, Internet Explorer, the MS Office suite including Outlook email and Axxia’s practice management software, were all being delivered to outdated and increasingly cluttered desktops. There was a real mix of PC specifications out there and a lot of users were just not getting the performance they required. The inherent obsolescence of computers had caught up with us.

The situation has exacerbated the desire to introduce an extranet service to our conveyancing clients and an anticipated high growth rate in terms of fee-earning and support staff. It was becoming clear to me at this stage that the practice faced some serious decisions.

We were facing the classic expansion conundrum. We’d won a substantial tranche of new business and had plans to double the staff over the next year, but I knew our technical infrastructure would require a massive upgrade to keep up. I moved to draw up plans on the current client server model, but there were two immediate stumbling blocks – the huge cost and the on-going resources needed to manage such a sprawling network... all this just to manage a basketful of applications.

It was then that we were introduced to an application service provider (ASP), hub, who demonstrated an understanding of the professional services market in general, and the legal sector in particular. They proposed taking over full responsibility for everything, including hardware, software, communications, maintenance, support, implementation and training. In effect delivering a fully managed environment, including desktops, network, data centre and a range of added-value services. Rather than an internet-based service, the provider runs its ASP offering via a secure, highly resilient private network utilising leased lines and two Unisys e-@action ES7000 Enterprise class servers housed in separate buildings. This was quite enough to give us initial reassurance about security and reliability. At a stroke, all the IT issues and headaches could be passed over to the provider, while our users enjoyed an unbroken flow of data and applications straight to the desktop.

For the practice, the guaranteed uptime of 99.5 per cent and the consistently fast operating speeds, even over the oldest 486 machine was enough of a lure to give serious consideration to the ASP option. One of the key deciding factors for the firm was cost.

I was vaguely aware of total cost of ownership figures on traditional PC networks, but had chronically underestimated them, as most people do. Industry research estimates that for every £1,000 spent on hardware, a further £9,000 is spent on IT overheads, maintenance, training, upgrades and licenses. ASP services are offered on a rental or subscription basis, and they price the whole solution (including all infrastructure and Microsoft and Axxia applications) from £200 per user per month. In essence, it represented potential savings of up to 50 per cent on typical internal networks. So, we were looking at the combination of lower costs and fixed monthly costs, plus the real bonus of no capital outlay whatsoever.

The hard work paid off as the go-live date came and went without incident. Overnight our network was transformed, and I ceased to be a very expensive system administrator! A 512k lease line brought in all our applications, with our old PCs running as dumb terminals, and performance on low-spec PCs suddenly became comparable to that of a Pentium III. I didn’t need to worry about anything at our end, as I saw our operation being in the safe hands of a team of expert technicians that we couldn’t ever hope to have at our beck and call under normal circumstances. In fact, this level of reliability is unheard of in normal businesses.

As far as cost-effectiveness and IT performance were concerned, we experienced immediate benefits.

The issue of security with any new operation was obviously another key factor. As we were passing control over to an outside organisation, we did have early concerns about security issues – and quite understandably so. But, when we saw just what the service included in terms of audited daily backups, free disaster recovery and sophisticated virus protection and firewalls, and had inspected the physical premises and IT infrastructure, we quickly realised that our IT capability and data was a great deal safer than with Martin Kaye. Of course we had taken normal precautions vis-a-vis security but this was of a different magnitude. We suddenly appreciated that the secure handling and processing of data is what the hub is all about.

I guess a good analogy for data would be money. You entrust money to a specialist organisation that has all the procedures and equipment to manage it safely – you don’t keep it under the mattress. Once you get over the comfort factor of having to physically hold something for it to feel safe, the logic of ASP security and reliability is clear. And at a time when law firms are under increasing pressure to manage risk better, we’re safe in the knowledge that we have adopted a far superior route forward in this respect.

We have been on the hub for almost a year, and for the firm it has been a year of continuous benefits:

* We were able to expand as planned and capitalise on the upswing in our PI business.

* We have employed about fifteen new staff during the period, and all I have to do is pick-up the phone and a terminal appears ready for them to use.

* Our extranet is in development.

* I am able to concentrate on the important part of my job - improving the way we work.

* We have saved about two-thirds of my time and half that of my office manager, and gained a highly reliable, fast, secure and cost-effective IT infrastructure.

The practice is now equipping an additional office a few miles away from its main premises to cope with the growth, and it is no more complex than adding some users down a corridor in the same building. We don’t have to worry about LANs and WANs, routers and the like, because the hub takes care of all that. Of course there is a cost to all this, but it is a totally planned expense. I know exactly from month-to-month what I will be spending on IT, and it is certainly less than what I would have spent in house.

The biggest benefit for me is peace of mind. My colleagues are keen for growth in the ‘bulk supply markets’, but they don’t really appreciate the problems and costs of providing the guaranteed uptime required of the new service levels negotiated with the bulk suppliers of work.

We are all taking maximum advantage of the latest applications (both front and back office) delivered to us at very fast speeds that would have been unthinkable just a few short months ago. The users have very short memories, but I can still vividly remember the stress of trying to keep the creaking network going, and the sort of downtime that would now be unacceptable.

And last but not least, I haven’t needed to employ a single IT person to keep it all going!

Chris Cann is the systems partner at Martin Kaye and can be contacted at chriscann@martinkaye.co.uk, or 01952 291757.

ASP in a nutshell

An Application Service Provider (ASP) is a company that utilises advanced communications technology to give access to business applications and services that would traditionally be held on a company’s own computers. By taking full responsibility for all aspects of the IT infrastructure and day-to-day IT tasks such as processing, storage and security, ASPs allow their customers to focus on their core areas of expertise. ASP services are delivered on a rental or subscription basis, so helping to reduce total cost of ownership, eliminate up-front capital investment and facilitate predictable IT budgeting with one fixed monthly cost.