Industry analysis from Pulsant: Brighter futures

This article was originally featured as an industry analysis piece in the June 2017 LPM Outsource and prosper supplement. To read the issue in full, download the supplement.

It wasn’t too long ago that IT outsourcing was viewed with a heavy dose of scepticism – and perhaps rightly so. But after spending years perfecting its offering and overcoming some pretty bad press, it has proved to be a valuable service – bringing numerous benefits to SME businesses, such as greater flexibility, access to new technologies and improving productivity.

Indeed, there are many drivers for outsourcing IT functions – but perhaps the key one is cost savings. Looking at hosting as an example, firms wouldn’t need to buy, maintain and manage servers onsite if they outsourced this to a cloud or managed hosting provider. And with no initial investment in hardware, firms could pay for cloud services from their operating budget.

That isn’t to say, however, that outsourcing is without challenges – particularly in highly regulated industries such as the legal sector. Security has historically been a major barrier to outsourcing, particularly when it comes to cloud adoption or managed hosting. But those barriers are largely a thing of the past. Today, outsourcing IT can actually help SME legal practices to manage their security and compliance needs – and ultimately help them attain competitive advantage over larger rivals, which they previously couldn’t have hoped to achieve.

While cost is a key driver to outsourcing IT, it isn’t the only one. A lack of skills, compliance issues, and even security are making cloud adoption a more attractive option. Firms, just like businesses in other sectors, operate in a highly competitive market – but SME firms have tight budgets and, like all other firms, are expected to make provision for IT security and compliance. But technology should enable firms rather than hold them back – and by having their IT managed, they can reap the full benefits of the latest information security technology and a team of cybersecurity experts that will spend their days making a firm’s infrastructure more secure.

Cloud providers also typically invest more money, resources and expertise in security than SME legal businesses could. They also have the right riskmanagement frameworks in place and accreditations such as ISO27001, CSA Star for cloud security and Cyber Essentials.

Indeed, IT providers have a level of skill in-house that SME firms couldn’t necessarily afford – but the benefits of that don’t end at cybersecurity. If firms outsource their IT they could benefit from round-theclock software maintenance – giving firms access to a state-of-the-art infrastructure at a fraction of what it would cost them to bring that facility in-house.

And part of creating a state-of-the-art infrastructure is giving SME firms access to technology they might otherwise have never used.

According to our recent report, published in association with LPM, 32% of firms surveyed were able to choose systems or services they otherwise couldn’t have by moving over to cloud or managed IT services.

But perhaps the most important benefit of outsourced IT is that it empowers firms to concentrate on what they’re best at. Firms that don’t need to worry about IT, because it’s in the hands of capable experts, can spend more time developing their business strategy and ensuring that they provide the best possible service to clients.

And the cloud isn’t as set in stone as it once was. The cloud has evolved rapidly and adoption is at an all-time high – with hybrid models fast becoming the norm. This rise has happened partly because firms are coming around to the idea that the cloud can make them more agile – allowing them to scale up their provision when needed and enabling fee earners to work remotely, easily.

Firms can also choose between different cloud models, including private, public or hybrid. Hybrid is ideal for legal businesses because it provides the best of both worlds – allowing them to decide what should be hosted, and where, to meet compliance and cost requirements.

Hybrid cloud also offers organisations certain assurances when it comes to security. Cloud service providers, be they the large public cloud operators or mid-market providers and datacentre operators, have the expertise and technology to make sure data is protected both physically, via 24/7 security and access control, and virtually, through encryption, resilience and availability. Firms can therefore leverage those greater levels of security.

The same applies to skillsets. Most law firms employ IT generalists responsible for maintaining all aspects of IT infrastructure, including hosted solutions that are in-house. They don’t have the expertise to advise on cloud migration, integration, management or security.

As a result, limited resources, and not having the relevant skills, could lead to significant gaps in security and an inability to keep the technology fully up to date. According to a Rightscale report, lack of skills replaced security as the top concern among businesses in 2016.

Firms also don’t have the time or resources to stay on top of industry changes, innovations and new technologies. But this is exactly what service providers do – because it’s their business. It is their job to keep firms’ data or applications safe and make sure they are always available.

There is little doubt that outsourcing can bring tremendous value to business. When it comes to a technology like cloud, outsourcing hosting to a third-party provider makes sense. Providers have the skills, resources and infrastructure to deliver on your requirements and can help you to use technology as an enabler

And the cloud isn’t as set in stone as it once was. The cloud has evolved rapidly and adoption is at an all-time high – with hybrid models fast becoming the norm. This rise has happened partly because firms are coming around to the idea that the cloud can make them more agile – allowing them to scale up their provision when needed and enabling fee earners to work remotely, easily.

 

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