Outside edge: make software work for your own processes

By putting technology higher on the agenda, firms have more chance of leveraging a competitive advantage over rival firms. However, this is not a mandate for firms to spend randomly
or wantonly.

When you strip back technology to its most basic form, it can be categorised as helping with either compliance or gaining advantage.

By compliance, I mean that
if everyone is using email
or sending documents electronically, a firm must do
the same to comply with that standard. And by and large, things that were initially technology advantages become compliance objects over time.

Law firms are pretty good at building compliant systems, and most off-the-shelf packages do what they promise, making it difficult to back a bad horse. So, we can turn our attention to the notion of gaining advantage through technology, and how a firm can benefit from this.

First, a question. If you buy the same software as your peers and competitors, how does that give you an advantage over them?

Software vendors will tell
you that their system is the best investment for your firm and, theoretically, one (or more)
of them is correct. Let’s say that one software package does a particular job better than its competitors so you buy it. What happens if all your competitors buy the same thing?

Flexible friend

You gain an advantage by building a better understanding of your processes and your strategy, and configure that system in a more intelligent or streamlined way than your
peers have managed. That is not as straightforward as it sounds.

Most off-the-shelf legal technology has an array
of potential options and configurable widgets so it can flex around a range of working practices and requirements.

The big ‘but’ is that in creating that flex, and not accepting a standard product, a firm has to understand its own requirements and be prepared to invest to ensure that the end product provides the required return.

When we talk about investment, we don’t mean the product cost. I have had many conversations with firms that line up a supplier then buy on the basis of the
deal cut for them. Unfortunately, the notion of investment dries up at that point, as does any potential competitive advantage it might bring.
 

Right level

Software investment starts with a purchase but needs to include a range of other phases, such as configuration and possibly even enhancement to make it work that 1 per cent better. This, in turn, gives you the competitive advantage you need to prosper.

Of course, getting the level
of investment right is not an accurate science, as it’s entirely possible to overdo as well as undercook things. (See table below for how I tend to think
of investment in software.)

The trick is working out the definition of the (non-capital) investment, i.e. the money spent not on software, machinery and licences, but on expertise to get
it into your desired shape. While
it may seem odd to include a no-investment category, some firms make a purchase then mothball their systems.

The notion of sufficient investment is hard to quantify, but whatever it is, my view is that most firms fall short and, as a result, any potential competitive advantage disappears. IT systems are only ever as good
as the processes they are built for. Ensure you get the process bit right then invest to make your systems mimic those.

Also, you may decide to
build systems that meet your requirements rather than buying off the shelf products. That’s an entirely different methodology; I will expand on it next month. SJ

Damian Blackburn is director of legal IT consultancy firm SLFtech