When your firm or legal department has decided to take the first steps towards digital transformation, it is nearly impossible to avoid the discussion of software. While digital transformation is about much more than applications – it is a redefinition of people, processes, and technology through implementation of a digital-first culture, efficient operations, and seamlessly integrated, secure applications – it is fair to say the largest expenditure for the project will be in software licenses, configuration, and implementation.
Therefore, the software provider and implementation vendor selection process tends to be under heavy scrutiny, and it can make or break the digital transformation project. With the massive number of SaaS companies offering various solutions in the market, it can also be a daunting challenge to simply shortlist a few vendors – let alone make a meaningful comparison between solutions.
A common mistake that can be avoided is first deciding whether to go with a point solution, or a platform. If this isn’t decided early on, it becomes inevitable that the shortlist of vendors will include a mix of the two types of solutions, which can cloud the selection process with confusing comparisons.
A point solution is a tool or application that is designed to solve a single use-case challenge that exists in the business. It might be a stand-alone application, or a third-party add-on to an application. Think about a Document Management System (DMS) application; it is designed for that one purpose, and that one purpose only. You could manage your documents on a network drive, but it will never be as powerful as a dedicated, purpose-built DMS.
A platform solution is a software package that offers a robust foundation upon which many use cases, or applications, can be developed. This is often more important when specialized needs call for customized solutions. A common example is Microsoft SharePoint. By itself, it doesn’t solve any specific business need. But pages, lists, and document libraries can be created for the departments within a company in a way that they specifically require.
For any law firm or legal department considering investments in digital transformation tools, it is important to understand how the following criteria impact the decision, and then consider the overarching strategy and whether the impacts are acceptable in light of the big-picture.
If the firm needs a specific problem solved as quickly as possible, you might be better of with a point solution. It will cover the short-term needs and allow the firm to continue operations. Be aware, however, that the integration and maintenance costs of point solutions might outweigh the benefits of having a solution quickly.
Unsurprisingly, this can be a tricky factor. At first glance, the ROI on a platform solution seems better, but the person calculating the ROI must account for variable development costs and time spent by internal resources without the off-the-shelf point solution. This is a difficult number to predict and careful ranges have to be taken to account for variability as the project progresses.
A platform approach is a major project for any company; it requires a significant upfront investment, a dedicated team, and courage to see it through. As with any major project, there will be potholes along the way and it is important that the team can avoid them, or face them and plan accordingly. If the firm cannot undertake a complex platform-project, point-solutions might be the better approach for digital transformation.
Consider the firm’s 3-5 year business plan. Is the firm expecting massive international expansion? Or perhaps just domestic growth but doubling the headcount? These directly impact the decision on multiple fronts. A point-solution based landscape will have to account for increased license costs as the firm scales, potentially multiple server set-ups in different geographies, and a corresponding increase in complexity of support. A platform solution might be easier to scale, but can the IT team continue supporting and upgrading the platform and applications across the organization?
It is nearly impossible to make a broad statement recommending either point-solutions or platform solutions. However, it is important that the points in this article are well considered before even evaluating vendors. The difference in the operational reality, costs, implementation complexity, and employee experience between point- and platform- based solutions are so wide, that first would be better of choosing one path first, and then evaluating vendors in that specific space.