Considering a Transition from On-Premise DMS to Saas-Based DMS
*This guest blog was written by Dan Anderson, Co-founder, and CEO of SeeUnity
Over the past couple of years or so, the legal market has begun to trend away from on-premise DMS. More and more firms have been flirting with the idea of Cloud or SaaS DMS. In the AM Law 200, we know that NetDocuments owns at least 16.5% of the market. And while iManage offers both on-premise and cloud DMS, they own about 70.5% of the AM Law 200. (via The Legal IT Insider October 2017 issue.) Of those who have used iManage on-premise for a while, there has also been a steady transition over to the iManage Cloud. The 2017 ILTA Technology Survey also shed some light on the idea that the conversation about moving to the cloud is no longer “will we adopt a cloud DMS?” and has shifted to “when are we going to do it?” 14% of firms surveyed through ILTA were already using a hosted DMS, with the highest percentage coming from smaller firms. Just in the past few months, we have seen larger firms begin to take the leap to SaaS DMS systems.
As we see this trend continue, I want to take some time to talk about the considerations firms make when selecting which route is best for them.
IT time and costs associated with maintaining and upgrading systems is an important consideration. On-premise systems require a lot of in-house work and expertise from your IT department to maintain or upgrade your DMS where SaaS or cloud systems include this in the price you pay to use their software. It might make more sense to invest in migrating to a system where the host, like NetDocuments or iManage, maintains the system for you. Of course, you also have to look at the costs associated with the migration from an on-premise system to the cloud itself. Upfront costs of a migration are hefty investments and require a significant amount of capital and time depending on how large your firm is. Over time, you could be spending less to maintain a SaaS system, rather than on-premise.
Additionally, going from an on-premise DMS with large license fees to a SaaS or Cloud DMA could also shift costs from being capital expenses to operating expenses. This could benefit your organization when it comes to taxes and be more favorable to stakeholders. This might be more attractive to corporate legal departments than smaller firms, but it is a definite cost consideration.
Another consideration to make is the change management involved with switching from on-premise to SaaS. One of the many reasons why smaller firms seem to be adopting cloud systems quicker than the larger firms has to do with resistance to change. Firms that have seasoned senior partners that have been practicing for 20 or more years also seem to have a higher resistance to change. These senior partners are used to the way things are, and they don’t always see the benefits of transitioning to cloud systems the way others do. In just a few years, the millennial workforce is going to fill the majority, taking over both Baby Boomers and Gen X. Millennials’ expectations differ greatly from that of the older senior partners. I have previously written about millennials and referred to their way of working as “unchaining from the enterprise.” They prefer to work on-the-go and expect mobile access to content. Firms want to stay competitive with regard to hiring and attracting talent, and in order to do this, they have to seriously consider a SaaS DMS.
In addition to the resistance to change by senior partners, larger, more established firms also have the resources and infrastructure to continue to run and maintain on-premise systems. They have also invested heavily in personnel and hardware. To make a change to a Cloud-based DMS might mean letting people go, and it might make them feel like they have wasted resources that they invested in their on-premise systems. On the other hand, small firms almost have to “outsource” most or even all of their IT maintenance due to a lack of resources. SaaS solutions are extremely beneficial to smaller firms so they can focus on serving their clients, rather than maintaining their various business systems.
Moving to a cloud-based DMS has other considerations as well. You must keep in mind all the third-party integrations you might have with your current system. Will the same kind of integration work with a cloud DMS? Are you going to lose any functionality? What is the total scope of the impact of migrating to the cloud? Users are going to have to be your main concern here. Not only is user adoption a consideration, but you must also think about the user experience. If loss of functionality and integrations are going to be an issue, it may not be the best idea to move just yet.
Another user-centric consideration has to do with clients. While it is unlikely that your clients will have access to your DMS, they might have access to an extranet or collaboration platform like HighQ. These users are also going to have a different set of needs. First and foremost, they are likely going to want high security. They might also expect 100% uptime. With a SaaS DMS and other business applications, uptime is going to be something the hosting organization will maintain. In the end, your clients will remain happy, and it will be one less thing to worry about.
Finally, firms are going to also have to consider whether or not their IT department is ready to give up control of their DMS. This is a rather large consideration for those firms that have very customized systems. They are going to lose the ability to make instant changes to the system and will be limited to the types of customization they are accustom to.
I believe that the trend to cloud and SaaS DMS is going to continue for years to come because law firms and large organizations want to get out of the business of maintaining these systems. The amount of content stored in these document management systems has grown exponentially over the past few years alone. Imagine what that will look like in 10, 15, even 20 years. The cost associated with hosting data locally might become too great a burden for some firms. When they should be focusing on providing the best service to clients, it is hard to imagine them being effective if they are also trying to maintain their on-premise DMS when they don’t have the resources. Firms also want to stay innovative to attract the best workforce and maintain their competitiveness in the market. This is true for any business. Law firms just so happen to be the best example of this because many large firms have been around for 100 or more years.