Simplified outsourcing

Top legal firm Hugh James has launched a unique automated toolkit for outsourcing contractsTop 100 law firm Hugh James has launched an intelligent solution that automates the measurement and control of all elements of service contract creation and management.
    
Integrated Contract Manager (ICM) enables organisations to minimise the risk, reduce the cost and accelerate the implementation of outsourcing and supply contracts.
    
Based on proven technology, ICM is a toolkit that provides organisations with everything they need to manage the financial, operational and contractual performance of their suppliers. It maps internal business needs to outsourcing requirements, enabling the user to select pre-defined best practice metrics and contract structures and measure performance against them, with full auditability and compliance.

Saving time and money
ICM saves organisations time and money by providing:

  • faster contract agreement and implementation – reducing legal and consulting fees
  • rapid, accurate performance reporting for pricing, governance and regulatory compliance
  • increased clarity and transparency of contract terms
  • elimination of performance disputes.

It also includes a built-in mechanism for improving performance and spend management. This is the first time a law firm has offered a solution of this type. It has been developed by Hugh James’s outsourcing and procurement specialists, who have managed global and procurement outsourcing projects worth over £1.5 billion in recent years, in partnership with IT specialist Oblicore and business process expert Jwood.com.

Simplifying procurement
ICM is currently being trialled by two leading public sector organisations, and the Hugh James team expects to obtain the results of these trials early in 2009.
    
“We developed this solution after seeing many organisations struggle with complex outsourcing contracts that are time consuming, resource heavy and expensive to implement,” explains Phillip Rees, Partner and head of Hugh James’ commercial, London and international practices.

“In our experience, up to 75 per cent of contracting requirements and service deliverables are the same. Standardisation using ICM means organisations can concentrate on the key 25 per cent of contractual and performance measurements for their business, enabling them to put the contract in place much more quickly while saving money and reducing their risks.

“It also helps to avoid disputes over disconnects between contractual obligations and the methods used to monitor service levels – so both users and their suppliers benefit.”

Details of ICM solution

Based on proven technology and ITIL standards, ICM will:

  • Define scope and performance metrics according to industry standards
  • Monitor performance (operational and contractual) in real time
  • Report on performance and financials to service providers and service users
  • Predict and identify problems as soon as they arise, enabling solutions to developed quickly
  • Provide a powerful spend analysis solution.

About Hugh James
Hugh James is one of the Top 100 law firms in the UK, providing a comprehensive range of commercial and private client services across the UK from a network of offices in South Wales and London. The firm has 50 partners and over 600 staff. Clients include Anheuser-Busch, Citigroup, Crown Estates, the Environment Agency, Kendle, Barratt Homes, Natural England, Norwich Union, Pelican PLC, Treasury Solicitors, the Welsh Rugby Union, Welsh Water, Wells Fargo, Welsh Assembly Government, Finance Wales, RBS and BOSIS.
    
Hugh James’ commercial team specialises in procurement and outsourcing, and has managed some of the largest global and procurement outsourcing projects. In the last few years, the team has advised on transactions of over £1.5 billion across financial markets, insurance, telecommunications and government. It also has a proven track record in UK public procurement, PPP and PFI projects, acting for central and local government organisations.

Making outsourcing work in an economic downturn
In the current economic downturn, all organisations are looking for opportunities for cost savings – making it a good time to consider outsourcing non-core business functions.

Analysts are already predicting that the demand for IT outsourcing will grow in 2009. For example, a recent report from industry analysts Ovum suggests that the UK's public sector could increase its demand for IT outsourcing service by 24 per cent each year until 2012.

However, Phillip Rees of Hugh James warns that businesses should be wary of treating outsourcing as merely a cost-cutting exercise. He advises that outsourcing deals that focus solely on achieving discounted pricing and removing headcount from the balance sheet, without carefully considering the business functions required, may compromise quality of service and innovation and prevent the added value that should result.
   
Rees also reminds organisations to take into account the ‘hidden’ costs of outsourcing, such as those associated with setting up the contract, managing the supplier, monitoring performance and ensuring data security. Too many outsourcing contracts, in his experience, are complex, time consuming, resource heavy and expensive to implement.

“Outsourcing offers significant opportunities for innovation and business process improvement, as well as to improve service delivery through the use of tailored service level agreements,” argues Rees.
   
“In addition, the ability to scale up and down the quantity of services being received offers flexibility, which an otherwise fixed internal business function would not normally permit.

“However, organisations need to ensure that the costs of setting up and managing the contract do not negate the savings that should arise, and should avoid simply outsourcing existing business processes without first considering whether these processes can be improved.

“We believe companies considering implementing outsourcing or revising existing arrangements in the current economic climate should use this as an opportunity to do business with more rigour. They should ensure that their contracts deliver the required functionality and service standards and add value to their business.

“ICM can help organisations to set up and manage their outsourcing contracts quickly and effectively, providing a strong foundation on which to establish strategic outsourcing relationships and implement smarter ways of managing and working with suppliers.”

About Phillip Rees
Phillip Rees is the head of Hugh James’ commercial, London and international practices. He is an acknowledged leader in the technology, telecoms, data protection, intellectual property and outsourcing fields, with over 25 years’ experience as a partner in UK national and international private practice as well as significant experience as a senior in-house lawyer.
   
From 1995 to 2000 he was Citigroup’s European General Counsel for technology law. He subsequently returned to private practice as a partner in one of the leading global law firms, Pillsbury Winthrop Shaw Pittman, where he advised a range of blue chip clients on complex transactions. Phillip is widely published and is currently the international news editor of the Computer and Telecommunication Law review.

For more information
For further information about Integrated Contract Manager please contact Phillip Rees on 020 7038 8301