Vivo

Despite the increasing rise in outsourcing of many noncore business processes, there is one area in which the reverse is true: e-discovery.   As this  article notes, more and more companies are bringing e-discovery in-house.

Why In-house?

What we have found in our e-discovery practice, is that e-discovery “outsourcing” is not what is traditionally considered true outsourcing. Usually, when one thinks of outsourcing a process, it is to gain efficiencies, bring down costs, and/or to have an end-to-end solution – avoiding the need to build one from scratch.  In the e-discovery world, the vendors cannot deliver on at least two out of three of these common goals. First, there is no end-to-end solution. Presently, there are solutions that handle at least one major process, such as keyword search, deduplication, data culling, searching e-mail, IMs and unstructured file system data, but no one solution for all.  Then, there is the cost of administration.  Each vendor/solution provider has costly resources who can be deployed at a high hourly rate. However, the hourly rate, rate is often 2 times or more the rate of an in-house resource. As a result, many companies use these resources sparingly, and only when faced with a subpoena.

Finally, there’s the question of whether this can actually be fully outsourced. The information must stand up in court.  Some amount of in-house expertise is necessary, as the company’s data collection, retention, and destruction processes and procedure are often under fire as part of the legal proceedings.

Who Should be Concerned?

Many companies are hit with such high costs of e-discovery due to the “surprise” of litigation.  We have had clients actually tell us, “we do not litigate”, therefore they have not begun to think about e-discovery. We urge clients to consider the ramifications of a lawsuit – employment dispute, IP litigation, etc., as part of the holistic view of data storage.  For our clients, the upfront efforts, and the inclusion of “data  collection and production” in their business requirements, has made the process less costly and time-consuming down the road as if and when they are asked to produce hundreds of terabytes of data or face fines for failing to do so.

Having provided client-side resources for several similar projects, I read this analysis of Marin County’s decision to walk away from the $30 million it has dumped into its SAP implementation, with interest.

It is certainly not the first “failed” ERP implementation we have seen.  Just this week, our CEO delivered a presentation on controlling Fixed Price engagements, which explored this very topic.  But, as the author of this article suggests, it would appear that the decision to walk away from SAP seems more like a legal tactic than a business one.

This seems to be the same conclusion drawn by Mark F. O’Connor, CEO and co-founder of Monadnock Research , whom the author quotes, as saying, “[t]he Marin Information Systems and Technology group appears to have concluded that fixing the Deloitte-installed SAP application will cost nearly 25 percent more over a ten-year period than buying, modifying, implementing, and migrating data over to a new system in a protracted multi-phase project, during which time they would continue to operate the SAP environment concurrently, until going live on the respective new system modules”. That conclusion seems implausible to me.

The Marin/Deloitte project seemed to have suffered from what we see over and over when we are brought in after a project has gone significantly off track – or when a client is dissatisfied with its outsourcing provider.  Too much has been outsourced.   It is not plug and play in any sense of the word, and it is essential that everyone align expectations accordingly.  Mr. O’Connor said it best in this article: “Responsibility without authority, … always yields outcomes similar to what we see here in complex systems projects. There are literally thousands of important decisions that need be made by client staff during an implementation—while they continue to do their day jobs.”