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June 07, 2004 (Computerworld) -- Even IT Legal Work Is Headed Offshore

Legal services for IT contracting may be the next function to move offshore, according to an attorney whose boutique technology law firm is engaged in setting up a service in India.

"IT contracts are integrally related to IT, and I have found that I am preaching to the choir when I discuss this cost-saving initiative with CIOs who have experienced the benefits of offshoring," says Larry Thomas, a partner at Thomas & Opp PA in Minneapolis.

Services would include a majority of the work involved in drawing up contracts for the purchase of software and hardware, as well as agreements for consulting, application service providers, software development and, yes, even outsourcing.

Thomas plans to train Indian MBAs and technical workers in all aspects of IT contracting and have them do the bulk of the work at a fraction of the cost of a well-trained U.S. paralegal, with high-priced attorneys merely reviewing and fine-tuning the work. Quality and turnaround time will improve, and costs can be cut by at least 50%, compared with internal contracting operations, he says.

The concept is already being tested at General Electric Co., where a captive company in India has been handling various procurement functions, including, most recently, IT contracting. But GE spokesman Peter Stack says the process of offshoring IT legal work is still in the experimental stage, and he wouldn't comment on the success of the effort.

—Kathleen Melymuka

Best Bits

The most useful parts of recent IT management and business books.

THE BOOK: Heads Up: How to Anticipate Business Surprises and Seize Opportunities First, by Kenneth G. McGee (Harvard Business School Press, 2004).

Given that the author is a Gartner Inc. analyst, there was a danger that this book would just be a marketing vehicle for Gartner's well-worn spiel about "the real-time enterprise." Fortunately, the book is deeper than that. McGee's premise is that business surprises (such as serious revenue shortfalls) really shouldn't be surprises at all, because there are always warning signs: information nuggets that either arrived too late or were ignored. McGee—appalled that companies still make strategic plans based on last year's market-share numbers—envisions a world in which sales executives see revenue the moment it's recorded and managers see daily profit-and-loss statements.

Managers may rightfully worry that this pitch for real-time information will only make the current infoglut worse. But the book provides a methodology for selecting only those high-value information streams that are truly worth monitoring. McGee also suggests a new position of "chief monitoring officer," but maybe today's high-price CEOs ought to do that work themselves. —Mitch Betts

Selling to the CIO

Everyone knows the No. 1 rule for selling IT stuff is to understand the CIO's problems and try to solve them—right? CIOs say enterprise software salespeople know their own products, but less than 15% of the sellers are rated as excellent at understanding the buyer's requirements and needs, according to a study by analysts at Stratagem Marketing Inc. in Herndon, Va.

Another key factor in making the sale is CIO confidence that the vendor will support the product afterward, Stratagem says. As Eric Goldfarb, CIO at Atlanta-based PRG-Schultz International Inc., recently put it in an online essay , "Over the course of implementing products or software, something's bound to break. The salesperson who stands by me over the years and doesn't run away at the first sign of trouble is going to be successful."

Benchmarks

Benchmarking, in which companies compare themselves against their role models, is essentially a quest to find the best practices for a particular business process. These are the most commonly benchmarked functions:

1. Information systems

2. Customer service/satisfaction

3. Employee development/training

4. Human resources

5. Knowledge management

Source: The Benchmarking Exchange, Aptos, Calif., May 2004

The IT Economy

• Canadian IT spending will grow 3% this year, led by government spending, according to Forrester Research Inc. The slower Canadian economic recovery means that IT spending growth will lag that of the U.S. by one or two quarters. Canadian government spending is strong because of e-government initiatives and the replacement of antiquated systems, Forrester says.

• Spending on offshore business process outsourcing is expected to reach $3 billion this year, a 65% increase from the 2003 total of $1.3 billion, according to Gartner.

Ups & Downs Which software providers are gaining or losing a share of your IT spending dollars? GAINING 1. Red Hat Inc. 2. Symantec Corp. 3. Mercury Interactive Corp. 4. SAP AG 5. Microsoft Corp. LOSING Computer Associates International Inc. Base: 100 IT managers at Fortune 1,000 companies Source: The Goldman Sachs Group Inc., New York, May 2004

Retail E-commerce Growth Rate Retail e-commerce still amounts to only 1.9% of overall U.S. retail spending. But online sales are growing faster than total sales. Source: U.S. Department of Commerce, May 2004 NOTE: Tech-Economy.org has discontinued the monthly IT confidence index previously published here.

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