Yes and no. If we look at the history of the ERP solution, as an example, we find that it was initially meant for and deeply entrenched in Manufacturing organisations. In fact, the precursor to modern-day ERP is the Manufacturing Resource Planning (MRP II) software of the 1980s. Now, we primarily look at ERP as a cross-industry solution. Every business has taken lessons on inventory and supply chain management from the Manufacturing industry and has an enterprise-wide system. However, there are industries such as Hospitality and Healthcare that have their niche vendors who bundle in ERP features with their industry-specific solutions. This will be the general pattern that all tech solutions will follow: a) an industry use case will become popular; b) other industries will try to incorporate that solution, and in the process; c) create their own industry-specific customisations. It is important, therefore, for those who are evaluating emerging technologies to cast their net wide to identify use cases from other industries.
AI and automation is one such tech area where organisations should look to leverage cross-industry expertise. They should ask their vendors about their implementations in other allied industries and, in some cases, in industries that are not allied.
For cybersecurity, their approach should be entirely different. As companies move on from network security to more specific areas such as data security and emerging areas such as GRC communication, it will be important to evaluate industry experience. Data protection and compliance laws are often specific to industries – for example, while customer-focused industries are mandated on how to handle customer data, the Banking, Insurance, Healthcare and Public Sector industries have the need to store more sensitive data than other industries. They should look at solutions that have in-built checks and balances in place, incorporating their GRC requirements.
So, the answer to whether organisations should look for industry expertise in their vendors is that they should for more mature tech areas. An eCommerce company should look for industry experience when choosing a web hosting partner, but should look for experience in other industries such as Banking, when they are looking to invest in virtual assistants.
Are some industries more focused on industry experience than others?
Ecosystm research also sought to find out which industries look for industry expertise more than others (Figure 2). Surprisingly, there are no clear differences across industries. The Services, Healthcare and Public Sector industries emphasise marginally more on industry expertise – but the differences are almost negligible.
There are some differences when we look at specific tech areas, however. For example, industries that may be considered early adopters of IoT – Transportation, Manufacturing and Healthcare – tend to give more credit to industry experience because there are previous use cases that they can leverage. There are industries that are still formulating standards when it comes to IoT and they will be more open to evaluating vendors that have a successful solution for their requirement – irrespective of the industry.
The Healthcare Industry Example
Ecosystm Principal Analyst, Sash Mukherjee says, “In today’s fast-evolving technology market, it is important to go beyond use cases in only your industries and look for vendors that have a demonstrated history of innovation and experience in delivering measurable results, irrespective of the industry.” Mukherjee takes the example of the Healthcare industry. “No one vendor can provide the entire gamut of functionalities required for patient lifecycle management. In spite of recent trends of multi-capability vendors, hospitals need multiple vendors for the hospital information systems (HIS), ERP, HR systems, document management systems, auxiliary department systems and so on. For some areas such as electronic health records (EHR) systems, obviously industry expertise is paramount. However, if healthcare organisations continue to look for industry expertise and partner with the same vendors, they miss out on important learnings from other industries.”
Talking about industries that have influenced and will influence the Healthcare industry in the very near future, Mukherjee says, “Healthcare providers have learnt a lot from the Manufacturing industry – and several organisations have evaluated and implemented Lean Healthcare and Six Sigma to improve clinical outcomes. The industry has also learnt from the Retail and Hospitality industries on how to be customer focused. In the Top 5 Healthtech trends for 2020, I had pointed out the similarities between the Financial and Healthcare industries (stringent regulations, process-based legacy systems and so on). As the Healthcare industry focuses on value-based outcomes, governments introduce more regulations around accountability and transparency, and people expect the experience that they get out of their retail interactions, Healthtech start-ups will become as mainstream as Fintech start-ups.”
It is time for tech buyers to re-evaluate whether they are restricting themselves by looking at industry use cases, especially for emerging technologies. While less industry customisations mean easier deployments, it may also hamper innovation.