To stay competitive these days, organizations of almost any type must be software-intensive. This means undertaking custom software projects that employ the newest technology trends. To secure this they more often than not need to engage third-party help.
A popular (bordering at no-brainer) approach for choosing an outsourcing provider is to select one that specializes in the client’s business vertical. This well-beaten path is believed to increase value for customers – and of course to boost deal sizes and margins for specialist vendors. But for many outsourced software projects, this purchasing shortcut may have its pitfalls.
First, there are severe non-compete restrictions and risks lurking behind the scene. Vendors of bespoke software who by definition must provide a unique solution to every client often have their hands tied with limitations spanning entire business sectors. After all, none of those clients trumpeted by such vendors as proof of its industry specialization would want even a hypothetical risk of their core intellectual property being leaked to their direct competition. Unfortunately, it is among sector specialist vendors that these human-factor-related leaks are more likely to happen.
Then, there’s the question of how substantial the declared industry specialization is. Upon looking more closely at what the provider has to offer, is it really worth that premium price tag? Industry experts observe that only large (above $250M in annual revenue) vendors who bill 1st-tier rates are likely to spend a substantial sum on industry-tailored solutions. Smaller providers tend to direct most if not all of their vertical specialization budgets toward producing attractive marketing content and running targeted sales campaigns – not exactly what a client would benefit from.
So it is no wonder that upon signing a promising contract with an industry specialist, a client might find himself faced with a bizarre non-compete blocker or – in an extreme case – a disclosure of crucial know-how. The most typical regret, however, is the cumbrously overpriced deal that turned out to be one more commoditized body shop.
And finally, at a more strategic level, in accordance with a recent survey by Accenture, 81% percent of respondents believe that industry boundaries start to dramatically blur as businesses embrace the interconnected digital economy.
Fortunately, there are other ways of delivering targeted software services to clients. They might look understated, but in fact they provide clients with quality and personalized solutions. As these methods will require more hard work on behalf of the vendor than vertical-focus marketing, clients can feel certain that they will benefit in a natural and lasting way. Edvantis works with all customers individually to really understand their business goals as well as their unique working culture. Then we plan and staff each project accordingly to maximize the delivery. At the same time, our R&D Labs will go the extra mile by analyzing the client’s technology stack and offering educated advice on which technologies might be missing or helpful. After that our wealth of business experience in dozens of vertical domains can be applied in a meaningful and non-conflicting way.
A client’s company size (or more importantly, its “cognitive size” in terms of market positioning and corporate culture) is one of the important factors to take into consideration when engineering an appropriate solution. Accordingly, based on thousands of software projects done for our clients of all sizes, Edvantis has carefully crafted two service lines carrying targeted advantages for two distinct categories of clients: Small-to-Medium Businesses and Enterprises. Click to learn more about the unique offerings of EDVANTIS80/20℠ and EDVANTIS100/50℠ and see which service line best matches your company DNA.
1 Source: “Vertical Market Specialization by BtoB Vendors,” The Shirman Group, Inc. 2010
2 Source: “Accenture Technology Vision: IT Trends 2015.”