- Major Studies
- Market Assessments
Most enterprise software providers today claim to target certain industry sectors, but when you scratch below the
surface you find that their so-called industry focus is not much more than a market strategy. There is little if any support for the core operations of those industries. At best, such providers give a tip-of-the-hat to certain industries in their horizontal applications, such as accounting or HR management.
The problem is not so much in the manufacturing industries, where ERP started. There are ERP providers with strong operational support for engineer-to-order manufacturers with native PDM integration or for metal processing centers, with nesting logic.
But outside the manufacturing sector, there is a problem finding solutions that fit specific industry needs. For example, some vendors claim to support the financial services sector yet they do not have a core banking or insurance claims module in their portfolios. Ask about those, and the vendor will give you a list of partner solutions. In other words, there is not a serious effort to support those industry-specific operational requirements.
Infor as an Example
One example of a provider that is putting some weight behind its industry strategy is Infor, the third largest provider of enterprise software after SAP and Oracle. Since Charles Phillips took the helm as CEO in 2010, Infor has been building out its capabilities to match its tagline, which reads in part, "Specialized by Industry." Its website lists 12 industries, from aerospace and defense to public sector. But drill deeper and it one finds not just "food and beverage," but "bakery, grain, and cereals," and "confectionery." It may not be readily apparent how the requirements for those sub-industries would be different. Yet Infor finds them to be distinct.
So far, so good. However, Infor has taken the concept of industry specialization beyond manufacturing and is applying it to the non-goods-producing sectors as well, such as in healthcare. The firm has already acquired and built out solutions for hospitals, extended care providers, and health insurers, along with data integration among healthcare providers and with medical devices. These solutions go a long way to address the day-to-day operational activities of healthcare providers, not just their administrative support needs.
Recently, Infor took another step to build out its operational support for healthcare providers, announcing its intent to acquire GRASP Systems International. It is an interesting move. Infor already supports healthcare workforce management (e.g. nursing staff scheduling) through systems it picked up with its Lawson and Workbrain acquisitions. But its acquisition of GRASP will take that a step further.
GRASP goes beyond simple scheduling of, for example, nursing staff based on the number of patients. Rather it provides "automated patient acuity," which means it takes into account "the unique set of interventions required for each patient." In other words, a patient in critical condition will need more attention than one in a less critical condition. Even two patients with the same condition may require different levels of intervention, depending on other factors. The ability to more precisely allocate healthcare staff not only improves productivity, thus saving money, it also improves outcomes by allocating staff according to the actual needs of patients.
Infor's acquisition of GRASP also carries with it a professional services group, which means Infor is acquiring some good healthcare industry talent as well.
A Blueprint for Growth
ERP is by every definition a mature market. The need for horizontal solutions such as basic accounting and HRMS are more than adequately provided by a set of well-established competitors. Of course, there is an opportunity for new cloud upstarts to displace these incumbent providers.
But in addition to cloud deployment, another way for enterprise software providers to grow is to better serve specific industry sectors, drilling down beyond administrative support into deep operational processes. There are hundreds of small providers, such as GRASP, that have taken this approach. Infor is one larger provider that is attempting this at scale, in a number of industry sectors.
It is a blueprint that others will do well to emulate.
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