The consultants at Booz and Company who publish strategy + business magazine recently ran an article Winning Moves in 12 Industries. The gist of the article is that in 2012 the authors expect companies in various industries to try to develop new capabilities to differentiate themselves. Mainly it is a way for Booz consultants to show off their knowledge in a bunch of different industries.
I was fascinated to see the title and contents in their article about the technology industry: Technology: Digitize the Verticals. Rather than just link to the article, I will repeat it here in its entirety, as it is very short. Note that the highlights are mine:
The combined trends of cloud computing, connectivity, and big data analytics are forcing information and communications technology (ICT) companies, and their customers, to rethink their established ways of doing business. Technology is finally living up to its promise: Industry after industry — healthcare, utilities, transportation, and others — can now change their product offerings, go-to-market strategies, and internal business operations, thanks to emerging IT building blocks. This presents an opportunity for technology companies to become active partners of industry verticals (the value chains of interrelated companies in particular sectors) as they embark on digital transformations.
To take on this role, however, the leading IT companies will need to build new capabilities systems. They must get even better at understanding how each industry vertical conducts its business, where to find opportunities to drive value, and how emerging technologies can help solve the specific challenges each industry vertical faces. They must learn to work collaboratively with customers to build industry-specific solutions that can scale across corporate boundaries. They must provide the security and reliability that no one else can, especially across the span of a supply chain. In short, IT companies must become better at designing new high-touch, customized operating models for new types of customers — the companies embedded in vertical industries, traveling down the digital road.
- Toshiya Imai is a partner in Tokyo.
- Alex Koster is a principal in Zurich.
- Kenny Kurtzman is a senior partner in Houston.
- Matthew Le Merle is a partner in San Francisco.
- Pierre Peladeau is a partner in Paris.
What the Booz folks are describing, in part, are Industry in the Cloud platforms. They are right that industry after industry is digitizing its operations. I think they see their traditional clients, Information and Communications Technology companies (ICT) contributing to this, but they may be missing the rise of the smaller SaaS companies that exist solely to become the very platform that ties together an industry’s ecosystem.
The same “emerging IT building blocks” that the Booz folks refer to in their article mean that more of these solutions can come from entrepreneurs from these verticals or very small ventures with a mix of IT skills and domain knowledge, rather than from the traditional behemoths that Booz consults to. In vertical after vertical, there’s a relatively small guy trying to make it big by tying together an enormously and complex ecosystem. It is 1999 and 2000 all over again, but this time the capabilities are closer to the hype.