How Important is Industry Vertical Experience in a Digital Transformation?

Written By: Brian Potts
Date: October 11, 2018

“Do you have direct experience in our space?” As consultants, we hear this question every day. Clients often want to know how important industry vertical experience is to a digital transformation or ERP implementation.

Recently, I have been asked if we have experience with:

  • Baby food manufacturing
  • Tier 2 defense manufacturing
  • Public, Fortune 500 pharmaceuticals
  • Automotive parts distribution
  • EU medical device regulation
  • Etc.

The answer is yes, we do.

However, this level of defined experience is not what really matters. When evaluating lessons from 1,000+ ERP implementations, we have found nothing that relates to industry experience. There is this bizarre belief with many companies that when hiring a consultant to evaluate technology that specific and direct vertical experience to the product level is necessary - It is not.

The top ERP systems of 2019 and the leading systems integrators such as Deloitte, Accenture, and Capgemini are not in the positions they are because of industry experience.

What matters is transferable process understanding and business acumen. Any business or organization can be broken down to singular processes that link together to form a “vertical” or business focus. Any number of businesses will share the same or similar processes within that greater vertical market and arrange them differently to create a unique product or service. A solid organizational change management strategy is much more important than industry vertical experience.

Manufacturing is the easiest example: you put various pieces and parts through defined processes to get a final product. The raw materials will vary, and therefore the end product will vary. Most people understand this, but still argue that they MUST have a consultant with their specific product or service background.

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Why is this? Here’s a few key points to consider:

1) In general, the processes in any core businesses function don’t vary too much.

If you think you are vastly unique, think again. The difference in vertical markets is which core functions they include, not the functionality themselves. You may even have different processes from a number of different verticals, like both process and discrete manufacturing. Still not that big of a deal. As long as you have a consultant that understands the general flow of processes within a general vertical market (manufacturing, professional services, etc.), you are good. It is far better to have a consultant with varied experience than limited, focused experience.

2) Regulatory requirements are not unique.

The specifics in terms of what needs to be tracked and how reports are tabulated may vary, but regulation is simply that.

3) Every business does have a small degree of unique differentiation, even within vertical markets.

If you are truly unique, there is no consultant on the planet that will have the holistic experience of your process variations. The value of a consultant is the ability to identify if those processes make sense and if they provide business value. “Unique” does not always mean “good.” The best independent ERP consultants tend to understand this more than most.

4) The concept that you will “save time and money” by finding a consultant who has exact and specific experience is misleading.

Any consultant who has mapped processes or been doing their job for a few years can understand your processes fairly quickly, and we are talking about a very small amount of time or money to “learn” what you do. Your processes will need to be mapped and evaluated at an individual level, regardless.

If you have a good or bad experience with a process consultant and understanding of your very niche vertical, please share. And if you still believe you are in a space that is so unique that nobody can possibly help you, we love unique business models and would love to talk.

Brian Potts

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