In the past six months, large international IT corporations like Microsoft, Deltek and Oracle have acquired industry-specific IT solutions and companies that develop industry solutions at an unprecedented pace. The market for IT solutions tailored to the clients’ core business for quick implementation is growing rapidly.
According to the latest research from IT market intelligence firm IDC, the IT industry is bouncing back from the IT bubble and the financial crisis. Growth is back on the agenda. Businesses and consumers are buying IT systems and solutions again. But the demands are higher now. Businesses want to make sure their IT investments yield the expected ROI. In short, they are looking for specialized standard solutions that can be delivered and implemented quickly, and the solutions need to work from day one.
For too many years, large consulting firms got away with palming off complex, generic IT systems on their clients, requiring countless consulting hours for customization. Fortunately, much greater demands are put on consulting firms today.
First of all, the time factor is completely different now. Today businesses expect to have a fully implemented ERP solution set up in weeks or a few months, and they want the system to work and provide the expected benefits from day one. The entire preparation process has changed as well. If an IT company shows up for a client meeting asking questions and presenting a preliminary plan, they will probably be asked to leave.
Clients expect the IT companies to come up with the answers. IT companies must know their target industries and clients so well that the client can simply ask for a set of best practices and expect to get the ideal system to cover their needs. Accordingly, the IT companies – not the clients – need to have all the answers.
The IT companies must know their industries so well that they can identify the perfect solution for each client. They must standardize this solution for subsequent rollout to all client subsidiaries worldwide – all in a time span previously allocated for nothing more than a pre-analysis. Clients expect IT companies to deliver these solutions out of the box – and do it quickly. Fast ROI is crucial.
This paradigm shift has caused businesses such as Microsoft, Deltek, Oracle to make sizeable acquisitions of companies offering customized industry solutions. For instance, Microsoft has purchased a retail solution from the consulting firm Columbus IT.
And Deltek acquired its Danish competitor Maconomy a few months ago. Finally, Oracle’s acquisition of Phase Forward and Convergin can be interpreted as a desire to get closer to large, resource-demanding clients. These acquisitions not only allow the companies to tap into a new client base – they also involve technology that will enable them to better match their IT solutions with their clients.
I believe the trend toward a wide variety of specialized IT solutions will continue its surge, simply because clients demand it. And who can blame them?