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
The problem is not so much in the manufacturing industries, where ERP started. Indeed, there are ERP providers with strong operational support for, say, or engineer-to-order manufacturers with native PDM integration, or, for metal processing centers, with nesting logic.
The problem is when you get outside manufacturing. For example, some vendors claim to support the financial services sector, but you can't find 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 when you drill deeper
, you find not just "food and beverage," but "bakery, grain, and cereals," and "confectionery." I've worked with manufacturing systems for over 30 years, and even I'm not sure how the requirements for those sub-industries would be different. But I'll take Infor's word for it.
So far, so good. But 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 functionality between healthcare providers and from 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.
Today, Infor took another step to build out its operational support for healthcare providers, announcing its intent
to acquire GRASP Systems International
. It's 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, say, 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 less critical condition. Even two patients with the same condition may require different levels of attention, 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 actual needs of patients.
Infor's acquisition of GRASP goes beyond just picking up its software products. GRASP also has a significant 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, as I've pointed out recently
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.
Infor and Salesforce.com: More Than a Barney Relationship
Infor's Two-Pronged Cloud Strategy
New details on Infor's Lawson acquisition
Making money in software with a niche-industry strategy
Labels: ERP, healthcare, Infor, Lawson