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Supply-chain software and service vendors long have leveraged their experience and capabilities in particular industry segments. But as customers become more cautious with their budgets and more demanding of rapid return on investment, vertical strength is increasingly crucial to market success.
"Customers now want less than 12 months' payback so there isn't time for a lot of customization," says Chris Jones, executive vice president of corporate development and marketing at SynQuest, a supply-chain software company based in Atlanta. "They want something that can quickly solve their business problems, and they want the people who walk in the door to actually know what their business is about."
Buyers today are jaded by their past experiences, adds Scott Zahn, vice president of business development at Optum, a supply-chain execution systems vendor based in White Plains, N.Y. They have probably been "woefully underwhelmed" by prior software implementations, he says, and are looking for the kind of credibility that comes from successful projects at like companies. "There is safety in numbers," adds Kelly Vizzini, vice president of corporate marketing at Optum. "In this climate, everyone is risk averse and they want to go with what they know will work."
This trend applies to third-party logistics providers (3PLs) and consultants as well. "If you are one of the world's largest computer manufacturers and you have 20 requests for quotes coming out over the next 36 months, you want to be dealing with a sales professional who really understands the exigencies of your business," says Chris Liberty, group vice president for consumer products at APL Logistics, Oakland. "This customer will say, 'Don't send me a guy who worked on shoes yesterday and Rice Krispies the day before and bed sheets the day before that. I want a guy who understands what goes on in the computer world.'"
|"Software today is highly configurable, but you have to have the vision to drive it like a Ferrari."|
- Stephen Banker of ARC Advisory Group
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