Is Your Vendor Committed to Your Industry? Key Questions to Ask

Posted by Dan Miklovic on Thu, Jul 09, 2015 @ 11:41 AM

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cost-of-quality-program-4.jpgAs the spring season of automation and manufacturing software vendor events wraps up, it seems there is a recurring theme vendors are communicating to the marketplace at these events: We are becoming solution providers and we are focusing on the needs of industry. But how can you tell if this is real or rhetoric?

Almost all of the vendors have formed vertical industry marketing groups and are setting up industry centers to showcase their solutions. Even hardware centric suppliers in the automation sector are realizing that people are shifting from buying devices to buying systems and complete solutions that automate business processes, not just a piece of machinery. Users should expect to be inundated with messages from the vendor community about how they can help their business achieve Operational Excellence. The challenge for users will be separating the “chaff from the wheat.” This leads to the important question:

“Does this supplier really understand the problems in my industry, and are they able to help my company in our pursuit of Operational Excellence?”

This blog post provides some guidance on how to tell if a supplier is really committed to your industry. It also discusses if a supplier is going to deliver real business process solutions, instead of just products with industry-specific marketing material and no real industry-specific functionality.

Does the Vendor Have an Industry Center of Excellence?

One sign the vendor is committed to your industry is if it has a center where its solutions are showcased in an industry context. The center should be located in a city that is in the heart of the industry, such as Houston for oil & gas, Detroit for automotive, or Philadelphia for the pharmaceutical industry. If not within a recognized hub, the center should at least be found somewhere else within the region where the industry concentrates, and should also be staffed by people with both technical and managerial experience within the industry.

To the extent possible, they should have real systems installed to demonstrate the functionality that is specific to each industry. This means the center will have production equipment on site and have the ability to test and demonstrate the hardware and software it’s selling into the industry. Lastly, an industry-committed vendor will use this space to host events and user group meetings that bring together the users in the industry to share ideas, problems, and solutions.

Does the Vendor Have an Industry Community Program?

The vendor should sponsor an industry special interest group within the larger user group community, and this group should have an online forum or social networking presence that helps users share and exchange information. Along with having a social presence, the vendor is expected to underwrite the cost of maintaining that forum, and also to be an active participant with its industry experts contributing to the discussion. The vendor should host periodic, face-to-face events where industry members come together and do the same. At the same time, the vendor should let the users drive the agenda, discussions, and take the lead in formulating the user group meeting agenda. 

Is the Vendor Demonstrating Industry Knowledge?

Besides demonstrating products and solutions in a user community or at its industry solution center, ask yourself if the vendor is demonstrating thought leadership in the industry. This can be shown in a number of ways. One example is producing marketing content that is focused on industry issues, needs, and thought leadership as well as challenges and potential solutions specific to the industry. This means crafting marketing material that is not about products and services but about issues and solutions.

Obviously, if the vendor has a solution it may be on showcase, but the best way to truly demonstrate industry knowledge is in the context of a case study of how a customer applied the vendor’s technology to solve a problem. Another way to show thought leadership is by participating in industry conferences delivering presentations and papers that highlight the issues the industry faces and how technology can help address those issues. These presentations and papers need to be non-commercial and focus on the technology in general, not the vendor’s specific products.

The vendor should also participate in industry standards efforts, providing technical expertise that helps the community formulate communication and architecture standards. These are needed to solve the problems specific to that industry that are not addressed by larger cross-industry standards efforts.

Is the Vendor a Fair Weather Industry Provider or Committed for the Long Haul?

Most industries have business cycles. Several years ago the Chinese economy was booming in the mining industry, which supplies much of the raw material for manufacturing. Eventually this trickled into a boom for manufactured goods as well. Today the mining industry is at an extreme low. When oil was over $100/bbl, the oil industry was spending like there was no tomorrow. Today prices are half that, and the upstream and midstream sectors are very cautious about spending. The test of a vendor’s commitment to an industry is:

“Do they provide the support mentioned above during the down cycle?”

Though the vendor may scale it back to a degree, if it isn’t actively showing industry commitment during the down cycle it sends the message that it’s not going to be committed for the long term. At a recent event I was discussing the mining industry with a particular vendor. The vendor rep said mining was an area of desired growth for the business. I asked when and how that was going to happen. The answer was that today the industry was spending so little, the company was going to wait to do something. That is not a sign that a vendor has the industry as a strategic market. It’s a sign of opportunistic tactics that focus on how the vendor can pad its bottom line, rather than what problems within an industry it can help to solve, in good times or bad.

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