Building Domain competency in the software industry

Building domain competency


Indian software services companies are well aware of the need to develop strong domain competency. What does domain competency mean for a software services company ?

Software companies are in the business of providing information technology based solutions for business problems. So associates must understand the client’s business and how it is positioned against that of competitiors.That in turn calls for a good understanding of the industry trends, the rules of the game, how value is being created, the basis for competition, and the strengths and weaknesses of the major players in the client’s industry.

But ultimately, the skill of a software consultant will not lie in posing as an intellectual expert who can predict long term industry trends as a management guru like CK Prahalad might, but as someone who can smell where IT can be meaningfully used to achieve one of the three objectives: increase efficiency or cut costs, improve effectiveness and facilitate innovation. IT can typically be used where there is scope for streamlining and automating structured, transaction intensive processes. Areas which involve considerable human ingenuity and are unstructured as well as one time activities are less amenable to IT intervention. Thus in merchant banking, the real IT opportunity lies in settling trades, not in deal making.

In short, building domain competency involves developing:
a) A broad understanding of the industry structure and trends
b) A detailed understanding of the company’s business model
c) A good understanding of the industry value chain and the segment occupied by the client
d) Clarity on where to use information technology to improve business processes.

Clearly, the competitive advantage of Indian software companies will increasingly lie in marrying industry knowledge and technological enterprise, and the ability to work at the intersection of the two. Raising three questions as a matter of habit can go a long way in making our techies true consultants. What is the business problem that the client is trying to solve? Is it amenable to IT intervention? What kind of technology will provide the most value to the client? Coding should succeed, not precede these questions.