Necessity is the mother of Innovation
I met Ayush, a sales leader based in Brussels, Belgium. He shared the concerns of his clients from Europe. Being in IT services industry, he had multiple marquee clients from the same industry.
The concerns of his clients were the disruption they were experiencing. Many challenger companies had started with the nimble solutions, aimed at their customers, with greater flexibility of the terms of engagement and better prices. It involved greater risks for the customers if they choose to take the products from the new entrants, however, it was working in the non-core areas of his clients. In fact, it was catching like wildfire. One success story and there was no looking back.
Could his clients not catch up quickly. Not really. When the organization size becomes big, new offerings takes time in internal approvals and over confidence plays its part that competitor will fizzle out soon and they should not stoop low either in the curtailed solution or low prices.
New challengers / startups are smart, having done their research on competition, including big ones, clearly understanding the gaps, and filling them up. And that is the worry of Ayush’s European client, as reflected in their business quarter on quarter.
What is the solution?
It is a catch 22 situation. Big organization will not be able to come up with new technological solution quickly. Also, IT services companies are not so great in product development. So, an IT services company is competing with a product company, where services company starts the solution development for its clients from first quadrant (first 25%) having accelerators, engineering components, tools integration knowledge and alike. However, product company offers to start from third quadrant (50-75%) with ready solution and minimal customization. On top of that, product company brings the domain knowledge, gathered from multiple customers, and is offered as an additional value, so the scope is not purely client given, but is aided with the best and emerging practices at the marketplace.
One of the emerging solutions, is the handshaking with emerging and may be smaller, technology startups, that can fill the existing gap in the offering of the established player.
