What is expertise in a domain and why is it important?
In this article, we will try and explain why domain expertise is important for success in business or for that matter in your career also.
This applies to everyone, whichever country you are in, whichever career you opt for.
Let me explain.
Consider the software industry as our reference industry. This will make it easier for us to understand the key points and issues. Note that what we learn here is applicable to other industries too.
We are all aware the one constant in Software Technology is change. And, scientists expect lot more changes to come.
Various technologies keep popping up, many vanish, and some become successful and stay to make an impact in our lives.
For the end consumer this is very good, but can be quite demanding for software companies down the value chain. Many companies have fallen by the wayside unable to keep pace with the technology changes.
In today’s interconnected world, it does not take much time for a multi-national company to come up with a new product, or service from a distant city and launch it for a worldwide audience and in the process disrupt the industry. This article is intended to help you think of how you can create protective barriers from such disruptions.
To make it simpler, it is important for professionals to stay relevant with something valuable of their own. Something, which competitors will find difficult to match. The importance of domain expertise and how it can protect your investments, and examples of how companies have grown rapidly and stayed on for years should convince you to think and choose a suitable domain as your starting point.
For the sake of discussion let us narrow down our scope – and let us consider software development firms. How does a software firm protect itself from technology shift?
Let us consider the steps a software development firm undertakes:
- Acquire domain knowledge
- Develop code for specific orders and creating a codebase which can be reused.
- Train personnel who are conversant with your chosen domain
- Create a website and use cases which are tuned to your domain
- Train your marketing team to create a customer base and related contacts in the industry.
This is not an exhaustive list, but is only indicative.
Now, think it over.
The number of dollars you would have to invest to do all of the above in running your IT consulting unit can run into thousands.
Suppose you choose to execute projects in multiple domains. Then you have to invest the same number of dollars for every project.
Some consultants will disagree with this statement, and propose multiple domains.
However, anyone who has started and run his own consulting unit will tell you that it is true that if you operate in multiple domains costs add up and company personnel end up working at cross purposes.
A smart move would be to choose a larger domain with key and important sub domains.
The reality is each domain requires special attention and focus to create a software solution, upgrade it keeping with the user’s requirement, incorporating recent technologies and maintaining the code.
Most small sized IT companies in their eagerness to expand business put their resources in multiple domains and falter when confronted with ever expanding demand for additional resources.
This results in spreading resources thin and leads to cost cutting, which in turn can result in delay in acquiring core competency and competitive advantage.
This leads us to the next question – what are the benefits of acquiring core competency? Why should you consider domain expertise at all?
Let me introduce a concept ‘Core competency’ coined by Mr. CK Prahalad, a renowned management consultant. An explanation of the phrase is here.
Competitive advantage is a phrase coined by Prof. Michael E Porter. An explanation is here:
These two phrases can mean different things to different people. However, I believe domain expertise leads to core competency and core competency leads to competitive advantage.
What expertise and competitive advantage mean, is clearly explained here:
Remember, we are talking about startup sized IT service providers. For discussion, let us assume you are an IT service provider in, say, Nigeria.
Nigeria is heavily dependent on its natural resources and is slowly climbing in the world bank reports as a developing economy.
Suppose, you were to choose ERP office automation to oil ancillaries as your domain focus area.
- The first thing you do is setup an office and a team of developers, and marketing people.
- You will do market survey.
- You will start digital marketing (localized)
- You will build a core team of technical people
- You will participate in expos
- You will create a service portfolio
- You will create a flyer
- Get orders
- All of the above activities involve spending money and require a budget.
How does all of the above change if your firm has a domain focus?
- You will do a market survey of companies which fit with the services you offer in your domain
- Your digital marketing ads and websites will be focused.
- Your core team of technical people will have prior experience in your chosen domain
- You will participate in expos where your domain related visitors come in.
- Your services will be not be many but not few either. The number service you offer will be in relation to the number of technical people who are with you.
- Your flyer will be focused and uncluttered, similar to this one.
- So, all this is fine, what happens next?
As you gain much knowledge of your customers and services over say one year you would have also spent $100,000/- (just assuming).
In the next one year too you would have to go through some of the steps such as digital marketing, expos, flyers, etc. Now, the cost of doing all the above will come down to half as you have to repeat the cycle and no payments will be done for designing. This reduces the outflow, helping profitability.
As customer’s needs keep changing, and technology also changes for the better, it is imperative for an IT company to keep an ear to the ground and anticipate and plan for changes happening. This is a sure way to keep ahead of competitors.
Now, ask yourselves isn’t it logical to stick to one domain and specialize in it.
So, what is this sticking to one domain really mean?
When Bill Gates was asked what he would like to do next, he always used to say “Write a great piece of software”. This is exactly what I mean by domain expertise, writing software code, and designing apps.
It is Bill Gates incessant focus on one thing that is ‘write a great piece of software’, which brought him all the success and money and helped Microsoft build a core business around which several profit centers were built.
Do not miss the unsaid – that ‘Great’ does not mean best piece of software. Great simply meant which lots of people could use. Best software was left to others do.
The same question “what would he like to do next?” was posed to Mr. Narayan Murthy of Infosys. Infosys for those who may not be aware of, is a giant H1B (US work visa) body shopping company headquartered in India, listed on NASDAQ. Of course, they do many other things but their core income is from providing hardworking, academically qualified, engineers who are supplied as contract workers to a company.
Mr. Murthy’s reply to the question was “I would like to scale up”, meaning he would like Infosys to build more and more infrastructure to meet the anticipated everlasting demand for young well qualified professionals willing sacrifice anything for a job in USA.
Obviously, for a services company focused on providing trained people, it is imperative to keep upgrading their service infrastructure to impress and convince prospective customers.
But, the line “I would like to scale up” is not a desired answer for a startup and not as convincing from a business plan point of view.
If you were to stick to one domain your answer would be far better and smarter and convey what you and your company does very clearly, with specific emphasis on technology. Suppose, you were an ERP software solutions provider in Saudi Arabia with focus on Aerospace industry you would say “provide great ERP software for Aerospace manufacturing Industry”.
By sticking to writing Great Piece of Software, Microsoft adroitly moved to cloud computing as desktop computing slowed down and smartphone operating system was conquered by Google ( android ) and Apple ( IoS ).
With the restrictions in H1B body shopping, and automation of a number of software tasks, Infosys is struggling to change tack and sustain its envied growth rate.
With no innovations of its own, and an inherent culture of being risk averse, Infosys has a challenging task ahead. In hindsight, the answer to the question “what would you like to do?” should have been different.
With a proper well chosen domain expertise, your business plan would look extremely professional and future proof with such a focus.
If you look around there are many companies which have succeeded by sticking to one domain, whether manufacturers of chewing gum (wrigleys) or software (Microsoft) or hersheys or hard drive (seagate). These are all large corporate companies but were small at one point in time.
With domain expertise you can increase your area of influence.
Who should consider the theory of sticking to one domain?
- Custom software solution providers – Software Architects
- Digital marketers
- Content Documentation Creators
Who should not consider the principle of sticking to one domain?
- Coders – programmers
- UI designers
How to quickly acquire expertise in a domain
The best way to quickly acquire expertise in a specific domain is defining. Most people after having been convinced of the benefits of domain expertise make the mistake of not defining their domain of choice clearly. Let us examine this closely.
Suppose, you were to choose ERP – which is an acronym for Enterprise Resource Planning.
ERP in a factory scenario includes stock management, production management, supplier management, customer management, and finance management, human resource management.
ERP in an educational institution includes student management, faculty management, and schedule management, examination management.
It is important to define your domain properly and clearly before you start acquiring knowledge in the domain.
How does the profile of a software developer who has acquired domain expertise look like?
We are assuming the person we are referring to is a software developer and the domain is a factory.
- Knowledge of working of a factory
- Aware of all the events which occur in a typical factory
- Thorough knowledge of designing a form, data recorded, validations implemented, reports generated and design of the application.
- Knowledge of creating and hosting websites, maintenance.
- Knowledge of interacting with digital marketing company to promote the website. Aware of basic SEO optimization of websites.
- Can enhance user interface using Angular JS.
- Can design applications using containers.
- Can host web sites on cloud software such as AWS, Azure, or Google.
- Can design and develop applications for the android and iphone operating systems.
When a company human resource manager looks at the above profile, the first thing which strikes him is the familiarity of the applicant with the working of the factory.
This is very important because, the applicant can start contributing from day one.
There are hundreds of domains which you can choose to become proficient in. A few important points to keep in mind are: (this list applies to companies)
- Are the companies in the domains you are considering profitable?
- What is the competition in the domain?
- Are the companies already computerized? If yes, what additional services they require?
- How many companies are in your motor able vicinity?
- Will these companies accept online delivery of solutions?
- Do they need high security apps?
Answers to these questions can be used to determine the choice of your domain.
Suppose, you are into IoT you can choose from:
Civil Engineering, Healthcare, Infrastructure, Industrial IoT, Retail and so on.
Each one of the above has a great future and expected to grow in the coming years.
Choose a higher level domain:
A very narrow domain is not recommended. Common sense will usually tell you what should be the exact line which defines your chosen domain. Rewrite, rework, take your time to define your domain, with the knowledge
Each one of the above has a great future and expected to grow in the coming years.
The cases I have considered in this article are software and software firms. However, the same principles apply to other industries too. With rapid technological advancements, record keeping, people management at the lower level, and many other activities are being automated.
As creative thinking and conceptual understanding becomes the norm domain knowledge and expertise becomes the basic requirement.