Today, Google search is a commodity, or that is what we believe. The success of Google in a product category as sophisticated as ‘search’ is underscored by the extreme nuancing it brings from the multiple domains of – data structures, algorithms, semantics, natural languages, and statistics, all synthesised into a user-friendly solution. Likewise, Amazon has addressed the complex problem of a multi-product supply chain and condensed the procurement jigsaw into apps on hand-held devices.
Thus, in order to excel today, it is imperative that domain nuances are well-understood.
Furthermore, in any ecosystem, all players, no matter how small their role might be in the product, service, or solution continuum, need to demonstrate a top-notch understanding of the domain that buttresses their respective industries.
Primarily, the specific value that domain experts bring is to contextualise the technical components. For instance, given a bunch of data on consumers, it is possible to run various algorithms to segment them in the desired manner. What happens next – such as how best to harvest the information, what ‘sweet-spot offers’ to generate, and the consequent consumer behaviors – all form part of domain knowledge.
The key variable, which keeps leaders occupied as they evaluate the performance of their strategy in delivering long-term business transformation and innovative operating models, is Expertise.
Let us delve into this word’s significance.
Expertise is a set of acquired factors that contribute to success in a domain; ‘success’ in this context points at results that are vastly superior to those obtained by the majority of the population. There is another way to explain ‘expertise’: It is the understanding one has of its domain as a system, to be able to make changes to it more securely and predictably and with fewer side effects.
Simply put, the more detailed a domain’s understanding, the more expertise the organisation has, and the better are its chances to excel. However, the relationship between expertise and value is not straightforward.
A case in point is from the banking industry. The McKinsey Global Banking Annual Review 2019 tries to explain the difference between the 40 percent of the banks that create value and the 60 percent that destroy it – a development observed despite the fact that the online banking usage rates between 2013 and 2018 rose by 13 percentage points. So how did6out of 10 banks miss the plot? The answer, as the report points out, is predictable – due to scale, geography, business model, and differentiation.
In the real world, however, there is another variable: Expertise.
This is how it pans out: Banks that have invested millions of dollars in buying, deploying, and managing their IT assets have unwittingly become IT shops. The result is higher costs, and more resources, often being totally unproductive. This is where niche financial technology companies step in. A deep understanding of the lifecycle of money, and the role of technology players in creating value – Polaris, i-flex, and Maveric to name a few – bring scalable intellectual capital and a transformative solutions mindset.
As more banks and financial organisations embrace digital for competitive advantage, the goal remains the same – ‘provide customers the same experience at every touchpoint.
The domain technology providers following the above-mentioned principles, no doubt, realise that customer value – even though it incorporates elements that make experiences simpler, faster, safer, and more personalised – does not override the fact that each transformation journey is unique.
Appreciation of that nuance is what underscores domain expertise.
Muraleedhar Ramapai is Executive Director, Maveric System