The Wavelength: Vertical Markets

Nothing about 2020 was business as usual, and that includes vertical markets. What changed and where do new opportunities lie? Our panel of experts weighs in.

Erica Calise, Ron Cameron, Scott Dabice, Chris Huff, Bruce Orcutt

Which vertical markets do you feel offer the most attractive opportunities?

Ron Cameron: We find a lot of attractive opportunities in manufacturing, financial services, and state and local governments. These vertical markets must manage and process consistently high volumes of documents, especially in their finance and HR departments. For state and local governments, the use cases are typically central administration and citizen services such as public transit, housing and HHS. We’ve also unearthed great opportunities in the education segment because these institutions have transactional content management needs for managing the admissions and enrollment process. Other areas of opportunity include the transportation/logistics segment, where shipping and receiving can generate a lot of paper flow.

Bruce Orcutt: Markets that are content-centric and process reliant are very attractive for us. These include financial services, insurance, supply chain and logistics, and healthcare — markets that, by their nature, tend to still be manually driven and are ripe for digital transformation. 

What are some of the more complicated vertical markets that you are active in and why?

Erica Calise: The demand of distance learning has impacted the education market over this past year. Both K-12 and higher education institutions are looking for ways to combat the digital divide, as well as drive cost down and increase a student’s access to learning.  Further, the decentralized purchasing model characterized by large colleges and universities makes navigating the different layers within the system challenging – there are multiple IT departments and decision makers.

In the healthcare market, group purchasing organizations (GPOs) have driven hardware and service costs so low that OEMs are hesitant to target it. In addition, navigating the different layers within healthcare systems can be daunting. Typically, this vertical is approached by more experienced sales reps who feel comfortable discussing technology specific to healthcare.

Cameron: As a provider of content automation solutions, we help organizations capture, process, and manage their most critical documents. Some vertical markets have strict regulatory mandates about how documents and records are managed, secured, stored, archived and disposed of. Heavily regulated sectors such as financial services, government and transportation are typically the most complicated vertical markets we operate in.

Scott Dabice: One of the more complicated vertical markets is healthcare, primarily because its business model changed drastically in the last year, and data became critically important in terms of managing COVID-19 case counts and handling testing variance. The industry was forced quite quickly to explore new, secure digital routes of sharing confidential information when their traditional paper-based way of managing patients’ information was no longer feasible during stay-at-home orders. We now offer patient information management solutions to better manage patients’ experiences and information from intake through insurance payment and all the steps in between, with patient care and new recording guidelines that came out with COVID. The nature of the pandemic also forced us to be more creative inclusive of and beyond print. Our offerings had to focus more on customer and employee health and safety, and how to get patients in and out of medical centers safely using things like signage and lockers for PPE that were not necessary in the past.

Finance, banking and insurance are also challenging industries because, historically, people in these markets work onsite in corporate offices where data security is paramount. With the onset of the pandemic, work shifted to remote and hybrid office environments, and we needed to deploy our solutions so they could be accessed from anywhere, effectively, efficiently and securely. 

Orcutt: Markets where the customer experience is most volatile can be complicated, and that is why organizations are looking to us to provide digital intelligence into how their processes, content and people are coalescing. Financial services, for example, gained significant competition from non-traditional banks during the pandemic that are giving consumers more flexible options for banking. Agile, frictionless onboarding and transacting is mandatory.  Also, complexity stems from not having perceived control of processes, not having access to critical information, and not being able to monitor, communicate, respond, or anticipate bottlenecks in real time. This is especially prevalent in the supply chain and in transportation and logistics where organizations are dependent on vendors, partners, drivers, dock workers and evolving regulations that impact frontline and back-end workers. 

Have you gained entry to a vertical market unexpectedly? How?

Orcutt: We’ve had very notable success within government agencies, an industry that has traditionally been viewed as being slow to change. Like all markets, the pandemic accelerated decisions to incorporate AI technologies that augmented their human workforce. The California DMV, for example, leveraged our solutions to maintain the flow of RealID application processing remotely and eliminate lines when they reopened. Also, we were instrumental to the U.S. FDA for processing public health records during a time their staff was overwhelmed with fast-tracking vaccine approval. Our network of partners was a key component to getting our solutions to vertical markets. 

How has the year of COVID impacted your vertical market approaches?

Calise: Access to decision makers and key influencers has been significantly impacted by fluctuating lockdowns. As a result, the virtual approach, be it one-on-one, webinar-based or via industry virtual events has become more important than ever before. This shift has forced us to be more succinct, and ready to provide the best “elevator pitch” ever. We have developed strategic, targeted messaging to aid our sales teams in the process – Value of Contract selling webinars, industry specific infographics and best practices for holding virtual meetings to name a few.

Cameron: COVID hasn’t really impacted our approach to the vertical markets we serve, but it has accelerated digital transformation initiatives for our customers across all vertical segments. It put the strengths and weaknesses of today’s information systems in the spotlight, forcing businesses in all vertical markets to react, share information, and make consequential decisions much faster and on a much wider scale than ever before. Documents and the data they contain must be available to employees wherever they are. Information agility has become critical, and organizations have had to turn on a dime to deploy cloud solutions and empower remote teams with enterprise-class tools. Communication, collaboration, and content must flow seamlessly for dispersed employees.

Chris Huff: Digital transformation is the number one investment thesis for boards and management teams across all verticals. The verticals that invested heavily in digital transformation pre-COVID are reaping the benefits and finding themselves better equipped for the post-COVID digital economy, where automation and AI are hallmarks of personalized customer experiences and operational efficiency. Verticals such as logistics and telecom that didn’t invest heavily in digital transformation are finding this an opportunity to outmaneuver competitors by leapfrogging early automation point solution investments such as RPA and buying directly into powerful, integrated intelligent automation platforms. 

What are some of the biggest challenges in the healthcare vertical?

Calise: Accessibility to the decision maker within the healthcare vertical has been a challenge. This is a different industry with very different rules of engagement compared to the education or government marketplace. Once engaged, the challenge continues – the manufacturer must have the ability to be nimble and easily respond to the demands of healthcare IT administrators. As well, national service support expectations can be problematic. It is not unusual for a healthcare institution to require 24/7 service coverage at extremely low negotiated rates.

Dabice: We had to pivot with the healthcare entities to introduce a lighter-touch or no-touch system into a very hands-on environment and we needed to help them digitize information very quickly with the onset of the pandemic. Healthcare institutions have been on a very methodical path toward digital transformation that was accelerated this past year. Whereas in the past, a lot of time was spent turning paper documents into digital information, now it’s about turning processes into digital workflows, and the offsite capabilities that support these needs.

The biggest challenge was getting the right attention on and dollars invested in these requirements during a very trying time. Healthcare entities knew they needed the improved outcomes associated with digitization, but the path to get to those improved outcomes took a back seat to everything else that they were working on. We had to take creative steps to leverage their current infrastructure to free up the dollars to invest in some of those key critical components to help them make that important transition. We also put in a lot of effort working with new and different departments within hospitals that suddenly had needs that we could solve with digitization — things like patient information management, insurance claims and government reporting. We were able to quickly provide a solution in these areas to help them adapt and adopt technologies that go far beyond the workflow involved in scanning a page into a system, which is where their focus was previously. 

Orcutt: The healthcare industry is facing challenges from many fronts; the supply chain,  for instance, where the vaccine supply is limited and it’s necessary to record and track distribution. This impacts the speed at which COVID-19 tests, medicines and vaccines are accessible. Financial stability is also a challenge. Healthcare organizations need to reduce readmission rates and strategize for revenue recovery post-COVID. There are also new care delivery models with virtual home care and virtual visits needing to be incorporated into processes.

Then there’s the impact to talent and staffing. Staffing shortages due to remote work, social distancing and diminished budgets are impacting patient outcomes and operational efficiency. This opens the door for RPA to automate manual tasks, but healthcare organizations need to learn from enterprise’s failure with RPA. They need to incorporate process mining to identify which processes are best for automation and know what the expected benefits will be.  

Is the strategy of vertical marketing truly actionable or is it just hype?

Calise: A vertical marketing strategy is truly actionable, and to a certain degree imperative if a manufacturer wants to be successful in the education, government, and healthcare markets. Sensitivity and awareness of a vertical market customer’s needs leads to improved trust and confidence on the part of the purchasing entity. As well, the talk track and process are repeatable which enables sales teams to build upon success. For example, school district IT decision makers talk to one another. If one school district has found a solution that satisfies its requirements and leads to money savings, their IT executive will share that success with others, thus potentially building a pipeline for future opportunity. This is very much a reference-based industry.

Huff: Vertical marketing is real and has major advantages when executed effectively. First, business leaders for the most part seek to drive growth and profitability. This balance requires a keen eye toward mitigating operational risk. Part of mitigating risk includes understanding where innovation has been done and done well. Vertical marketing allows vendors to leverage high-value wins for one customer by sharing the “blueprint for success” with newer customers to accelerate their success. Second, when marketing to a specific vertical we’re able to build reusable solutions and assets addressing specific business problems, improving speed-to-market for us and speed-to-value for our customers. Vertical marketing is real but requires a coordinated action plan involving sales execution to drive positive results.

Where are you seeing the most growth?

Calise: Expansion of product offering in the education vertical has proven to be successful for us. Collaboration and distance learning has lead to greater adoption of interactive displays. In addition, we are focused on healthcare GPO contract opportunities. This vertical is unique in that it has not and will not close as a result of COVID. There is vast opportunity in healthcare and our diverse product offering, ranging from copiers to displays to thermal scanners, provides an excellent solution for this vertical. 

Dabice: We’re seeing growth in a number of areas. Our biggest advantage is that we’ve been building toward our digital services transformation for several years now, so we’re well prepared to identify opportunities to help customers across many industries. None of these changes were surprising in terms of where we were going, but the speed of implementation was surprising, and it was fueled by necessity with the onset of the global pandemic. What we were planning for in the next two to three years, became the next two to three days or two to three weeks, at most. All of that happened quickly and we’re building on it as we go forward; it’s not going back to where we were before. The new normal will be very much the new normal we had envisioned; it’s just arriving a little earlier than we anticipated. The pandemic merely accelerated how quickly we got there and how receptive our customers were to it.

Huff: Growth in digital transformation is being driven less from specific verticals and more from customer personas struggling to manage a complex environment comprised of the legacy systems of yesterday, and the modern solutions of today. This customer persona spans all verticals and is more relevant to those large companies that have been around for many decades, and have a variety of IT investments that must be modernized to compete in the digital age. IDC measures the digital transformation market at $7.1T over the next three years. To connect these various disparate data, systems and people requires an orchestration workflow engine connecting into various applications and running in a hybrid multi-cloud environment. McKinsey and Deloitte contend automation-at-scale requires three core technologies: business process management, robotic process automation (RPA), and optical character recognition (OCR). Integrated intelligent automation platforms including these three technologies offer companies the ability to rapidly gain a competitive advantage by digitizing mission-critical workflows within complex environments. Companies are now able to create a modern veneer on top of legacy infrastructure to compete in the digital and experience economy while buying themselves time to modernize the underlying infrastructure. To achieve this outcome, we’re seeing boards and management teams increasingly allocate substantial digital transformation budgets to add business speed, agility and resiliency.