In a tightly regulated industry where the stakes are sky high, itвЂ™s understandable that firms would prefer an established firm over an untested upstart.Д«ut when it comes to the actual job of launching a new business model, do these numbers matter? On paper, staff numbers, office locations, and annual revenue are important, because theyвЂ™re the mark of a financially viable, trustworthy company. This is because reports tend to rank on criteria that make sense from a supply side perspective rather than the demand side. More significantly, even where the economic hurdle can be overcome, vendors may still be let down by the methodology. Right off the bat, this creates an economic barrier for smaller vendors. The way enterprise software analysis is currently done has two major flaws.ДЇor starters, many reports are directly or indirectly pay to play. So, their reports give importance to the criteria procurement teams look for, even though these arenвЂ™t necessarily the criteria that matter.ДЄnd the cycle continues. At the same time, the businesses who evaluate enterprise software need to appeal to the enterprise buyer.

Procurement teamsвЂ™ requirements are rooted in supply-side economies of scale. The result is that firms tend to approach vendor selection in an anachronistic way. But the business models underpinning most firms have remained largely unchanged, in that theyвЂ™re still predicated on mass production. And Covid-19 has only made the need for it more pressing. If individual consumers are embracing their newfound power and demanding more tailored experiences, enterprise clients - particularly in the financial services space - are yet to smell the (small batch roast) coffee.Дigital transformation has been one of the financial services industryвЂ™s top priorities for several years. On the contrary, they now expect to be treated as individuals, and will vote with their feet if their needs arenвЂ™t met. Mass consumerism is falling out of favour because, with supply abundant, customers donвЂ™t have to settle for a limited selection of highly standardized products or services in exchange for affordability. This shift from supply-side to demand-side economies of scale has far-reaching implications. Instead, itвЂ™s now demand - or, more specifically, customersвЂ™ attention span - thatвЂ™s in short supply. Even where creating economies of scale isnвЂ™t feasible, the proliferation of as-a-service tools means you can borrow them at a reasonable cost. Supply is no longer an issue because, most of the time, sourcing, distribution, or both can be digitized. If the industrial revolution solved the problem of supply and made economies of scale possible, the digital revolution is turning the supply-demand equation on its head. But its more significant - and often overlooked - consequence is that business models are also changing. When we talk about digitization, we invariably focus on technology itself, specifically how far it has advanced. HereвЂ™s why we think enterprise software analysis is broken and a look at how a new approach would produce radically better results. WeвЂ™ve written a report explaining in detail how wealth management is changing as a result of digitization and, as part of the report, we launch The Market Map, a new criteria for evaluating software solutions in the digital age. WeвЂ™re now moving into a new phase where, now digitized, financial products are going to be more and more embedded into other services вЂ“ either tightly, like payments within the Uber app, or just bundled together for convenience like in super apps.Д«ut while the industry is undergoing this paradigm shift, the way we evaluate the enterprise software on which it runs remains unchanged.ДЄt best, the conventional analysis is becoming increasingly irrelevant but, at worse, it is steering decision makers towards systems that are not fit to address their changing needs. Who still uses their high street bank for FX payments or for buying stocks? And then the services and service providers started to change. It started with digital distribution of existing services. When was the last time you went into a branch (even pre-COVID)? Or the last time you paid for something in cash?ДЇinancial services have been gradually digitizing for years.

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