BINUS Business School

Is domain expertise the key to success?


Written by Krishna Karedla and Sevenpri Candra

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:

  1. Acquire domain knowledge
  2. Develop code for specific orders and creating a codebase which can be reused.
  3. Train personnel who are conversant with your chosen domain
  4. Create a website and use cases which are tuned to your domain
  5. 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.

domain expertise leads to core competency which can be transformed to 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

Full article is here – Domain Expertise




Sevenpri Candra