ERP vertical Vs horizontal: Key difference & similarity

When people like to enter professional life, then they come to take away out of two either business or service. Though most people like to go for service as service does not provide much more hassle, business means a lot of work including a burden. Suppose if you like to start a business, you need to look after the company’s financial part, supply chain, commerce, manufacturing, human resource, operations, and many more.

But nowadays, business organizers will have a facility for business-related works through software, and they no need to appoint a lot of workers. It is good to know that nowadays, business work comes fruitfully with the help of ERP (Enterprise Resource Planning). Before going to brief detail about ERP Vertical Vs Horizontal, let’s check quick points that describe differences between both ERPs.

Quick Overview – ERP Vertical vs Horizontal

Vertical ERPHorizontal ERP
Vertical ERP works for a well-defined business.Horizontal ERP works for an unwell-defined business.
Vertical ERP comes with an easy solution.Horizontal ERP comes with a challenging implementation.
Vertical ERP works for a receipt for raw materials.Horizontal ERP is the best for any type of business.
Vertical ERP runs with limited features & options.Horizontal ERP has vast flexibility with multiple features and options.
Vertical ERP comes with multi-functionality.Horizontal ERP is facilitated with no more systems than Vertical ERP
ERP Vertical vs Horizontal

What is ERP?

ERP comes with the full form of enterprise resource planning. This software manages the company’s financials, commerce, supply chain, human resource activities, and operations. It comes vertical and horizontal. To know the details of ERP, organizers need to know ERP vertical vs horizontal. 

How does ERP come to work to justify ERP vertical vs horizontal

ERP system was monolithic suites and they worked separately. Each system needs expensive, complex, and customized code for unique business requirements or even it comes with new technology or optimization.

Today ERP is different than the previous time as it brings new processes with tables together in one fluid system. Under the software, productivity tools, e-commerce, and customer management solution allow you to connect all data for better insights.
In addition, modern ERP solution brings flexible deployment options, low code optimization, security and privacy, and sustainability. It will bring continuity and resiliency into your business. Either benefit of vertical ERP or horizontal that depends on ERP vertical vs horizontal.

Benefit of ERP

Though the benefit of ERP is not mandatory to have complete knowledge of ERP vertical vs horizontal, it will help you to get a primary knowledge of how ERP vertical or horizontal works for the business.

An ERP goes with front and back-office operations with a single program. It provides a real-time view of business performance through an operation. An effective ERP system can provide immediate access in need of crucial information about the business with a holistic view of business operations. This comes with a competitive advantage in today’s business environment. According to the work system and benefit for performance in business, ERP comes with two categories. Take a look at the details of ERP mentioned below.

What is Vertical ERP?

Vertical ERP software provides a solution for a particular industry. It works effectively in well-defined business. It also gives a laser-focused solution in need of a very narrow business process. Vertical ERP software is designed in need of a simple solution for users with a specific role. For example, it goes for receipt of raw materials in a machine shop, inspection approval, and CMS definition.

This software is more expensive than horizontal ERP and goes with a tremendous amount of industry-based customizations. It brings an easier way for implementation and provides higher ROI as it simplifies the business. Vertical ERP may come challenging and it requires a material level of flexibility.

If you like to use vertical ERP in your business, you need to consider some points in your mind. Go through the points mentioned below. 

  • Does vertical ERP has an API that allows linking it with the other system?
  • Can it integrate with Excel, word, and outlook?
  • Can be a flexible reporting module in place? 
  • Does the system give a tool that allows end-users to make a simple report? For example, sales per product or cost per product. 
  • Does the system have dashboards or any other DSS tools?
  • Does the software come with the system admin to customize workflow?

Vertical attributes for the ERP system

  • Manufacturing 
  • Distribution 
  • Retail
  • Professional Services
  • Aerospace and Defense
  • Government organization
  • Non-Profit Organizations
  • Education
  • Healthcare
  • Transportation
  • Utilities
  • Construction and Real Estate
  • Financial Services
  • Hospital Industry
  • Mining
  • Agriculture

What is horizontal ERP under process of ERP vertical vs horizontal?

In horizontal ERP, you may realize that here you will not get most previously stated issues. If your business does not have a clearly defined business process, you surely need to consider implementing a horizontal ERP than a vertical one. On the other hand, horizontal ERP is more challenging for implementation due to its vast flexibility, features, and options. 

According to benefit of business performance, horizontal comes with different types of horizontal ERP. To know the details of horizontal ERP type and have a clear picture regarding ERP vertical vs horizontal, just come to the points. 

Types of horizontal ERP

It is sorry to say that there is no division of horizontal ERP, It is only one and it works uniquely for the good of the business. If you consider implementing a horizontal ERP, you should consider a few points mentioned below. Just take a look.

  • Pick the best partner – Horizontal ERP is flexible and has an extreme level of implementation flows. For that, hiring an implementation company with a decent portfolio in the industry is more essential.
  • Get the right Project Manager – Get in touch with the right project manager on the partner’s side but it is very crucial. To make the process easy, you need to meet the person, take an interview for the person as a most valuable employee.
  • The software will tell you specific needs if your requirement regarding functionality does not touch within the base solution.

Horizontal attributes of the ERP system

  • Finance
  • Sales and marketing
  • Human Resource
  • Supply Chain
  • Operation

ERP Vertical vs Horizontal in a food manufacturing company

If you come to build a food manufacturing company, you should consider how the technology comes to reduce cost or to increase productivity. Even the technology can deliver compliance traceability, automation, and performance for food products, real-time information, and performance for food products. Many food manufacturers come to use unique and complex environments either micro or macro environments.

It is good to know that most of the food manufacturers are in dilemma in the matter of ERP vertical vs horizontal placement. The thing is that this is the right approach under the supervision of the software vendor.

Leading ERP Vendors

A good number of blue chips Software companies such as Microsoft Dynamics 365, Oracle or SAP come with an offer for one product that provides services for many industries. The main benefit comes that they are designed with huge functional and powerful products and the products can be deployed with structured support and based on a consultancy network. It will come with much functionality with many departments in many businesses such as sales, accounts, finance, and warehousing.

But many food manufacturers, who have processed food businesses with complex operational systems, face difficulty to mould and flexing the system to collect the information and get the details regarding business growth and profitability. It can bring higher costs from the side of the owner.

The vertical ERP runs with specialization to a few specific sectors that will share common processes. The application is designed with rich-tacit knowledge and will have deep sector-specific functionality. The software is the best one for food manufacturers that have complicated shop-floor or product-related businesses because this application will have the functionality needed to meet specific requirements with 360 degrees solution. The landscape of this ERP is always involved in industries that are not traditionally focused on the business such as food. But horizontal ERP comes often with huge capability and support networks but any time it can come to fall if there is high complexity. Vertical ERP is normally a better fit but needs to give offer progressive business aspirations, product development, and support in need of manufacturing growth and future demands.

Bottom line

If you like to put your business at a level of needing ERP, it can come to be risky for Verticalize as you may not have suitable control and visibility into the financials. Even it seems better choice initially as the business grows with some critical limitations either accounting or reporting.

But horizontal ERP comes with the best advantage. Here you can have a solid foundation of robust accounting tools with functionality. Every business is unique and both horizontal and vertical ERP have their strength and weakness. So go through the details of ERP vertical vs horizontal and take the right decision for your business.

Related article

Leave a Comment

Your email address will not be published.