You may have more than a few justifications for needing an ERP system, but with so many possibilities, how do you make the right choice? If you’re questioning whether a generic or an industry-specific ERP system is the best fit, or how to start the ERP selection process, you’re not alone.
While a generic software comes a bit cheaper and has been labeled as a “one-size-fits-all” solution, an industry-specific solution can be quite the investment but offers all of features and functions to meet your unique business requirements.
To learn more about ERP software and the benefits it offers, see our blog, The Basics of ERP . In this blog, we’ll discuss the differences, and benefits of generic and industry-specific ERP systems with regards to your business requirements.
ERP or an enterprise resource planning system is a core business software solution which stores data and integrates daily business functions and departments across a company.
A generic ERP system is a universal software solution that offers various features and functions for a broad-spectrum of industries. Typically, these systems speak to basic processes such as accounting, inventory, sales, purchasing, human resources, marketing, and customer relationship management.
There are several advantages to a generic ERP, most importantly, they’re cost effective. Since these solutions are a ready to use right out of the box, the one-size-fits-all solution requires users to make very minimal adjustments to the software settings. It’s suitable option for someone who doesn’t operate in a particular niche market and is looking to implement an ERP software in a timely manner while watching their budget.
While an out-of-the-box solution may sound great for some, the solution may be too limited for others. Generic systems offer very limited features and functions for specialized industries such as manufacturing and distribution companies. To perform daily business processes, these industries require various modifications, customizations, integrations, and add-ons. These special requirements considerably increase the costs and risks associated with a generic ERP system. The generic ERP solution can’t keep up with manufacturing and distribution companies who are hunting for a solution to help them remain compliant with industry-specific standards and account for gaps in knowledge.
Comparable to a generic ERP, an industry-specific ERP software provides all of the same essential functions for accounting, sales, purchasing, human resources, and customer relationship management. But these systems go above and beyond the basic tools of a generic ERP by extending functions and features, customized to meet the specific daily business process needs of a particular industry. Industry-specific systems don’t require customizations to meet your needs.
There are many advantages of an industry-specific ERP but let’s take a quick look into the benefits for a manufacturing company. As stated in an example written by Caitlin O’Donnell from datacor, a production planner could utilize integrated batch scheduling functionality to assist them in planning and scheduling product production. To perform the same task using a generic software, you would need to integrate a third-party software product – or design, develop, test, and implement a costly add-on or custom module.
However, an industry-specific solution may not be the right remedy for someone who is looking to save money and is willing to settle for the basic functionalities of a generic ERP system.
| Generic ERP Software | Industry-Specific ERP Software | |
| Customization | Generic ERP systems often require customization which often consumes time, increases cost, and risks. | Industry-specific ERP often don’t require much, if any, customization. |
| Functionality & Features | Generic ERP systems offer companies the same solutions regardless of the industry. | Industry-specific systems are capable of providing brands with unique tech solutions that can give them an edge over competitors. |
| Implementation | Can be handled by external professionals. | Need partners involved in the processes. |
| Vendor’s Industry Knowledge | A vendor of a generic ERP possibly doesn’t have the necessary knowledge of how to work optimally within a given industry, and the help of outside experts may need to be sorted. | Vendors of industry-specific ERP systems have often specialized in specific industries. Therefore, they have a good understanding of an organization’s needs and can offer advice to satisfy unique industry requirements. |
| Modules | Simple out of the box modules. | Complex modules for complex processes. |
| Costs | Less costly. | More expensive. |
| Maintenance & Development | Further development relies on input and needs from one single company. Description of new functionality, development, testing, re-testing, and implementation… it can be a long process. And who knows how it has been coded and documented. | If it is an industry solution, it will be further developed by the vendor. Multiple companies carry the cost of further development since they all use the same solution. |
Implementing an ERP software is stressful, but let’s make the process easier by first deciding whether a generic ERP solution or an industry-specific ERP solution will best fit your needs and requirements. Strategically evaluate your daily business processes to determine which system will provide you with not only the basic functions, but the specialized capabilities that will help your business simplify processes, improve operations, and grow both productivity and profits.
For some, the industry-specific ERP solution may be the right fit to save time and money for the development, maintenance, and support of their new solution. While others may find that the generic ERP solution better serves their current needs, goals, and processes.
The best place to begin with selecting and ERP software is with a discovery call. Contact the ACC team to determine whether a generic ERP or an industry-specific ERP system is the best fit for your business.
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