Industry-Specific vs. Generic ERP in the Postmodern ERP World

At one point or another, you probably have or will ask yourself, “Should I invest in an industry-specific ERP solution, or in a flexible, “generic” ERP solution?”  You’re not alone.  In fact, this debate has been raging for decades.  But as we usher in a new era of technological innovation, Enterprise Resource Planning (ERP) solutions have morphed into what Gartner has dubbed “Postmodern ERP.” Since ERP solutions and strategies have changed, it’s time to change the industry-specific vs. generic ERP debate as well.

Postmodern ERP is a hybrid of the best-in-breed approach to business management applications and the modern ERP-suite approach.  In our blog post, “Painting the Picture for Postmodern ERP” we discussed that Postmodern ERP gets its name from its similarities to the postmodern art movement, in that it rejects and deconstructs the “modern” approach that came before it.

But what caused the shift away from the modern ERP MegaSuite and to postmodernism?  Disruptive technologies like the Cloud, Application Programming Interfaces (APIs), and the adoption of the Software as a Service (SaaS) model.  These developments made it possible for businesses to affordably invest in highly specialized, and sometimes industry-specific applications that are flexible enough to appropriately integrate with one another.  This could have easily lead to a return to the best-in-breed approach, but ERP vendors began to utilize these same technologies to create a hybrid approach.   Vendors began to re-architect their solutions into a core set of applications that can serve as a system-of-record with differentiating processes and activities complemented with pre-configured or API enabled integrations.

the evolution of ERP to Postmodern ERP

Postmodern ERP solutions are deconstructed into personalized sets of integrated business functions.  Like the best-in-breed approach, the goal is to use the best applications possible in each area of a business.  However, like the modern suite-approach, the applications must integrate with each other (as tightly or loosely as necessary) to preserve data integrity.  The inherent flexibility of this approach allows each business to customize their system, and the agility to quickly make changes as needed.

This means that there is no one-size-fits-all approach to postmodern ERP.  Two organizations within the same industry could both implement strategies that are postmodern in nature and yet wildly different.  That’s because each organization is different, and must define its own postmodern strategy according to its operations, unique needs, budget, and future goals.

Now that we’ve covered how ERP has changed, let’s dig into the specifics of how the Industry-Specific vs Flexible and “Generic” ERP debate has been affected by these changes.

The Argument for Industry Specific ERP

Out of the Box Functionality

Industry-specific solutions are built to offer comprehensive functionality for a niche market and so have a much shorter time to value.  Industry-specific solutions typically have more applicable functionality because they have been designed around definite requirements and a deep understanding of industry-specific processes.

Choosing a generic solution forces your business to adapt to certain industry-specific processes in order to conform to a one-size-fits-all structure rather than implementing a solution built with industry best practices in mind.  Some generic solutions can be customized to facilitate industry-specific functions, but customizations can be costly, time-consuming, and often result in inflexible “solutions” that barely get the job done and can’t adapt when processes change.

The Argument for “Generic” ERP

Functionality is Fine, But Platform Matters Most in the Postmodern Multi-Cloud World

A “generic” ERP will likely need some sort of customization or add-on to meet the requirements of virtually any business. HOWEVER (and this is a big however), postmodern ERP is agile by nature and flexible enough for various easy customizations and both preconfigured and API integrations.

Modern ERP-suites were monolithic in nature, and required costly customizations, meaning that industry-specific solutions clearly had the upper-hand for process-centric businesses.  In the postmodern multi-cloud world, ERP solutions provide core functionalities and serve as a system-of-record for a collection of applications that can deliver industry-specific or general functionality depending on your business needs.

And the Winner is…

Just like there is no one-size-fits-all approach to postmodern ERP, there is no clear winner in this debate.  Every business will have different operational needs, administrative needs, expectations, and goals and every industry has different regulatory needs and best practices. However, by fully embracing the inherent flexibility of postmodern platforms, your business no longer needs to choose between industry-specific functionality and state-of-the-art technology.   As a hybrid of the best-in-breed and suite-based philosophies, postmodern ERP offers the best of both worlds in regards to functionality and agility.

To learn more about Postmodern ERP and how it can benefit your business, download our free eBook!

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