ERP Definition – What is Vertical ERP? What is Horizontal ERP?

by Terry Low on August 30, 2012

Enterprise Resource Planning (ERP) has been redefining many businesses for the past few decades. The 1990s and the early 2000s were considered as the best times for these business solutions as more and more companies realized the need to customize business solutions and find ways to streamline a number of business operations. This was also the time when the job market was flooded with requirements for ‘SAP professionals’ or related candidates who can tackle the ERPs and make it work for the business. For the job market and the businesses in need of a boost, the packaged ERP is more than enough. As long as it can help facilitate and fuse a number of business steps, it was enough and no questions were asked. But did you know that the ERP was the subject of some academic discourse as well by designers and vendors who want to know how to truly position the ERP in the market? So, what is the exact erp definition then? The running discourse up until this time is whether or not ERP is vertical or horizontal. It seems that some observers and sectors are all involved in this discourse on vertical ERP and what is horizontal ERP. The debate rages, but will it ultimately benefit the end user? Here’s a little rundown on what the fuss on vertical and horizontal.

What to expect from vertical ERP?

In the context of business solutions and applications you can say that an ERP is vertical when it specializes on a certain niche or this is what vendors call as a specialist ERP. In the simplest words, you can say that this is the software that you can only use for a particular niche or business. For example you can only adopt this type of ERP for a car dealership or a restaurant franchise. You cannot duplicate this for other business or purposes. You can easily say that this kind of ERP can meet the demands of a particular project or niche.  In part, it can be said that the availability of vertical ERP software is helpful in democratizing the market. With vertical software, vendors can be sure that there will be room for many. Contrast this with the horizontal ERP that has the chance to ‘hold’ and grip the market solidly.

Expect the horizontal ERP to become software that fits all

When you say horizontal software, this means that the software can be used to cover all the processes and operations that one can expect from a business or organization. For example, this is the ERP solution that can cover a wide range of operations or functions from Human Resources to Accounting. You can say that this is the generic ERP software, or as what others say as the ‘one solution that fits all requirements’. Majority of the ERP software are based on this arrangement. At the end of the day, what is the official erp definition probably not that important, but rather the vendor and company will have to talk. The final choice of software will depend on actual needs and specific requirements.



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