Vertical Specialization Works! Here's Why...

Vertical Specialization

I was recently asked about the strength of Dynamics GP in a particular vertical industry. It’s a question that ISVs (Independent Software Vendors) and VARs (Value Added Resellers) get asked quite frequently. Some ERP vendors suggest that they are strong in all vertical industries, while others specialize in only certain industries.

There is a trend in the MS Dynamics channel for ERP vendors to differentiate their products by vertical industries. They feel their product will perform better than their competitors and where they have particular expertise and depth of knowledge. As I have stated in past articles, standard ERP functions such as General Ledger and Accounts Payable are becoming very “commoditized” and offer new ERP customers little to get over-the-top for. But ERP solutions that help streamline and benefit companies in their primary vertical business are becoming more and more in vogue.

Using vertical specialization as our differentiation criteria, we can separate ERP vendors into two categories: those which develop their products to be used more generically across many vertical industries and those which develop their products to focus in specific vertical niches. Each approach has its own advantages and disadvantages. The trick is, as always, to do your homework and evaluate products based on your needs; now and into the future.

 

ERP Vendors

ERP vendors who develop their product from specific verticals tend to have deeper vertical expertise in certain industries. But, like everything else, they may not always to be strong in all aspects of ERP. Vendors who develop their product more generically may not be as vertically strong as others who are industry-specific but yet may have deeper expertise in other ERP functions. For example, vendors who are strong in specific industry verticals may not have the robust reporting or BI functionality that generic ERP vendors can offer. Accordingly, ERP software development will usually come down to their R & D budget and the areas it concentrates its R & D investment in.

This is one of the greatest advantages of Microsoft Dynamics GP. This is a huge competitive advantage Microsoft Dynamics GP has when compared to other ERP solutions.

 

Evaluation

So to evaluate the strength of an ERP solution in a particular vertical, it’s always best to ask about other customers they have in that space. The more customers in a particular vertical industry, the better your chances that it is a correct fit. Their customer base is always the best indicator.

Lastly, as in most of my writings, the devil is in the detail: do your homework and ask questions. Read, research, and leverage the expertise of your VAR. There is NO substitute for due diligence!