Vertical ERP software aims to provide a solution for a particular industry and to maintain well-defined business processes. In other words, it is a laser-focused solution for a very narrow business process. Vertical ERP software designed to provide a simple solution for a user with a specific role (for example; receipt of raw materials in a machine shop, CMS definition, and approval for incoming inspection)
Vertical ERP software is usually more expensive than a horizontal ERP and comes with a tremendous amount of industry-related customizations. Accordingly, it makes an implementation way easier and provides higher ROI since it simplifies business processes. On the other hand, if procedures are not clearly defined and require a material level of flexibility, achieving a significant ROI with a vertical ERP may be challenging. Moreover, the implementation process may become an endless customization hell.
Significant questions that you may need to ask when implementing vertical ERP:
Does the software have an API that allows linking it with other systems?
Can it integrate with Microsoft products (Excel, Word, Outlook)? The ability to export a report to Excel is a must in any business process.
Is there a flexible reporting module in place? Does the system provide a tool that allows end-users to build a simple report by themselves? (For example: sales per product, cost per product, etc.). Are there dashboards or any other DSS tools?
Does the software provide the system admin the ability to customize workflow?
May the software provide a solution for additional verticals that the company may need to implement?
An excellent example of vertical ERP is Infor CloudSuite (Food & Beverage, Automotive, Fashion).
When it comes to horizontal ERP, you may realize that most previously stated issues are not there. If your business is not a flow of tremendously clearly defined business processes, you definitely should consider implementing horizontal ERP rather than vertical. But, on the other hand, horizontal ERP is way more challenging to implement due to its vast range of flexibility, options, and features.
Here are few points that you should consider when implementing a horizontal ERP:
Pick the right partner. Since horizontal ERP is very flexible and has a tremendous amount of implementation flows, hiring an implementation company with a decent portfolio in your industry is more than essential.
Get the right Project Manager on the partner's side. It is crucial. Meet the person, interview him/her as if you would interview your most valuable employee.
Horizontal ERP has something for everyone. It is broad, and it is challenging to narrow. Check if the software can address your specific needs if the functionality you require doesn't ship natively within the base solution.
Examples of horizontal ERP: SAP by Design, Priority ERP, Microsoft Dynamic.