Horizontal vs. Vertical Accounting Software

Accounting software  blogger Austin Merritt recently published this article discussing the death of horizontal accounting software.  The premise of the article is that generic accounting solutions are dying out and are being replaced by vertical packages that address the needs of a particular industry.  I agree that businesses are looking for a more integrated, vertical solution.  As the article mentions, Intuit has several industry specific packages for QuickBooks and the other players, like Sage MAS 90, Sage MAS 200, and Sage MAS 500 have released deeper functionality either directly or through third parties that address the specific needs of an industry.  Two examples of this in the Sage world would be JobOps for Sage MAS 90 and 200, that addresses job shop manufacturing needs, and O2 for Sage MAS 500 that addresses the needs of process manufacturers.  I believe that most solutions, especially those in the mid-market, have capabilities that can make the package become a vertical package.  I would add the following comments that may help when looking at a vertical solution.

Some industry specific solutions are very small publishers.  Beware of this.  When you purchase ERP Solutions, you are planning on it being your foundation for many years to come.  You want to make sure the publisher is going to be around.  Having a generic solution, like Sage MAS 90 or Dynamics GP customized to be vertical is preferred because they are backed by giants in the industry.  There are many resellers who can support you.  I talk to people all the time that have chosen to go with a vertical solution that is now unsupported because the publisher went out of business or the “the guy that wrote it” is gone.  Also many of the industry specific packages do not have a good accounting function. I also talk to many people that keep their industry specific solution and purchase Sage MAS 500 to be the accounting system of record.  We integrate the two systems as a service.

·       Make certain that the reseller you are working with truly knows your industry.  Sometimes, generic resellers try to implement vertical solutions and that rarely goes well.  I believe the expertise of the reseller has as much to do with vertical success as the software.  We have taken Sage MAS 500 and Sage MAS 90 and 200 and created vertical packages and customizations that have resulted in many clients in a particular industry.  For instance we have five different clients using MAS 500 in the Concrete Ready Mix field.  Having done these implementations, we now have a deep knowledge of this industry.  We  have integrated to the other software (Command Alkon, Systech, and Jonel) and have written the reports with the metrics that the executives use to make decisions.   

        This is a great article with a lot of good information in it.  My opinion is that it is our jobs as resellers to make the solutions vertical.  We need to apply our years of experience with other clients to produce these solutions that end up being a win/win for us and our clients