Differences between generic and industry-specific ERP systems.
Enterprise Resource Planning (ERP) software is a one-stop solution for your business. It helps you manage various business applications — including finance, manufacturing, sales, marketing, human resource, vendor/supplier/distributor management, etc. According to your requirement, there are two kinds of ERP systems, namely, generic ERP systems and Industry-specific systems.
This article sheds light on how to differentiate between the two.
What is a generic ERP system — benefits and drawbacks?
A generic ERP system is a bunch of software bundles that take care of all your business functions. As described in the opening paragraph, it manages from manufacturing to finance and human resource to sales. It is perfect for companies that are just starting and require help with all business modules. The most significant advantage of having a generic ERP system is that it is less expensive and provides control over all business functions. In the initial stage, businesses aren’t very fluid when it comes to making expenditures. They also lack a competent IT team that can reconfigure the ERP system now and then. The company also lacks funds for installing new software and updating the existing ones. Hence, having a generic ERP system that is easy to manage, is inexpensive, and can be operated by people who lack rigorous training in Information technology is a boon for any company, especially those who are just starting.
But there are some drawbacks as well. Generic ERP systems aren’t good at handling operations specific to your business. for example, you run a manufacturing business. Suppose you have a generic ERP system installed on your premises. In that case, you will only execute generic functions such as the automatic conversion of raw materials into finished products. But that’s it. Nothing more. On the contrary, industry-specific ERP systems provide a bouquet of features that help you with several other functions. The next section discusses it in depth.
What is an industry-specific ERP system — benefits and drawbacks?
Unlike generic ERP systems, industry-specific ERP systems allow executing special functions — functions that are specific to your industry only. Let’s understand this with the help of the above example. Consider that you are a manufacturing company that produces bicycles. A generic ERP system will only help you provide essential services like mixing raw materials — Steel, Aluminum, Titanium, and Carbon Fiber — and producing a working bicycle. As a manufacturer, you know that there is much to it.
An industry-specific ERP system will allow you to handle other important business functions as well. For example, it will help you manage the inventory. As soon as the raw materials level goes below the set threshold, the industry-specific ERP system places an order with the vendor. All of this is done automatically without any human intervention. Thus, your workforce can focus on functions that require human ingenuity.
Moreover, it also monitors the warehouse and keeps note of where the different kinds of bicycles — Road bikes, Mountain bikes, Cyclocross bikes, Folding bikes, etc. — are kept. This helps while handing over the bicycles to different vendors as per their needs.
Industry-specific ERP systems also support drones. Recently, drones have gained wide popularity as they help deliver products extremely fast, thereby providing a significant advantage to supply chain companies.
The drawback of industry-specific ERP systems is that they may be expensive for small companies. If you have begun your operations recently, then you should avoid using industry-specific ERP systems. Instead, start with a generic ERP system and slowly and steadily, as your profits increase, go for an industry-specific ERP system that is tailored for your needs.
Generic ERP systems are an excellent way to start with. They introduce automaticity into business processes that enable your workforce to focus on things that require intellect and ingenuity. But as you grow and as your demands increase, you should go for an industry-specific ERP system to manage your day-to-day operations.
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