ERP News

SMBs see vertical ERP technology vendors meeting specialty needs

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The industry-specific ERP market is thriving, which is good news for SMBs looking to cost-effectively maintain their existing ERP systems with immediate specialty feature upgrades.

SMB ERP system users are constantly faced with difficult choices as technologies advance and pressures mount to be effective while being cost-effective. Stay on premises or migrate to the cloud? Keep the old system with occasional upgrades or go entirely in vogue? Rely on a large ERP vendor or a small specialty software maker?

Specialty ERP technology vendors don’t have the big marketing budgets, massive user bases and mindshare, but they meet a critical need for their users and continue to thrive. Outside their specific verticals, specialty ERP vendors may not be very well-known; their customers typically are SMBs. But these vendors employ multiple strategies such as satisfying specific feature requests and supporting new technologies to keep their customers happy.

Swedish-based ERP technology vendor IFS, for example, develops systems for manufacturing, distribution and asset management. For comparison’s sake, IFS has about 3,500 employees, compared to Oracle’s 138,000 and SAP’s 91,000-plus.

IFS customer Chief Industries is a manufacturing firm based in Grand Island, Neb., and comprises seven different divisions that serve several sectors, including agriculture and construction. The company has been using an IFS ERP system for many facets of its business — from back-office systems, accounting and HR to its shop floor processes for engineering services. IT is centralized to serve all seven divisions.

Vendor responsiveness is key

Chief Industries adopted its specialty ERP system back in 2007 because it believed IFS would “listen to what we need and what we’re looking for and that we could grow along with them,” IT Director Jay Gnuse explained. Through the years, he said, IFS has added about 40 features to its core systems; one of which, for example, consumes consignment inventory by serial number.

But not all companies see the need for a specialty ERP system. KIC Chemicals Inc., a distributor based in New Paltz, N.Y., migrated from an ERP technology focused on distributors to SAP Business One, according to IT Director Lou Paris, due to the SAP’s strong financial system capabilities. The migration took about 10 months and included weekly sessions at the company to examine how the old ERP system handled specific processes and whether SAP provided similar functionality. If not, KIC used a third-party module or developed a customization, Paris said.

The ERP system is running on premises, and Paris said he’s well aware that SAP wants its customers to move to the cloud. Paris isn’t necessarily against the cloud, but he’ll have to be convinced that a cloud-based approach will provide the needed security and redundancy.

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Article Credit: TechTarget

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