Both kinds of ERP are good at what they are built for. The useful question is not which is better in general, but which fits your business. The answer depends far more on your work than on the software.
What each one is
A standard ERP is general business software for processes most companies share: accounts, purchase, sales, inventory, payroll. It is configured for you, and anything unusual is added as customisation.
A domain-specific ERP is built around the processes, terms and rules of one industry. The steps that make that trade different are part of the product from the start.
Six questions to ask yourself
- How much of your daily work is unique to your trade? List the ten things your people do most often. If nearly all are ordinary buying, selling and paying, a standard ERP covers you. If several are specific to your industry, note them.
- Where does your real work live today? If important steps sit in registers, spreadsheets and phone messages because your current software cannot handle them, that is the gap a domain ERP is meant to close.
- What words do your people use? When staff must translate their trade’s terms into generic screens, mistakes follow. Software that speaks their language is easier to adopt.
- Who will keep the books? If you have an accounts team, a standard ERP’s accounting will suit them. If owners and operators record transactions themselves, an ERP that posts the accounting automatically from business actions matters more.
- What will it cost over five years? Add up licences per user per year, implementation, customisation, and the rework that upgrades can cause to customisations. Compare that with a subscription, your own servers, or a one-time purchase.
- Where must your data live? Some businesses are happy on a vendor’s cloud; others need data on their own premises. Check what each option allows.
A simple way to score it
| Question | Points towards a standard ERP | Points towards a domain ERP |
|---|---|---|
| Unique work | Few trade-specific steps | Several core steps specific to your trade |
| Where work lives | Mostly in your current software | Key steps in registers and spreadsheets |
| Words on screen | Generic terms are fine | Trade terms matter to your staff |
| Bookkeeping | Dedicated accounts team | Owners and operators record transactions |
| Cost over five years | Little customisation needed | Heavy customisation would be needed |
| Data location | Vendor cloud is acceptable | Own servers or a choice of hosting needed |
If most of your answers fall in the middle column, a standard ERP is probably the sensible choice. If most fall in the right-hand column, a domain ERP deserves a serious look.
Warning signs, in either direction
- Customisation keeps growing. If a standard ERP needs more and more custom work to handle your core process, you may be paying to build a domain ERP the expensive way.
- The vendor does not know your trade. A “domain” ERP from a team that has never worked in your industry is just custom software with a label.
- Nobody asks about your process. Any vendor, of either kind, who quotes before understanding how your work actually flows is guessing.
If you decide to switch
Whichever way you choose, the move itself decides much of the result. Run the new system alongside the old one for a short period, starting with one location or one process. Bring across opening balances and live records first, and archive the rest. Train the people who enter data, not only the managers who read reports. A phased switch takes a little longer on paper and usually much less time in practice.
Questions to ask any ERP vendor
- Can you show our three most important processes, using our sample data?
- What happens to our customisations when you release an upgrade?
- How is accounting recorded: by an accountant, or automatically from business actions?
- What will we pay each year, and for what, over five years?
- Can we export all our data in open formats, and how do we leave if we need to?
Our honest view
If your business is general trading or services with no special processes, a standard ERP may serve you well, and we will tell you so. Where a trade’s core work does not fit, we build domain ERPs on a proven core, with an accounting engine designed with practising Chartered Accountants, so you pay mainly for what is unique to your business.