The difference between horizontal and vertical business systems

 By: Lotfi AlSarori

Technology is revolutionizing our way of life. As organizations and businesses are depending more and more on digital solutions, plenty of software are rising to help with businesses of all sectors and divisions. This is why it's important to know some business systems out there to help determine which ones are ideal for your organization.

Here is a comparison of horizontal business systems and vertical business systems. 

Horizontal Business Software

Business systems that serve common enterprise functions that are shared among several industries are called horizontal systems. Examples of these are systems for managing financial and accounting, human resources, or marketing activities. 

Here are some of the most popular horizontal business software systems.  

ERP

Enterprise Resource Planning (ERP) Software is used to manage most of the company’s processes. It comprises of systems for managing the different functional areas in the organization, such as finance & accounting, HR, and supply chain. These systems are all integrated to work together to provide one coherent and optimal operations. ERP systems sit at the core of an organization where most, if not all, business systems and software in the enterprise connect to them to provide a cohesive business flow.     

Customer Management 

Customer-focused systems are those that are used to manage all business interactions with customers. The most common customer management systems are Customer Relationship Management (CRM) systems. CRM software, aka operational CRM, is used to automate the sales process, marketing activities, and support operations. Other customer-oriented software includes systems for customer care, customer experience management, customer feedback management, and customer insight management.  

Document Management

A Document Management System (DMS) is used to archive, share, and manage all sorts of documents in an enterprise. Such systems are usually integrated with other systems in the organization, such as HR and finance, to manage the documents used and processed within those systems. DMS software usually come with handy features to facilitate working with all sorts of files. Some of these features include versioning, file compression, and high-level of document and system security. 

Workflow & BPM Systems

The daily activities within organizations are usually ran using a set of predefined business processes and procedures. These procedures can be executed manually or be automated using a software system. Workflow and BPM (Business Process Management) software provides companies with the ability to automate any type of procedure. These are easy-to-use systems that can quickly be configured to define an organization’s processes to be automated and enjoy the benefits or digitalization.  Besides the obvious pros of having a software system such as easy backup, sharing, and collaboration, workflow and BPM software allows enterprise to easily and quickly optimize their business processes once they are automated.    

Reporting & BI

Business decisions rely on information. Organizations create tons of data every day which is processed into what could be an overwhelming amount of business information. For such information to be useful in making daily business decisions swiftly, it needs to be readily available in an easy-to-read format. Dashboarding and reporting software are tools used to present information in various formats, such as tables, charts, graphs, etc. to make it easier to read and understand. Business Intelligence (BI) software takes it a step further by analyzing the information to provide actionable intelligence for decision-makers.    

One thing that’s worth mentioning here is that while these are considered horizontal systems spanning several industries, there can be sometimes certain levels of customization for some of these systems as per certain industry requirements to make the system more applicable for that industry.    

Common horizontal enterprise systems

Vertical Software Systems

If a business system can only be used for a specific industry sector, then it is referred to as “vertical software”. Vertical systems are those suitable for a specific industry. Vertical software is used in every industry sector today. These are systems that were designed and built specifically for a certain industry. Some of the most common industries that are benefiting greatly from today’s IT revolution include: Banking, Telecom, Insurance, Healthcare, and Education. 

Examples of vertical systems in some industries

Insurance

Insurance companies can specialize to offer Property & Casualty (i.e. General), Life, Medical, Credit, or Travel. Composite insurance companies are those that offer more than one type of insurance.  Insurance Management Systems are offered for all types of insurance companies. Insurance software comes in various types as well. Policy Administration Systems (PAS) are used to issue and administer all tasks related to an insurance policy. Claims Management Systems are used to accept, analyze, adjudicate, and process all types of insurance claims. 

Telecom

Communications Service Providers, including Telecom Operators, run on a multitude of software systems. Business Software in Telecom are usually classified into Business Support Systems (BSS) and Operations Support Systems (OSS). Software for BSS is focused on processes that are directly related to the customers including product management, order management, customer management, and revenue Management. OSS, on the other hand, focus on automating network-based operations such as network configuration and service activation.  

Education 

Educational institutions are also benefiting from the IT business revolution. School and universities are using Student Information Systems (SIS) to manage students’ data from admissions & registration to exam administration and graduation. A Learning Management System (LMS) is another pillar in the use of technology in education. LMS is used for the creation and administration of all learning materials. It is used to manage course content for facilitating e-learning.    

Healthcare

Healthcare Management Software is widely used in the healthcare sector today. Healthcare providers use business software to automate and optimize their daily work operations. At the core of business software used in health care is the Hospital Information System (HIS). It optimizes all aspects of hospital administration including all operations related to inpatient care, emergency rooms, operation theatres, clinics, labs, radiology, and pharmacy management. Patient Administration and Electronic Health Records (EHR), or EMR (Electronic Medical Records), are an integral part of Hospital Administration Software        

Banking

Financial institutions are among the first adopters of information technology in the business world.  Banks have been using business systems since the dawn of the IT revolution and the age of mainframe computers. At the core of every bank, there is a core banking system, hence the name, to manage the accounts of all of its clients. Core banking systems are used to manage and control all financial transactions related to customer accounts regardless of where and when they occur. Another related software is a loan management system, which is used to process and track all loans provided by a financial institution to its customers. 

These are some of the business systems used within organizations to run their operations and optimize their daily work. Companies use a wide variety of these, and other systems based on their type of businesses. ESKADENIA Software provides an assortment of business systems whether horizontal or vertical. ESKADENIA’s vertical business systems include software for the telecom, insurance, healthcare, and education sectors.