Addon vs vertical

From Dynamics

In the ERP world, we hear the terms Add-On and Vertical a lot. Often people confuse the two, and use the terms interchangeably. But its very important to understand that these are two very different, and quite unrelated terms.

What is an Add-On

An Add-On is a piece of code, that is integrated to the existing ERP system, or a program or external function that is somehow closely tied to the customer ERP application. An Add-On usually either performs a function that is not currently in the Standard Application (eg UPS or FedEx shipping), or it integrates with an external product (eg; payroll)that already has special functionality.

In simple terms, and Add-On is a program. In the Add-On case, the developer does not need to have a full understanding of the complete business process of how the End User runs their business, this means that a company that develops a good Add-On can forward sell this to other Partners, that can then implement that for their clients, knowing how that end user runs their business. The analyst need to know how the Add-On works, not how the End User works. In the Case of a Shipping Add-On, the developer and analyst need to know how shipping works, but it is not important if the end user company sell refrigerators, or ships books for an internet retailer, they just need to know how to ship items.

What is a Vertical Solution

To correctly visualize a Vertical, we need to call it a Vertical Solution. Since the Vertical it self has nothing to do with the code used to implement it. The Vertical Solution is the business knowledge of how that Vertical works. In the vertical scenario, the Developer needs to work very closely with an analyst that has a deep knowledge of the business processes of the company. That analyst must have spent a number of years in that industry, and have a good working knowledge of how that industry "does things". On the other hand, it is not important for the Analyst to have a deep understanding of the Dynamics ERP system.