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Technology: Industry-specific vs. generic software—Is there room enough for two?

August 28/September 4: Volume 32, Issue 6

By Lindsay Baillie

 

Choosing the perfect software for a business can seem like a daunting task, especially with all of the different choices available. Industry-specific software and generic systems are just two of the overarching categories of solutions available, and they both provide a series of positives to help flooring retailers manage their businesses.

While looking for software takes time, Kelly Oechslin, marketing coordinator at Rollmaster, suggests retailers take the 80/20 approach. “When you find a solution that does 80% of what you need, you are better off starting there and working with the industry-specific developer than any other provider in further development of additionally needed functionality.”

Joseph Flannick, president, American Business Software (ABS), also suggests thinking about how much complexity a company can handle and how much time the company is willing to spend setting up the software.

Overall, software experts urge retailers to understand that not all software (including generic and industry-specific) is made the same. Many of the systems offer different services and some are easier to use than others. The size of a dealer and a store’s commitment to implementing the software are two factors that can change how a particular program will benefit the user.

Following are general advantages and disadvantages to using industry-specific and generic solutions, according to software experts.

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One of the benefits in using industry-specific software is familiarity; many developers generally have a greater understanding of industry needs and procedures. In addition, those systems usually contain industry-specific features that help businesses of all sizes streamline processes.

As Mark Wiltgen, sales and marketing manager, Comp-U-Floor, explains: “Software companies that develop industry-specific software have made substantial financial investments, plus years of software development efforts to understand the industry vertical-market requirements and incorporate unique productivity tools, which provide business advantages over generic software products that do not include these features.”

In addition, many industry software developers are able to address individual needs important to each flooring business’s core processes, Rollmaster’s Oeschlin explained.

This key ability allows for a system to be fine-tuned not only to the flooring industry but to the individual needs of the retailer—something a retailer may not find in a generic system, according to Bob Noe, president, Pacific Solutions.

When looking specifically at Enterprise Resource Planning (ERP) solutions, an industry-specific software program has the potential to offer flooring retailers business process management, lead management, fcB2B connections, inventory control for roll goods, tracking contract labor, etc.

“One of the main pain points for dealers in regard to software features is the unique issue of tracking roll goods,” said Maria Cauchon, media services director, RFMS. “The over-the-counter software packages simply can’t handle roll inventory.”

Beyond the features industry-specific software offers, the program also helps to decrease the opportunities for human error. Unlike a generic system, most industry-specific programs do not allow just anyone to access and change information.

“You can track things such as sample checkouts or labor, and you shouldn’t need as many accounting workarounds to get accurate numbers,” said Chad Ogden, CEO and president, QFloors. “You’ll have greater accounting accuracy.”

Furthermore, most of these systems are able to help users decrease the need for manual conversions, according to Gaston Baladi, creator of WIP, a scheduling and tracking program for the flooring industry.

To add even more value, industry-specific software usually comes with a support team that is keyed in to the flooring industry, Comp-U-Floor’s Wiltgen explained.

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Most software experts agree generic systems often offer a solution with a smaller upfront cost. However, they also caution retailers to consider any additional costs that might be tacked on as the business grows and requires different features.

“Generic software is best used for small companies with limited budgets and resources for implementation,” Comp-U-Floors’ Wiltgen suggested.

In addition, generic software may also have a shorter learning curve. “The main advantage to generic software is outside accounting firms are more familiar with these programs,” QFloors’ Ogden said. “Additionally, a back-office employee who has gone to school for accounting will probably be familiar with how to navigate within QuickBooks.”

Another advantage involves the ability to add minor modifications to the system. A reseller that is familiar with the system often has the capability to make those changes, according to Pacific Solutions’ Noe.

Overall, generic software provides a flexible system with the freedom to enter and manipulate functions. “It’s very easy,” WIP’s Baladi said. “When using a generic software you can set it up the way you want.”

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Similar to the advantages, the downside to using industry-specific software may vary depending on multiple factors such as the size of a business and the willingness of management to commit to the software.

One of the major disadvantages is the potential higher initial cost. However, according to Comp-U-Floor’s Wiltgen, “The apparent higher cost is quickly recovered from productivity gains and growth with better financial returns.”

While some industry-specific software might be harder, or take more time to learn than generic, the level of difficulty and amount of time is dependent on which software a retailer is using. Each industry-specific program has its own learning curve and ease-of-use level.

Beyond the cost of the software, industry-specific programs may not have as many accounting features. “Some of the accounting and reporting features are not as robust as those found in generic software,” QFloors’ Ogden explained. “Also, some outside accounting firms turn their noses up a bit at industry-specific software because they only want to deal with what they know and are familiar with—which is generic software.”

Another disadvantage, Ogden adds, is some industry-specific software is only designed for larger operations, and some is only designed for smaller operations. A company seeing rapid growth could have trouble transitioning from one system to another.

In addition, if a smaller business purchases something designed for a larger company, it can be a large financial investment. Also it might take time for the smaller business to get the proper return on investment. Conversely, if a large business purchases something developed for a smaller company it will quickly outgrow the system. The system might not have all of the features a larger business needs.

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One of the crucial disadvantages of using generic software is the lack of important industry-specific features most companies need to run daily functions.

“General programs like QuickBooks and Sage cannot handle carpet roll inventory correctly, so it may cause installation or sales errors from time to time,” said Steven Wang, president, Measure Square.

Most software experts agree another important point to consider with generic software is most accounting entries are not done correctly for the flooring industry. These systems, they say, often require a lot of additional manual journal entries in order to get correct results.

“Because of these shortcomings, it generally requires more manpower, more resources and more time to process the same amount of business as if you were to use an effective, industry-specific piece of software,” Ogden explained.

Furthermore, while the initial cost of generic software may be cheaper than industry-specific programs, it is often more expensive over time. According software experts, these systems can force retailers to pay more in overhead. As a business expands and more accounting help is needed, the retailer ends up paying people to do what an industry-specific program can do on its own.

Another disadvantage to using generic software is the lack of industry experts available to help tweak the software to fit a retailer’s needs. Custom training and support are not always available when using generic software, critics say.