Horizontal integration explained: what it means for finance leaders

Horizontal integrations are third-party applications or add-ons that plug into an ERP system to provide specific capabilities, typically connected via APIs or middleware, without being natively built into the ERP’s architecture.

Horizontal integration can offer finance leaders immediate flexibility when they’re experiencing periods of rapid growth – especially when new billing models and subscription services add complexity to activities like invoicing and revenue recognition. However, it can also limit opportunities for automation and contribute to SaaS sprawl that slows down finance teams and obstructs growth down the line. 

The pros and cons of horizontal integration

When finance teams invest in dedicated apps that operate outside their ERP, they are typically accepting a tradeoff between flexibility and control. CFOs and controllers taking the lead on strategy will need to consider their position carefully and balance out short-term needs with long-term value. 

Pros:

• Instant functionality. Stand-alone software is often purpose-built for unique challenges like complex AI subscription services and multi-currency billing.
• Limited automation. Integrations like hybrid NetSuite SuiteApps and bolt-ons may enhance ERP automation if they are properly integrated and maintained. 
• Short-term scalability. The right investment will likely be sufficient to keep pace with modest periods of growth. 

Cons: 

• SaaS sprawl. If horizontal integration is your default strategy, you will likely evolve a complicated network of logins that’s stitched together by a few experts – and lots of spreadsheets. 
• Siloed workflows. Departments relying on their own systems don’t share a single source of truth, leading to internal friction and inefficiency.  
• Compliance and reporting risk. When data isn’t housed entirely within your ERP, errors and delays filter into reporting and compliance processes. 
• Data integrity issues. Stand-alone systems – no matter how well integrated – eventually break down and suffer syncing delays. Upgrades, routine maintenance, variable customer service and shifting industry standards may all degrade the value of your investment over time. 

Horizontal vs. vertical integration

Unlike horizontal integration, vertical integration focuses on ERP-embedded solutions and workflows that align your financial operations under a single login. These typically come in the form of native integrations and SuiteApps that live entirely within your preferred ERP environment. 

While vertical integration may not provide the same functionality as dedicated stand-alone applications, users gain a number of valuable benefits.

Vertical integration delivers:

• True automation. Because ERP-embedded applications lie entirely within your ERP environment, they allow for seamless automation across all departments. 
• Enhanced control. For NetSuite users, native SuiteApps extend out-of-the-box capabilities, giving users more control over their financial data with custom rules and dashboards. 
• Real-time data. Embedded tools like SuiteApps are certified Built for NetSuite and designed by partners in Oracle’s SuiteCloud Developer Network (SDN). That means they don’t break or require external patching. 
• Single source of truth. With an ERP-embedded data strategy, every department in finance leverages the same data. 
• Simplified workflows. When all your data is channeled through a single system, users don’t need to rely on manual work to tie their financial strategy together. 

Challenges of Horizontal Integration

While horizontal integrations can extend your tech stack’s functionality, they often come with trade-offs that finance leaders must weigh carefully. These external tools operate outside the ERP’s native environment, introducing layers of complexity that can slow teams down and hinder long-term scalability.

Key considerations include:

• Operational friction. Because third-party tools aren't deeply embedded in platforms like NetSuite, core processes like month-end close, reporting and reconciliation may require extra manual steps to sync data or maintain accuracy across systems.
• Resource strain. When integrations rely on human effort to bridge gaps, growing transaction volumes or business complexity can outpace your team's capacity, forcing additional headcount just to maintain the status quo.
• Disjointed user experiences. Toggling between multiple tools, logins and interfaces disrupts workflow continuity. This can lead to productivity dips and longer onboarding ramps for new team members.

Integrating for the future with Zone & Co

Stand-alone tools and non-native SuiteApps can offer NetSuite users a quick solution for a difficult finance challenge – but they aren’t without risk. Picking the wrong application can cripple your financial architecture down the road when unforeseen circumstances arise. 

Zone & Co is the only provider delivering multiple ERP-embedded vertical integrations for NetSuite users across a wide range of financial workflows. Built by former CFOs, controllers and NetSuite power users who understand the difference between automation and ERP-embedded finance. 

Our native solutions are designed to leverage NetSuite’s full capabilities, eliminating manual workflows and transforming how finance teams manage their data for billing and revenue management, AP, reconciliation, payroll management and reporting. They live in NetSuite, feel like NetSuite, and deliver a completely intuitive user experience. 

That’s how our customers achieved a 90% increase in billing efficiency, cut three months off of payroll admin time, and revolutionized their AP department with 100% bank reconciliation accuracy with faster month-end closes. 

To learn more about the power of true embedded finance for NetSuite users, book a demo of Zone’s unified embedded finance platform today.