Odoo vs ERPNext: which ERP system is scalable for SMEs?

What makes an ERP system ideal for small and medium-sized enterprises? Let’s find out how Odoo goes head-to-head against ERPNext in the battle of scalability.

ERP software creates many benefits for SMEs to help them automate and integrate their business processes, improve efficiency and productivity, and gain better visibility and control over their operations.

SMEs' considerations for choosing an enterprise resource planning system can vary based on their specific needs and preferences. But in some ways, they come down to cost, functionality, scalability, and ease of use of the software.

A cloud-based type is considered an ideal ERP software for small businesses. Out of many players in the market, you can consider Odoo and ERPNext - both are free and open-source ERP solutions.

ERP software creates many benefits for SMEs to help them automate and integrate their business processes, improve efficiency and productivity, and gain better visibility and control over their operations.

SMEs' considerations for choosing an enterprise resource planning system can vary based on their specific needs and preferences. But in some ways, they come down to cost, functionality, scalability, and ease of use of the software.

A cloud-based type is considered an ideal ERP software for small businesses. Out of many players in the market, you can consider Odoo and ERPNext - both are free and open-source ERP solutions.

Odoo vs ERPNext

ERPNext: an ERP offering a wide range of interconnected business modules. It is known for its modern and user-friendly interface focusing on simplicity and ease of use for small and medium-sized companies. Built on the Frappe framework, ERPNext enables users to customize the workflows through built-in customization tools.

Odoo: an ERP system offering 48 main business applications and over 40k third-party apps in the Odoo App Store. There are two editions of Odoo Community and Odoo Enterprise. Due to its modular model, businesses only need to install the apps/modules they need and expand later. It is highly customizable, which allows users to modify or create a new module through Odoo Studio.

Here is an overview of the Odoo vs ERPNext comparisons to help you determine which ERP is for suitable for all your business needs:

Table comparison ERPnext vs Odoo

Importance of choosing the right ERP for business needs

For SMEs, the importance of choosing the right ERP for scaling lies in its ability to improve business management, facilitate cost savings, and support operational improvements. When you compare ERPNext and Odoo, both can assist you in all three.

ERP software like Odoo and ERPNext provide access to critical data, enabling faster communication, performance analysis, real-time reporting, and informed decision-making. Additionally, both systems reduce manual data entry, and ensure proper tracking of activities, thereby enhancing productivity and control over various business departments.

But when selecting an ERP system for small and medium enterprises, bear in mind to factor in its flexibility and scalability. It needs to meet the current needs of the business but also be adaptable to future requirements, ultimately supporting business growth.

Odoo • Image and Text

Ready to boost your SME’s scalability? Embrace the power of Odoo ERP now!


Detailed features: Odoo vs ERPNext comparison

To determine the winner between the two ERPs in terms of scalability, let’s dive deeper to compare Odoo vs ERPNext features to find the perfect solution for businesses.

A. Backoffice Management

Illustration - Backoffice Management

If we compare ERPNext vs Odoo, they are both open-source ERP platforms that offer modules for managing various aspects of your business, such as employee management and projects, They also have different administrative tools and user experiences. However, Odoo vs ERPnext has some differences in capabilities:

Human resource management and payroll: ERPNext's HR and Payroll module covers your general needs for employee management. Additionally, it also offers a 5-step payroll process which includes defining period and tax, creating salary structure, assigning salary and generating slips, submitting slips and pay, recording payment, and generating reports.

Similarly, Odoo has dedicated HR management features to manage workers on top of providing HR analytics reports. In terms of payroll, the ERP giant also offers an automatic pay slip generation to ensure accuracy and compliance, while reducing the burden of manual calculations.

When it comes to expanding businesses’s regional and global reach, Odoo stands out from its competitors. With Odoo, companies can automatically manage tax calculations, and enjoy localization for labor laws compliance, and customizable payroll rules.

Projects:  Odoo enables project management with task management features using  Gantt charts. Gantt charts display the duration and progress of tasks on a visual timeline, which helps project managers plan, schedule, monitor, and communicate the project status and scope. Odoo also offers the Kanban view to visualize and manage the workflow of a team, limit work in progress, and identify bottlenecks and improvement areas. 

Similarly, ERPNext supports Gantt charts, project planning, execution, and monitoring with tasks, timesheets, billing/project costs, and reports. While other ERP solutions have certain limitations, Odoo has more options for collaboration, such as chat, notes, email, and activity scheduling, that can ease the communication flow between team members.

General administrative tools: To make admin work more effective, both Odoo and ERPNext have modules that can be utilized to manage company resources and services. In contrast to ERPNext, Odoo offers additional resource management features like resource leveling, which are important if you want to save costs as you scale. In the field of service management, Odoo also has modules to support customer inquiries and receive customer feedback, like Helpdesk and Survey.

User experience: Odoo 17 users praised its user experience - from interface, and customization options, to integration capabilities, which are the aspects you need to tailor your system to follow how your growing business requirements. Odoo stands out from other ERP systems due to its modularity, scalability, and affordability. However, the software has a steep learning curve when implemented by a non-Odoo expert and has been deemed by some users to have less comprehensive documentation. 

On the other hand, ERPNext users appreciated its simplicity, ease of use, and functionality. They also liked its open-source nature. However, the system itself has limited features and limited customization. ERPNext still has minor shortcomings in device compatibility.

B. Supply Chain Suite

Illustration - Supply chain suite

One of the challenges that SMEs are facing is how to keep the supply chain running when they expand. Odoo and ERPNext both offer a comprehensive supply chain suite that covers inventory and order management, supplier and purchase management, and logistics and distribution. 

There are several differences in how they approach these functions and how they suit different business needs.

Inventory tracking and distribution management: The two ERP systems have features for inventory tracking and managing distribution in their respective modules. However, Odoo has additional features, such as multi-warehouse, multi-company, and multi-currency support, as well as inventory forecasting and replenishment rules for elevated inventory management experience. 

It is strongly recommended to deepen your understanding of the inventory modules to create a well-informed decision when choosing your ERP. Get to know Odoo Inventory and its features, or learn how to master the Inventory module to track your product and set a removal strategy for your perishable goods before making your choices.

Order management: ERPNext and Odoo ERP have features for order management, but with Odoo, you can also find tools for drop-shipping, or increase your profit with tools for cross-selling and upselling. Additionally, you can also increase your efficiency with the order optimization and automation features that Odoo provides.

Supplier relationship management: Odoo ERP and ERPNext have modules for supplier relationship management, such as supplier information safe-keeping, pricelist management, quality inspection, and self-service portal. The difference is that Odoo has more advanced features, such as contracts management, purchase agreements management, and the ability to create and send requests for quotations. 

Purchase order capabilities: Generally speaking, Odoo and ERPNext have similar features in their modules regarding purchase order capabilities.

Logistics management: Both ERPNext and Odoo have modules for logistics management for all shipping purposes. Batch picking and delivery cost calculation, however, is only provided by Odoo.

Find out how Odoo can assist in solving your eCommerce logistic issues to boost your business’s scalability.

C. Integration & Customization

Illustration - Integration & customization

The ability of an ERP to integrate and customize is important for SMEs to optimize their operations, reduce costs, and increase profitability. Comparing Odoo vs ERPNext, their availability to be integrated and customized is as follows:

Odoo

Odoo allows maximum integration support for its own modules and permits integration with other external applications or third-party services. It has a large number of apps that can be installed and integrated with the core modules. It also has built-in integrations with popular platforms such as Google, Amazon, eBay, Shopify, PayPal, and more. Additionally, it has REST API and integration with Zapier, which will let you further connect Odoo to thousands of other apps.

Odoo is known for its high level of customization, as it offers a modular architecture that enables businesses to create, remove, or modify any module as per their needs. Odoo also has a user-friendly interface that allows users to customize the layout, design, and functionality of the system without coding. Additionally, Odoo has a large community of developers and partners, that provide custom modules, extensions, and integrations for various business scenarios. 

ERPNext

ERPNext allows only limited integration support for its own modules and some external applications or services. It has a few modules that can be integrated with the core ERP system. It also has some built-in integrations with platforms such as Google, Slack, PayPal, Shopify, and more. 

ERPNext is also customizable but to a lesser extent than Odoo. It has a simpler and more streamlined interface that allows users to configure the system settings, fields, forms, and reports. However, ERPNext has a monolith structure, which means that the entire system is built as a single, unified unit that is self-contained and independent from other applications. 

To integrate and customize ERPNext, users need to use the Frappe framework, which is the underlying technology of ERPNext. This requires coding skills and technical knowledge. To make a change or an update to a monolith ERP system, the entire system has to be rebuilt and redeployed - which presents challenges for people looking to customize or have regular updates. 

On the bright side, a monolith structure can provide high performance, simplicity, and broad hardware support, but it may also have some drawbacks in terms of security, stability, and flexibility.

D. Partner Network

Illustration - Partner network

As your business grows bigger, you will need ERP support that works efficiently and has the experience to address any potential issues your business might encounter. The global partner network of an ERP solution is an important factor to consider, as it indicates the availability and quality of implementation, customization, and support services for the solution.

There are some differences between ERPNext vs Odoo in terms of their global partner networks:

Odoo

If we compare ERPNext vs Odoo, Odoo has a larger and more diverse global partner network, with more than 2,200 official partners in over 120 countries. You can choose a partner like Portcities, who is certified by Odoo and has extensive experience and expertise in implementing, customizing, and supporting Odoo solutions for various industries and business scenarios.

At the same time, Odoo has a vibrant community of developers and partners that provide custom development services. The strong community and support allow the ERP giant to possess a marketplace with a lot of ready-made apps and modules that can be installed and integrated with the core ERP system. Odoo also releases new features and upgrades that can address business challenges yearly.

ERPNext

ERPNext has a smaller and less diverse global partner network, with about 120 official partners in over 30 countries. These partners are also certified by ERPNext and have experience and knowledge in ERPNext. 

If we analyze the support available for custom development and modification, ERPNext has a smaller community of developers that can help with customization. New feature releases are infrequent since the ERP relies on volunteers to get new features on the platform.

E. Hosting Options

Illustration - Hosting

Hosting options are important for an ERP solution, as they affect the performance, security, and cost of the system. Because SMEs need to grow, it is important to consider scalability to handle the increasing volume and complexity of data and transactions. Here is a brief comparison of the hosting options available between Odoo vs ERPNext:

Odoo

There are four hosting options for your Odoo ERP: Odoo Online (SaaS), Odoo.sh, Odoo On-premise, and private cloud hosting solutions. For SMEs, you can consider cloud-based options like Odoo Online, Odoo.sh, or other cloud hosting solutions because they are more scalable and cost-effective than on-premise hosting that requires local hosting infrastructure and hardware maintenance and upgrades.

Most cloud-based hosting services make sure your Odoo is maintained, monitored, and automatically backed up. Odoo, Odoo partners, or other cloud service providers also offer up to 99.9% SLA uptime and high-level security, guaranteeing to protect your Odoo from disasters and threats.

Take advantage of Odoo’s hosting plan by checking out which hosting works best for your business size and system requirements.

ERPNext

ERPNext offers only one type of hosting option: cloud. ERPNext is very light on the system resources and can run smoothly on virtual private servers (VPS). It has the same scalability and security benefits and challenges as Odoo’s cloud hosting. Cloud hosting allows businesses to scale up or down their server capacity and performance as per their needs, without worrying about hardware maintenance and upgrades. 

Generally speaking, cloud hosting is more secure and compliant than on-premise hosting, as it provides encryption, backup, firewall, and antivirus services, as well as compliance with ISO, PCI, GDPR, and other standards.  However, cloud hosting also limits the customization, control, and security of the system, and depends heavily on internet connection.

Final verdict

SMEs face many challenges in their daily operations, such as managing multiple business processes, handling large volumes of data, complying with regulations, reducing costs, increasing efficiency, and satisfying customers - all of which would require an ERP that can follow the growth of their business. If we compare ERPNext vs Odoo, both systems have their strengths and weaknesses in solving these issues depending on your business needs, type, and model.

On one hand, ERPNext is better if you are looking for a simpler and more affordable ERP solution that caters to small and medium-sized businesses. On the other hand, Odoo implementations for SMEs offer more versatility, power, and scalability for your business needs. 

If you are interested in Odoo, feel free to reach out to us for a consultation. We are an Odoo partner that can help you with full Odoo implementation services.

9 January, 2024
Author
Odoo vs ERPNext: which ERP system is scalable for SMEs?
Devina Anglingdarma
Content Writer
Devina Anglingdarma is a content writer with a Bachelor of Arts degree in psychology and a passion for social empowerment, sustainability, and technology. Whether advocating for sustainable practises or unravelling complex technological concepts, she aims to bridge gaps and foster understanding. Aside from her passion for writing, Devina is an enthusiastic volunteer for youth empowerment.
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