4 Factors to Consider when Choosing an ERP
An overview of two main ERP categories and four factors to consider when choosing an ERP.

Your ERP is the backbone of your business; not only must it cover all your current requirements, but it should also be able to scale and grow with your company. Choosing an IT system that will have a significant operational impact across the entire business, in the long run, is without a doubt a demanding task that may require months of research and considerable buy-in from company stakeholders. 

In this article, we discuss the factors you need to consider in order to select the right ERP system for your company from a long-term perspective with a focus on open-source ERP software such as Odoo. Comparing functionalities and features of every available ERP system is a more short-term solution that most likely will result in future complications.

Before we jump into the ERP comparison and Odoo evaluation, let’s look into the two main types of ERP systems. 

Open Source ERP vs. Proprietary ERP

Open-source software (OSS) uses an ‘open code’ that is freely available on the internet. As this software is open to the public, it can be downloaded, used and modified without any restrictions. This means that once a buyer purchases such a system, there is no annual license but lifetime access to the software.

Closed source software (CSS) or proprietary software refers to a system with encrypted code. Only the original authors of software can access, copy, and alter the source code, meaning companies don’t purchase to own the software but only pay for the right to use it.

Some ERP systems come in both versions as a combination of these options. Take an example of Odoo that offers an open source version called Odoo Community, available to the public with limited features and functions. On the other hand, Odoo Enterprise is a paid version with additional features and benefits that clients receive upon paying the license fee and can be modified by the company’s IT team or an official Odoo partner such as Port Cities.

4 Aspects You Should Consider When Choosing An ERP 


Company Size

The size of your business is closely associated with the budget, the number of users, and the number of processes you want your ERP system to handle.

Like most open source ERP software, Odoo was originally designed for small and medium-sized businesses. It is much more practical to start small in a software solution and add new functionalities as the business evolves. For growing companies, the freedom to adapt, malleability to changes and timely access to updates are some of Odoo’s competitive advantages. 

However, it doesn’t mean big companies should be discouraged from adopting high quality open-sourced options as their primary ERP systems. In fact, many fast-growing companies and multinational brands, such as Gojek, AEON, or Wardah Cosmetics Indonesia, use Odoo to run their operations and benefit from the flexibility and scalability that Odoo offers.

Globally speaking, SAP and Oracle are great solutions for developed and large enterprises that need to implement a complex ERP solution without the need for significant customizations in the future. But their sophisticated technology comes with a price that most SMEs cannot afford to invest in or maintain. 

Customizations

As a rule of thumb, when choosing an ERP system, consider the number of requests and customizations your company will need in the future. 

Open source ERP systems such as Odoo, enable its users to customize the code and deploy requests within several days or weeks (depending on the complexity of the request). 

Closed source ERP systems such as Oracle and SAP are, on the other hand, not so flexible and even the slightest changes can take up to several months as they cannot be customized in-house.

Don’t forget to analyze the possibilities of third-party integrations as well. Are the base modules and functions sufficient for your business needs?

Odoo’s feature-rich integrated suite of applications is completely customizable and available for third-party integrations. In total, Odoo, and its developer community, developed more than 28,000 Odoo applications, including localized solutions for specific markets.

Odoo • Image and Text

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Support

Another important factor is the capacity and availability of support after the deployment of the IT software. Large enterprises with IT departments can react to possible issues in a proprietary ERP system by themselves. However, large companies using SAP or Oracle still opt for implementation with a specialized partner. On the other hand, SMEs often lack the necessary in-house IT resources and knowledge, and that’s when a support team or partner comes in.

Odoo, one of the best developed open source ERP in the market, has more than 730 partners, including Port Cities, who can assist clients with the full package from hosting options, customizations, implementation, user training, and support

Budget

Vertical apps (or single-use business apps) such as Trello, Hubspot, or Mailchimp or some operating systems such as Zoho are cheaper than traditional ERPs, such as SAP or Oracle, and often the first choice for SMEs and start-ups in the beginning of their establishment. Consequently, it is also the reason why oftentimes, these businesses struggle with data loss, non-compliance, manual and duplicate data entries, resulting in time-consuming processes and waste of resources. 

From a long-term perspective, the total cost of using several single-used applications is often considerably higher than it seems at first. On top of paying various app licenses, growing businesses often require new additional softwares to track their processes and performance. This is how the opportunity cost, coupled with time inefficiency and cost might reach the price of complex yet affordable all-in-one business management systems such as Odoo.

The modular structure of Odoo (you pay only for the apps you use) makes Odoo by far the most cost-effective solution. However, to some businesses, such a pricing model might seem tricky. What is the final cost for Odoo implementation when the pricing is calculated on a per-user and per-app basis? In order to provide full information about costs, Odoo developed a cost calculator.

On a side note, Odoo Enterprise even has a free plan, when a user chooses one app or a combination of some apps (e.g. Website + Ecommerce + Invoicing, Project + Timesheet). You will only have to pay if you will need more apps, or if you want to change the hosting options (the free plan only works for Odoo Online - SAAS).

Consult an expert when choosing the best ERP for your business

With plenty of available ERPs on the market, deciding on a software system that best caters to all your business needs now and in the future can be an overwhelming process. Therefore, it is strongly recommended that you choose an implementation partner with industry expertise and insights to provide you with advice tailored specifically to your business.

As the best Odoo partner in APAC, we are happy to help you shorten this decision-making process and showcase Odoo’s potential as a best-in-class open source ERP software solution during a free live Odoo demonstration. Schedule a meeting with us.


10 June, 2021
Author
4 Factors to Consider when Choosing an ERP
Pavla Travnickova
Marketing Executive
Pavla is a Marketing Executive and content contributor at Port Cities. She has expertise in Operations, HR processes, online marketing and content management strategy.
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Port Cities Australia and Port Cities Americas becoming Gold and Silver Odoo Partners in 2020
Two of our youngest branches have become Odoo Gold Partner and Silver Partner, implementing customized Odoo ERP solutions for clients in various industries in Australia and Latin America.