By now, you have probably heard the pitch for Odoo, an emerging software vendor who has made themselves known across the market, from large billboards to online ads. Odoo is positioning itself to be one of the giants, so you may be wondering, “is Odoo a viable solution for my business?” Read our blog to find out more.
Founded in 2005, Fabien Pinckaers began Odoo’s journey through the development of TinyERP as an open-source solution for small businesses. The core accounting solution grew and by 2009, it was renamed OpenERP and expanded its offerings with solutions for HR, CRM, and even manufacturing. Ultimately, in 2014, OpenERP was rebranded to Odoo, reflecting the products offerings across the business suite, no longer just ERP.
Odoo is a business management software solution offered on an open-source platform. The platform has enabled Odoo to become a modular solution with greater extensibility and a wide range of solutions for customers to get what they need, when they need it.
Odoo as we know it today offers two editions to customers, Odoo Community and Odoo Enterprise, each vastly different in what they deliver to customers.
Odoo Community is the open-source framework in which the application was built. Community acts as an entry point for Odoo users who may need the bare minimum from their business solution with room to grow in the future. While is does have much of what a growing business could need, with core capabilities in Finance, Sales, Website Development, Human Resources, Marketing, and even some supply chain and project management functionality, it is very surface level. In fact, Odoo Community even lacks core accounting, taking it out of the running for any major ERP upgrade consideration.
However, it is important to note, Odoo Community is a FREE application, giving small businesses a way to build before they can afford a more robust solution.
Odoo Enterprise is a more viable solution for those looking to establish a solid ERP core and extend from there. Odoo Enterprise is the licensed edition of Odoo’s application. Once customers are licensing the product, they have more access to core capabilities. Generally, customers will have access to unlimited support as well as version upgrades, more typical of ERP and other Software-as-a-Service (SaaS) offerings.
With Odoo Enterprise, customers have access to a much more robust catalog of solutions. Within Finance, customers can “flip the switch” for all core accounting needs, including the General Ledger, Bank Reconciliation, Consolidation, Reports, and more. This adds to the invoicing and expenses capabilities offered in Odoo Community.
Additionally, customers can achieve deeper functionality across all major business functions with Odoo’s various modules. Manufacturing companies can add modules for shopfloor, scheduling, and Product Lifecycle Management, opening its potential to meet the needs of manufacturers in the mid-market.
Other capabilities include marketing automation, Field Services, and even a customization studio. Functionality is achieved through modules, ensuring the stack can be customized to meet the needs of each unique business.
Open-source software is, “software with source code that anyone can inspect, modify, and enhance” (opensource.com/resources/what-open-source). Essentially, everyone has access to the code that makes up the solution.
In turn, an open-source platform puts its source code on display, allowing anyone to “use, study, modify, and distribute it for any purpose” (opensource.com). Odoo’s open-source platform enables developers and customers in the community to create modules and solutions that operate seamlessly with the core solutions. Ultimately, it creates a more transparent, cost-effective solution.
Odoo advertises itself as a solution for small businesses all the way up through large enterprises. Its goal is to meet the needs of a wide variety of businesses. This is especially evident in how it markets its “industry focuses” across retail, food & hospitality, real estate, consulting, manufacturing, health & fitness, trades, and even nonprofits.
Modular solutions like Odoo are built to scale up, down, and across verticals, enabling it to meet the needs of a much vaster audience. However, this typically means the solutions offer less on a granular level, unless someone develops a solution within the ecosystem (but that is no longer a “pure” Odoo offering) or an internal, isolated customization. Once a business adopts more complex operations, solutions like Odoo may not immediately be able to meet those needs. Odoo’s ideal industry fit (out-of-the-box) tends to be in financials only, retail and e-commerce, distribution, and light manufacturing.
Additionally, open-source solutions require significant IT oversight compared to closed source solutions, which encompasses most other mid-market ERPs. While the costs to acquire a license may be relatively low, expenses add up when it comes to maintaining a knowledgeable IT department to develop and improve the system. This makes solutions like Odoo fit into very specific use cases for long-term viability in the SMB space.
Odoo has a very straight-forward pricing model, driven mainly by the open-source model. Directly on Odoo’s website, prospects will find a clear outline of the pricing tiers. Customers may be relieved to see a single price per user structure that is all inclusive of the offerings across each tier.
For those just getting started, Odoo has a single application offering through Odoo Online (Odoo’s “SaaS” offering) with unlimited users for $0 a month. That’s right, free. But it is important to note that this is an EXTREMELY limited version of the Odoo product. More than likely, growing businesses won’t be able to meet their needs on a single application for long. For start-ups and small businesses, this could be a steppingstone, with integrations to applications like QuickBooks that will allow for a more gradient transformation.
Customers that need access to Odoo’s entire suite of existing applications can upgrade to the Standard offering. Standard provides access to all applications through Odoo Online for $24.90 per user, per month for the first 12 months. After that time, the price will increase to $31.10 per user, per month.
The final tier is Odoo Custom, taking advantage of the full open-source platform. Customers in this tier can deploy either Odoo Online or Odoo on-premises to meet more unique needs. This tier also offers access to Odoo Studio, “a toolbox used to customize Odoo without coding knowledge” (odoo.com). Through Odoo Studio, customers have greater control over their instance through a no-code/low-code platform, enabling them to customize applications and workflows for their needs. Odoo Custom also supports multi-company models and greater data access with Odoo External API.
Not included in any of these pricing models in Odoo.sh, which is only available to those already on Odoo Custom. Odoo.sh is Odoo’s Platform-as-a-Service (PaaS) offering where developers can collaborate to host and develop Odoo Enterprise applications. Essentially, “it allows you to create your cloud-based database whilst having custom developments or third-party apps installed” (odoo.com). While this is an option, it is not a service we would recommend to companies without large, well-equipped IT departments.
Based on our experience, Odoo is a viable option for businesses considering an ERP upgrade. However, especially as an open-sourced application, it is vital that in conjunction with the product, you also identify qualified implementation resources that can guide your deployment. And much like any other ERP, we recommend carefully identifying your needs and evaluating solutions based on your requirements. You cannot make the best decision for your business without seeing a product in action against your requirements
For open-source products like Odoo, the cost is fair and possibilities are endless—but endless possibilities can also make is easier to get in over your head. Businesses will need to understand their precise needs and how to properly design and test their solutions, as well as have robust IT teams in place to develop and maintain the system. That makes it the ideal solution for some, and ill-fitting for others.
Don’t know if Odoo is right for you? Schedule a free consultation with the experts at ERP Advisor Group today.