For small and mid-size organizations looking for ERP systems, NetSuite and Odoo are two common options. These are two very distinct products with pros and cons that will be sure to help any organization achieve strategic goals.
One of the biggest evaluations that Third Stage support is helping our clients choose between NetSuite and Odoo, especially in the small and mid-market. A lot of smaller organizations use one or both products to introduce their organizations to ERP software. The key question becomes, what are the points of differentiation and ultimately, which is the best in the end?
Flexibility
Many organizations deploy new technology to become more flexible because they want to either build or retain a certain amount of elasticity in the operating or overall business model. NetSuite and Odoo are very different regarding flexibility.
Odoo is generally considered a more flexible product in that it is an open-source technology. This structure offers more access to configure and change the source code, which may not be possible with other types of products like NetSuite and other ERP systems.
Also, Odoo offers thousands of different applications that can be added to the core ERP functionality. If suppleness is a high priority, Odoo may be a very effective fit for the organization.
In contrast, if the organization is trying to build efficiency, standardization, scale, and a repeatable set of business processes, NetSuite might be a better fit because it’s a software as a service cloud solution. Which means there’s less opportunity to change the software. Some might view that as a negative, but it also is a positive. A lot of organizations we work with want that sort of standardization.
In the end, the off-the-shelf capability may help organizations scale for growth. This trade-off needs to be considered when evaluating NetSuite and Odoo.
Modularity
Another distinct difference between these two products is the level of modularity. For example, NetSuite is an integrated, complete ERP solution. It provides several integrated modules, and it can be hard to deploy bits and pieces with other parts of the technology.
With Odoo, it’s easier to implement a phased approach because of the modular structure of the product. Agriculture is meant to be pulled apart with different modules to tie together integration. It’s almost designed to be put together piece by piece if needed.
Again, these implementation offerings need to be considered, Odoo may seem easier however, NetSuite is certainly more standardized.
Total Cost of Ownership
Most organizations that Third Stage works with are usually concerned about the total cost of ownership, as they should be. How we address this is – first, both systems are significant investments.
NetSuite is generally going to be a more expensive solution. Mostly because it’s not an open-source solution, which makes Odoo a lower cost pricing model and NetSuite with a higher cost for subscriptions and licensees.
The real kicker for NetSuite that adds to the total cost of ownership is in their contracts and subscription agreements. Many clauses in these agreements cause the potential cost of a subscription to increase over time. From transaction volume to the number of users, additional modules, or all the above. Costs will generally creep up a bit faster with NetSuite vs. Odoo.
On the flip side, the software license costs might be lower with Odoo. There are frequently additional added costs in terms of implementation and long-term maintenance of the software. Odoo often requires a certain amount of technical competency and internal IT capabilities that cost money.
Most importantly, organizations should consider all costs when evaluating potential software as all systems’ pricing system is different.
Complexity
Another consideration between these two products is the level of complexity or simplicity of the products. NetSuite is generally a more straightforward type of product as a single SaaS solution that is fully integrated. Naturally, a lot of it cannot be changed, which could be a negative aspect. However, could be viewed as a positive because it is more accessible.
Odoo is modular because it must tie all together. This creates a certain amount of complexity that might be challenging for some organizations to manage, especially without strong internal IT capabilities. Not having those solid internal IT capabilities or having no intention of having those capabilities longer-term, may cause NetSuite to be a more straightforward option.
Business Value
Ultimately, everything comes down to business value. The way to determine business value is to look at all the things we’ve talked about in terms of cost, flexibility, and the simplicity of each product. The product that best fits the needs and is aligned with the vision of the organization will likely deliver the most business value.
It is still important to identify detailed business requirements, business process workflows, and future state needs as an organization. These will be the main evaluation points for any system. Hopefully, the general criteria above will help determine the business value relative to the cost of these two solutions.
Resources
I hope this has helped put things into perspective when it comes to comparing NetSuite and Odoo. With that said, I also encourage you to look into downloading our 2021 Annual Digital Transformation Report which provides best practices for how to deploy technology and also a more extensive list of ERP, CRM, and HCM systems.
If you have questions regarding more ERP comparisons or any additions/feedback, please don’t hesitate to reach out to me directly. I am happy to be an informal sounding board as you move through your digital transformation journey.
