Disclaimer: Third Stage Consulting is an independent ERP consulting firm. Third Stage has no financial ties to ERP vendors, either directly or through parent companies or affiliates. Accordingly, the below analysis is completely technology-agnostic and 100% free of vendor bias or compensation.
More than ever, small businesses have a plethora of top ERP systems to choose from. Whether yours is a small business that is just starting out, is scaling for growth, or has already outgrown its old ERP systems, there is something in the market for everyone.
Small business technology options range from basic accounting systems to more advanced, enterprise ERP and CRM systems. There are the big names such as SAP vs. Oracle, but there are also lesser known – but equally relevant – ERP systems designed just for small businesses.
We evaluated nearly 100 systems in narrowing our list of top ERP systems for 2020. In doing so, we used a comprehensive quantitative and qualitative methodology to rank these systems. We also used data points to include our team’s more recent implementation experience with each of the leading solutions.
We used the following quantitative and qualitative criteria to determine the best-performing systems:
Below are some of the top small business ERP systems that your organization should be considering in the 2020s. The video below provides a more comprehensive view of the top 10, with a summary of each of the 10 outlined below:
Deacom is an easy-to-use ERP system used by small businesses as well as larger, more global organizations. The product is particularly strong in manufacturing, distribution, and supply-chain intensive companies. While it is used by a broad set of customers of all-sizes, smaller companies tend to gravitate to its easy-to-use interface and flexibility. Its primary downside is the lack of resources and implementation partners, but smaller companies in key industries tend to find value in the product’s capabilities.
Many view Salesforce as simply a CRM system – which it is – but it also provides third-party applications on its Force.com platform to enable broader, enterprise-capabilities. Smaller business benefit from its ease of use, implementation, and flexibility, and it also integrates well with other third-party systems. Its primary downside is that it can be hard to maintain for those without dedicated IT resources, but its strengths often outweigh those weaknesses, especially for sales-driven organizations.
Epicor is another ERP system that has a strong adoption rate in smaller to mid-size companies in the manufacturing, distribution, and retail industries. It is also well established and entrenched in these core industries of focus. The product’s primary liability is its uncertain future relative to other, more stable and mature products in the top 10 list. Even with this uncertainty, Epicor is a very popular ERP system for smaller and mid-size companies – especially within manufacturing and distribution industries.
Although many of our clients hire us to replace QuickBooks once they have outgrown it, we can’t overlook the fact that this product has become the de facto accounting system for smaller companies. Many startups use this product only to outgrow it later, but we have also seen companies with over $100 million in annual revenue use this product.
QuickBooks also provides an ecosystem of third-party apps to provide broader ERP capabilities, such as Fishbowl for inventory management. It may not be the product that will help you reach billions of dollars in revenue, but it can certainly be a good way to help you get started on that journey.
Business One is a product that was acquired by SAP 20 years ago as an entry to the small and mid-size market, SAP’s S/4HANA is its flagship product for larger enterprises, while Business One was designed for companies in the small- and mid-size business market.. Adoption rates among global small businesses are high, and it is backed by a very well-known and stable ERP vendor.
Business One is particularly popular among smaller businesses in Europe, Asia, and Latin America, but we have concerns about the long-term viability of this product. SAP has invested heavily in protecting its market share among the world’s largest organizations by migrating them to S/4HANA implementations, so I question whether or not they will continue to support both products in the long-term.
Although this may be the least-known ERP system in our ranking, it can be a very good fit for many smaller businesses. The company is just now expanding its global footprint, but the product is well-suited for companies in the manufacturing, distribution, and supply-chain related industries.
The product also features an easy-to-use mobile development app that allows non-technical types to create apps that tie to the core ERP system. The product’s biggest weakness is that it doesn’t have a strong network of implementation partners and resources, but the strength of the product can outweigh those weaknesses in many cases.
Sage provides a suite of ERP systems that has long focused on the small- and mid-market space, such as Sage 100cloud, 300cloud, and X3. It has a particularly strong presence in manufacturing, distribution, retail, and construction, while its breadth of products can help small businesses at various points through their growth cycles. It is a well-established suite of products with a fairly robust implementation ecosystem, which enables it to compete well with some of the larger players in the enterprise software space.
Over the years, Odoo has cornered the market for open source ERP systems designed for smaller businesses. The product’s flexibility and modular approach can be very appealing to small businesses that want something they can grow into as they evolve. The product’s simple pricing model is a refreshing reprieve from some of the larger and more complex ERP vendors in our ranking.
Odoo’s main downside is that it requires more heavy-lifting to mold the product into how you want it to fit within your business, especially if you don’t have the IT resources to help you with the implementation. This risk can be mitigated with qualified outside resources, but still something to be aware of.
Business Central is Microsoft Dynamic’s offering for the small to middle market, while F&O (finance and operations) is designed for larger enterprise. The product is easy to use, flexible, and has the familiar Microsoft look and feel, which can be very appealing to small businesses. It is also a relatively tightly integrated ERP system, especially when compared to QuickBooks, Salesforce, Odoo, and other systems that take a best of breed ERP approach to solving the challenges of growing a small business.
One of Business Central’s primary strengths (flexibility) can also be a weakness. Many small businesses get tangled in the variety of setup options, which can lead to challenges. The even bigger downside of D365 in general is that its implementation ecosystem is a mess, with all too many weak resellers and partners. Even so, Business Central is a very good fit for many smaller organizations.
Prior to being acquired by Oracle a few years ago, NetSuite was the pioneer of small business ERP systems. It was also the first ERP system to originate in the cloud, which gives the product a leg up on other competitors that are still migrating from their on-premise systems. Its focus on small to mid-size companies, ease of use, and executive dashboards are three of the most cited strengths of the product in the small- and mid-market.
The downside of the product is that since it is a multi-tenant cloud system, it is slightly less flexible than other ERP systems. This may not be a problem if your business has fairly standard operations, but it can be a problem if you have unique operations or require a certain amount of flexibility. However, these weaknesses can actually be a strength if you are trying to standardize and scale your growing business.
For more on how to compare the top 2 vendors in our ranking, please also see our independent comparison of Microsoft Dynamics 365 vs. Oracle NetSuite.
The above list is meant to be a general ranking among small businesses of varying industries, growth trajectories, and overall goals. But you may end up with a very different short-list depending on your strategy, goals, and objectives.
Ultimately, what’s right for another small business peer may not be right for you. They key is to define what you want to be when you grow up, then identify the small business ERP systems that may best fit that profile.
I am passionate about helping small businesses grow, succeed, create jobs, and help the world in general. Please feel free to contact me if you would like to brainstorm which of the leading ERP systems might be best for your small business. I am happy to be an informal and independent sounding board as you grow your business and continue your technology transformation journey!