All-round ERP Comparison: Odoo vs. SAP

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Choosing an ERP may seem a tricky task, but our Odoo vs SAP comparison will help you understand which ERP is suitable for your organization.

If your company suffers from operational inefficiencies, disparate data, and systems, time lags, and miscommunication between departments, implementing an ERP system may become a remedy. But choosing the right one is similar to picking a medication. It depends on the diagnosis. ERP software is exceedingly diverse and offers a plethora of customization possibilities. Which ERP system will fit your business processes, ambitions, and organization’s size? In this article, we compare Odoo vs. SAP — two of the most popular ERPs out there.

Nine questions to ask yourself before choosing Odoo vs. SAP ERP

Improved reporting and planning, increased process visibility, and cost reduction are universal benefits of ERP systems. However, just as no size fits all, there is no ERP that would be equally perfect for any organization. That’s why, together with a business analyst and team lead developer experienced in ERP implementation, we’ve prepared a list of questions and accompanied them with the answers to help you finally figure out which ERP is suitable for you, or at least which one is not.

1. How many orders do you have to process daily?

Odoo is an optimal solution if you have no more than a hundred orders on a daily basis, and you don’t need to collect and store a mind-boggling amount of data. But if you’ve installed Odoo while a startup, and since then your company has grown, experienced developers can customize the ERP to handle the amount of data you operate.

SAP is designed on a different principle. It’s capable of storing and handling a huge amount of data for enterprises that process thousands or even millions of orders daily. For example, Amazon uses SAP since it has to handle more than 66 thousand orders per hour. However, it takes an eternity to process such volumes of information — SAP’s slowness has even become a meme.

2. Would you like to get out-of-the-box ERP functionality for free, or are you ready to shell out the cash from the start for a basic solution?

Odoo has a Community version, which is totally free but has some limitations in particular modules. However, let’s take the full-fledged Odoo Enterprise version for comparison. It’s a cheaper option even if on the other side of the scale is SAP Business One (SBO) – SAP’s alternative for small and middle-size businesses. Software cost depends on the number of users and modules you need. On average, you’ll pay $13.50 per user monthly if your company has 50 Odoo users. So, in terms of costs, in the Odoo ERP vs. SAP competition, Odoo is the winner.

SAP’s implementation and annual costs are high. Even in the case of SBO implementation in a company with no more than 50 employees, you have to pay $199 per user on a monthly basis – this is almost 14 times the price of Odoo from the outset. Speaking of the application of a full-scale SAP version such as S/4HANA, costs are much higher since this ERP is oriented toward huge organizations with thousands of employees. Note, that even the deployment of the basic functionality requires having deep pockets, let alone customization, that you’ll more likely need.

3. Does the survival of your business depend on its flexibility?

Odoo helps small and medium businesses that can operate in one way today and change it tomorrow to stay competitive. This ERP is like a constructor, where you can easily assemble the whole system from the blocks, and if necessary, change the components. For instance, if the company changes the suppliers, their processes, such as the supply chain, also change. Flexibility is the basis for survival in such companies.

SAP is tailored for organizations whose survival depends on strict adherence to processes, not flexibility. When you have offices or subsidiaries with hundreds or thousands of employees in different countries, following clear business processes is the key to the smooth functioning of the whole enterprise. For example, Coca-Cola has to manage marketing, advertising, manufacturing facilities, and representative offices in more than 70 countries on different continents. It’s impossible for the enterprise to drastically change its processes.

4. How much time and effort are you ready to invest in your ERP project?

Odoo is the open-source ERP written in Python and made up of modules. You can make use of the ones you need and stay flexible in exploring new Odoo features and solutions. Popular programming language and modular structure make it easier for you to find developers with an appropriate level of expertise and experience. In this Odoo vs. SAP comparison, Odoo comes first in terms of the speed of ERP implementation.

SAP, albeit consisting of modules, has a more tangled structure since it serves the needs of large international companies from the Fortune 1000 list. The ERP is written in C, C++, Java, and ABAP (a high-level programming language invented by SAP). By and large, it’s not a case where developers can grasp the system’s structure and logic at a mere glance — this ERP requires specialists with at least five years of expertise specifically in SAP, and finding them may become tricky.

Keep in mind that the speed of any ERP implementation depends on the initial data source, from where you’ll transfer information to the new system. Transferring data from third-party systems might be difficult because of their data structure. It will take time to analyze the logic of your third-party systems, match it with the ERP logic, and write a script to transfer the data. For example, if the organization is a manufacturing company, you’ll need to transfer technical processes, products, invoices, etc.

— Dzmitry Murauka, Business Analyst, *instinctools

5. What are your hosting server preferences for the ERP system?

Both Odoo and SAP can be installed on-premise, in a hosted private cloud, and in a public cloud.

Odoo offers a free solution if you want to install it on your servers. There is no license fee.

Going for SAP, you’ll have to pay a license fee except for maintaining servers. You can choose a perpetual, annual subscription, or consumption payment model.

6. Are you ready to adjust your business processes to the ERP system? How important to you are simplicity and the low cost of customization?

Odoo is more flexible in tailoring to your organization’s processes. This ERP is easier and cheaper to customize. However, Odoo and SAP have different customization capabilities. As one size never fits all, no wonder that the off-the-shelf functionality of both is usually not enough. In Odoo, modifying the steps of any process, whether it’s a product delivery, exchange, or return, is easier than in SAP, where it would either be impossible or very time-consuming and exhausting. SAP requires a very strict tie-in to its processes. In this respect, Odoo greatly outperforms its rival.

SAP ERP vs. Odoo is far more entangled. It offers detailed but also intricate customization, for example, if you need multicurrency functionality, multistage revisions of products, and tangled logistics. Such an approach may be needed if your organization is a global corporation. But at the same time, this ERP requires stricter adherence to its processes.

With SAP, you should accept its requirements for the business processes as dogma. SAP doesn’t adjust to your business processes. It dictates how you should change to be able to run SAP. It doesn’t mean that customization is impossible, but it’ll require much more resources and expertise. 

—Dzmitry Murauka, Business Analyst, *instinctools

If you aren’t ready to rearrange your business processes to the requirements of a ready-made ERP, you can choose the alternative option – the development of a custom system. It’ll require more time and investment than fine-tuning the existing one but you’ll get the ERP, initially created for your needs and processes.

7. Are you ready to start the data migration process quickly and potentially modify the way you work again when a new version of ERP comes out?

Odoo provides you with the scripts for more effortless data transfer, but you still have to handle data and code migration by yourself.

Even if you haven’t changed the basic Odoo modules much, the migration will require a developer’s involvement, not to mention cases where there were many modifications. The scripts help transfer the standard functionality, but if the modules were highly customized, you’d have to spend a lot of time comparing the changes in the module to take them into account in the scripts to make the new ERP version work correctly. Custom functionality requires custom migration scripts. 

— Aleh Haidash, Odoo Team Lead Developer, *instinctools

SAP has backward compatibility – the feature allows you to avoid code or data migration every time a new version is deployed. On the scale of companies such as BMW, which operate terabytes of information daily, this approach not only saves tons of energy, it makes it possible to migrate in time without a tremendous impact on the processes’ speed.

Consider that each ERP has its data structure, so in any case, you need to make a correct mapping of your data to the data model used in Odoo or SAP.

8. How prepared are you to deal with bug fixing?

Odoo is an open-source ERP with a huge community, and that’s a significant head start.

The more developers use ERP, the less likely the bugs will go unnoticed. With Odoo, if someone finds a bug, they create an issue about it on GitHub, describe how to fix it, or ask for help. So when other developers encounter a similar bug, they can quickly and easily find a solution. 

— Aleh Haidash, Odoo Team Lead Developer, *instinctools

SAP, on the contrary, is a closed-source ERP. In such a situation, you have to entirely rely on your development team’s expertise and SAP technical support.

9. Do you have a technology partner who will promptly adapt the modules to new regulations?

Regardless of which ERP you choose, the modules will require modification when the regulations change. For example, if invoicing or managing bill requirements change, you’ll need to modify your accounting module accordingly.

Odoo system flexibility allows you to quickly adapt to new conditions and requirements of different authorities. With dedicated experts who support and maintain your ERP system, all the necessary changes can be addressed quickly and pain-free.

Here’s an example from my practice of Odoo implementation for a European client. When Germany reduced VAT from 19% to 16% during the COVID-19 pandemic in 2020, our team needed to reconfigure tax settings to avoid issues with the DATEV upload. 

— Aleh Haidash, Odoo Team Lead Developer, *instinctools

SAP’s modules have a more complex structure, that’s why it’s complicated to adjust them to comply with new regulations. As mentioned before, this ERP has a higher entry threshold for developers — only experts with 5-10 years of relevant experience can change the code.

Odoo vs. SAP comparison

There’s no such thing as “good or bad ERP”, it may be “for you or not for you”

As you can see, Odoo vs. SAP comparison is ambiguous. It’s impossible to say which ERP is better. Both have their strengths and weaknesses. The key parameters to pay attention to when choosing a system are the organization’s size and the amount of data the system should handle.

Odoo suits small and midsize companies with not overly complicated business processes. A company may have several offices, but their processes are approximately the same, and the primary goal of ERP implementation is to move from disparate spreadsheets to a unified system, which will become a single point of truth. Odoo modules allow covering almost any standard process of work within ERP – warehousing, accounting, etc. SAP is a more sophisticated system designed for Fortune 1000 companies with more convoluted business processes. This ERP is designed to store and process a massive amount of data.

Anyway, choosing a suitable ERP between Odoo vs. SAP is only half the battle. No less important is the experience level of the team responsible for its implementation. Get in touch with us to find knowledgeable technical allies.


The article was originally published here.